Harvard Business Review

Subscribe to Harvard Business Review feed Harvard Business Review
Practical insights, tools and resources from leading business thought leaders.
Updated: 2 min 42 sec ago

Overcome Resistance to Change with Two Conversations

May 16, 2017 - 11:00am

Across industries and sectors, the track record for organizational change is bleak. Research finds that anywhere from 50%–75% of change efforts fail. And for those that do succeed, many don’t achieve the goals of the original vision. Why is change so hard?

Usually, figuring out the right answer is not the challenge, whether it’s a new strategy, more-efficient processes or systems, or a new structure that better meets the needs of a growing company. The biggest hurdle to effective organizational change is people. A core part of your job as a leader is to help others overcome the inherent, very human bias toward maintaining the status quo.

In our work of leading change in higher education and teaching students and executives about the change management process, we’ve gained a deep understanding of why resistance happens and what leaders can do to overcome it.

Identifying the Sources of Resistance

You first need to identify who — that is, which individuals and groups — have the biggest potential to thwart positive change. Then you have to unstick them. Doing so begins with understanding their perspectives. In our experience, there are three primary reasons people resist:

Even if you’ve done your homework and have engaged a broad range of stakeholders in determining the new direction for your organization, team, or project, there are undoubtedly going to be people who disagree on substantive grounds. Maybe they don’t agree with your analysis of the problem or they think they have unique experiences, expertise, or information that hasn’t been sufficiently considered. With this type of resistance, your job is to listen and be open to changing your approach based on what you learn.

A second universal source of resistance is the human need for respect, which frequently heightens during periods of change. This is especially true of employees who have been with an organization for a long time or have held a good deal of influence at some point in the past (and believe they still do). If these people don’t feel that they’ve had a chance to weigh in, they will assume that an important perspective has been missed, that the answer can’t be right if they have not been consulted. Again, the solution is to listen respectfully and make sure they feel heard.

Another reason people might resist is simply because they are feeling rushed. They don’t have enough time to digest the new direction or cope with the situation emotionally. We all operate at different speeds. Here, your goal should be to figure out whether any timelines can be adjusted to reduce some of this time-based stress.

Talking with the Resistors

As you begin talking to resistors, keep in mind four ground rules.

Forget efficiency. Motivating true change requires unhurried, face-to-face, one-on-one conversation. Email doesn’t do it, nor do memos or webcasts. If a specific work group or person is very important to your organization’s future, and they are resisting needed change, you have to take the time to talk with them in person, and to do it under as little time pressure as possible.

Focus on listening. No matter how brilliant your plan or persuasive your argument, you must make everyone feel understood. That starts and ends with listening. When you’re in these conversations, make sure to take up no more than 20% of the airtime, and when you do speak, try to repeat back what you’ve heard as much as possible.

Be open to change yourself. A resistor who senses you are listening only so you can get what you want won’t open up and definitely won’t get onboard. You must have an open attitude — be ready to learn something new and, if necessary, modify your plans. Show that resistors’ opinions and feelings matter to you and will shape your thinking and actions.

Have multiple conversations. We’ve found that effective dialogue with resistors typically requires a minimum of two conversations. In the first conversation, you listen and diagnose the roots of the resistance. In the second conversation, your goal is to make clear that you have reflected on what you heard; to outline what will be different, or not, in your approach to the change based on that conversation; and to explain why. Even if you’re not changing your overall plan, we’ve found that anyone who truly listens to opposition will have their thinking changed in some way. So you can at least be genuine about that.

The time in between these two conversations is critical. We recommend at least two days, depending on the scale of the change. If you respond immediately, either during the initial talk or within a few hours, resistors won’t believe, perhaps rightly, that you’ve fully considered their point of view. But don’t wait more than seven days, because at that point the person feels dismissed and forgotten.

Effective change management is critical to the vitality and progress of every organization. Where most people trip up is in failing to manage resistance effectively. Doing so requires an ability to listen to your opposition, diagnose their antipathy, consider their thoughts and feelings, and explain how it has changed your thinking, if not your plan. This is a time-consuming but effective process. As Jim McNerney, the former CEO of Boeing, said in one of our classes, “Change happens one conference room and one office at a time.”

The Best Cybersecurity Investment You Can Make Is Better Training

May 16, 2017 - 10:27am

As the scale and complexity of the cyber threat landscape is revealed, so too is the general lack of cybersecurity readiness in organizations, even those that spend hundreds of millions of dollars on state-of-the-art technology. Investors who have flooded the cybersecurity market in search for the next software “unicorn” have yet to realize that when it comes to a risk as complex as this one, there is no panacea — certainly not one that depends on technology alone.

Spending millions on security technology can certainly make an executive feel safe. But the major sources of cyber threats aren’t technological. They’re found in the human brain, in the form of curiosity, ignorance, apathy, and hubris. These human forms of malware can be present in any organization and are every bit as dangerous as threats delivered through malicious code.

With any cyber threat, the first and last line of defense is prepared leaders and employees, whether they are inside an organization or part of an interconnected supply chain.

And yet organizational leadership all too often demonstrates outright technology torpitude. An unprepared, lethargic leadership only amplifies the consequences of a security breach. The scale of the Yahoo breach disclosed in 2016, combined with the fumbling response, cost the company and its shareholders $350 million in its merger with Verizon and nearly scuttled the entire deal.

Insight Center

To prepare for and prevent the cyberattacks of the future, firms need to balance technological deterrents and tripwires with agile, human-centered defenses. These vigorous, people-centric efforts must go beyond the oft-discussed “tone at the top” — it must include a proactive leadership approach with faster, sharper decision making. As cyber threats grow exponentially, comprehensive risk management is now a board-level priority. Indeed, the iconic investor Warren Buffett highlighted cyber risk as one of the gravest concerns facing humanity during Berkshire Hathaway’s annual meeting.

Firms must recognize and react to three uncomfortable truths. First, cyber risk evolves according to Moore’s Law. That’s a major reason that technology solutions alone can never keep pace with dynamic cyber threats. Second, as with all threat management, defense is a much harder role to play than offense. The offensive players only need to win once to wreak incalculable havoc on an enterprise. Third, and worst yet, attackers have patience and latency on their side. Firms can be lulled into a dangerous state of complacency by their defensive technologies, firewalls, and assurances of perfect cyber hygiene.

The danger is in thinking that these risks can be perfectly “managed” through some sort of comprehensive defense system. It’s better to assume your defenses will be breached and to train your people in what to do when that happens. Instead of “risk management,” we propose thinking of it as “risk agility.” The agile enterprise equips all organizational layers with decision guideposts and boundaries to set thresholds of risk tolerance. All employees should not only understand what is expected of them regarding company policy and online behavior but also be trained to recognize nefarious or suspicious activity. The key attribute, particularly when it relates to cyber risk, is the concept of sense something, do something, which makes all people in an organization a part of a “neural safety network.” For example, the defense against the SWIFT banking hack, which saw some $81 million be stolen, was launched by an alert banking clerk in Germany who recognized a misspelling.

When we say all employees have to be risk agile, we mean all. C-level executives, board directors, shareholders, and other senior leaders must not only invest in training for their firm’s own employees but also consider how to evaluate and inform the outsiders upon whom their businesses rely — contractors, consultants, and vendors in their supply chains. Such third parties with access to company networks have enabled high-profile breaches, including Target and Home Depot, among others.

A skeptical executive could push back on this idea — won’t that cost a lot? The fact is, cybersecurity training is vastly undercapitalized, and the lack of investment in quality cyber education programs is manifest in the sheer volume of breaches that continue to be rooted in human failure. Worse, the volume of breaches is woefully underreported — even when they are identified early because firms are reluctant to amplify reputation risk. In a 2016 survey conducted by CSO magazine and the CERT Division of the Software Engineering Institute of Carnegie Mellon University, respondents reported that insiders were the source of “50% of incidents where private or sensitive information was unintentionally exposed.” Insider threats can include malicious activities but also mistakes by employees, such as falling for a phishing scam.

In short, there will be some investment required in enhancing personnel readiness. But it can be cost effective over time, particularly when compared to implementing cutting-edge cybersecurity technology that may become obsolete. To be clear, technology is a critical piece of the cybersecurity puzzle, but just as with a car containing all the latest safety technology, the best defense remains a well-trained driver.

Moreover, businesses slow to adopt stronger security measures may find themselves pushed into it by regulators. The latest regulations promulgated by the New York State Department of Financial Services, for example, requires that covered businesses “provide regular cybersecurity awareness training for all personnel.” This is just the tip of the iceberg of what is likely to come from other states and government agencies around the world, which are increasingly harmonizing their view of a “carrots and sticks” approach to cybersecurity compliance.

Artificial intelligence, machine learning, and self-teaching algorithms may represent the latest trends in hot IT investments, but technology exists for and is utilized by people. Corporate leaders would be wise to understand that the future of cybersecurity lies not in a single-pronged approach or miracle tool but in solutions that recognize the importance of layering human readiness on top of technological defenses.

How “Brainwriting” Can Get Better Ideas Out of Your Team - SPONSOR CONTENT FROM KELLOGG EXECUTIVE EDUCATION

May 16, 2017 - 9:55am
Read more from Kellogg Executive Education:

All too often, your brainstorming sessions are steered by one or two people who dominate the conversation and shut everyone else down. That can be a big source of frustration, and stop the idea generation your team needs in order to succeed.

How bad can it get? Research indicates that in a typical six-person meeting, two people do more than 60 percent of the talking. Increase the size of the group, and the problem only gets worse.

What to do? Hand out pens and cards and get everyone writing—brainwriting.

The process helped save a key off-site meeting and can get your team working more productively—without the headaches.

Learn more about teamwork
With Kellogg’s Executive Education Program

Leigh Thompson is director of the Leading High-Impact Teams program, and co-director of the Constructive Collaboration Executive program and the Negotiation Strategies Executive program. You can work with Leigh Thompson and her colleagues in the Kellogg programs to improve your executive skills throughout the year.

For more information, visit the program website.

Solidify your teamwork and take your collaboration skills to the next level with Kellogg Executive Education.

Assessment: Do You Know How Bureaucratic Your Organization Is?

May 16, 2017 - 9:41am

By our estimates, an excess of bureaucracy costs the U.S. economy more than $3 trillion in lost economic output per year. When you look at all 32 countries in the OECD, the cost of excess bureaucracy rises to nearly $9 trillion.

Yet while the incentives for dismantling bureaucracy are substantial, so are the hurdles. Bureaucracy is ubiquitous, familiar, and deeply entrenched. For most managers, bureaucracy is not merely the “safe” choice; it’s the only choice. They’re likely to see radically flat organizations like Haier, Valve, and Morning Star as weird exceptions, as opposed to valuable exemplars.

Upending cultural norms isn’t easy. It takes courage, a dose of righteous indignation, and, perhaps most critical, data. People pay attention to things that can be measured. To dismantle bureaucracy, then, the first step is to be honest about how much it’s costing your organization. These costs fall into seven categories:

  1. Bloat: too many managers, administrators, and management layers
  2. Friction: too much busywork that slows down decision making
  3. Insularity: too much time spent on internal issues
  4. Disempowerment: too many constraints on autonomy
  5. Risk Aversion: too many barriers to risk taking
  6. Inertia: too many impediments to proactive change
  7. Politics: too much energy devoted to gaining power and influence

Not all of these costs can be easily measured, but that shouldn’t deter you from working to calculate your organization’s bureaucratic burden. We call it BMI, or bureaucracy mass index.

How pervasive is bureaucracy in your organization? How much time and energy does it suck up? To what extent does it undermine resilience and innovation? Which processes are more trouble than they’re worth?

To find out, take the assessment below. At the end of it, you’ll see how your results compare to other readers’.

Reducing bureaucracy won’t happen until its costs are visible to all internal and external stakeholders of your company. A decade ago, few companies reported on environmental impact — now many do, thanks to pressure from governments, customers, and environmental advocates. Similarly, shareholders and other interested parties need to press CEOs to detail the costs of obsolete management practices and to develop plans for eliminating those costs.

var forio_assessment_id="87e8f7e3-2443-11e7-b013-063e6ef7c69d",forio_path="hbr/assessment";(function(d,t,a,b){var a=d.createElement(t),b=d.getElementsByTagName(t)[0];a.src="//forio.com/tools/assessment-tool/embed.min.js?cb="+(+new Date);b.parentNode.insertBefore(a,b)}(document,"script"));

The Explainer: Hidden Traps in Decision-Making

May 16, 2017 - 9:37am

The best defense against these traps is awareness.

Tech Companies Should Speak Up for Refugees, Not Only High-Skilled Immigrants

May 16, 2017 - 8:05am

The Trump administration’s latest travel ban is back in U.S. federal court. The Fourth Circuit, based in Virginia, and Ninth Circuit, based in San Francisco, are hearing cases challenging the latest executive order banning immigrants and refugees from six Muslim majority countries from entering the United States. Joining the fray are 162 technology companies, whose lawyers collectively filed an amicus brief to both courts. Amazon, eBay, Google, Facebook, Netflix, and Uber are among the companies urging federal judges to rule against the executive order, detailing why it is unjust and how it would hurt their businesses.

While the 40-page brief is filled with arguments in support of immigration, it hardly speaks about refugees, except to note that those seeking protection should be welcomed. Any multinational company with a diverse workforce would be concerned about limits to international hiring and employee travel. But tech companies should also be concerned about the refugee populations that depend on their digital services for safety and survival.

In researching migration and the refugee crisis in Europe, my team and I interviewed over 140 refugees from Syria, and I’ve learned that technology has been crucial to those fleeing war and violence across the Middle East and North Africa. Services like Google Maps, Facebook, WhatsApp, Skype, and Western Union have helped refugees find missing loved ones or locate safe places to sleep. Mobile phones have been essential — refugees have even used them on sinking boats to call rescue officials patrolling the Mediterranean.

Refugees’ reliance on these platforms demonstrates what tech companies often profess: that innovation can empower people to improve their lives and society. Tech companies did not intend for their tools to facilitate one of the largest mass movements of refugees in history, but they have a responsibility to look out for the safety and security of the vulnerable consumers using their products.

Some tech companies have intervened directly in the refugee crisis. Google has created apps to help refugees in Greece find medical facilities and other services; Facebook promised to provide free Wi-Fi in U.N. refugee camps. A day after President Trump issued the first travel ban, which initially suspended the U.S. Refugee Admissions Program, Airbnb announced it would provide free housing to refugees left stranded.

Notable tech leaders have spoken out against policies that turn away refugees. Soon after the ban, Facebook CEO Mark Zuckerberg wrote on his personal page, “We should also keep our doors open to refugees and those who need help.” He noted that his wife’s family came to the U.S. as refugees. Brian Chesky, CEO of Airbnb, tweeted, “Not allowing countries or refugees into America is not right, and we must stand with those who are affected.” And Google cofounder Sergey Brin joined the protests against the executive order at San Francisco International Airport, saying, “I’m here because I’m a refugee.” (He later said that he and his family fled oppression in the former Soviet Union.)

These efforts to directly help and advocate for refugees have been admirable. But collective action from the tech sector would be more effective for swaying the opinions of the courts and the public. The amicus brief would have been the best opportunity for an industry-wide statement that the government should welcome refugees, particularly those who have already cleared stringent security checks to enter the U.S.

A stronger stance would be in the companies’ best interest. Corporations are facing greater pressure from their employees and customers to take a stand on political issues and uphold certain values. As Ken Shotts, professor at Stanford Graduate School of Business, told me, “Many employees (U.S.-born as well as immigrants) expect tech companies to live up to their grandiose claims about values and doing good in the world. Unlike employees in most companies, they have leverage, due to the tight labor market in Silicon Valley.”

Consider how, a few days after Trump’s first travel ban, thousands of Google employees walked out of their jobs in a day of protest. Consider, too, how Uber suffered a PR crisis for seeming tone-deaf immediately following the ban. Despite CEO Travis Kalanick’s statements in support of immigrants and refugees, many Uber employees and consumers were furious that he still planned to attend Trump’s meeting of economic advisors a few days later. In the wake of the #DeleteUber campaign that followed, Kalanick stepped down from the advisory council.

In recent years technology companies have tried to convey to the public that they will protect their consumers against government overreach. For example, Apple has refused to give government authorities a backdoor key to encrypted iPhones, and Microsoft recently won a federal case wherein it refused the U.S. government’s demands to hand over consumer data stored overseas.

The sector should extend these efforts by making sure its technologies aren’t used to target broad groups of people based on nationality or religion. Already the U.S. Customs and Border Protection (CPB) is asking for the social media accounts — even passwords — of visitors from other counties. The Council on American-Islamic Relations has filed complaints against the CPB, stating that Muslim American citizens have been subjected to enhanced screening that includes scrutiny of their social media accounts and cell phones.

Trump has talked about creating a database to identify and register Muslims in America, including refugees. A number of companies, including IBM, Microsoft, and Salesforce, have stated they will not help build a Muslim registry if asked by the government. In addition, a group of nearly 3,000 American tech employees signed an online pledge promising they would not develop data processing systems to help the U.S. government target individuals based on race, religion, or national origin.

Tech companies need consumers’ trust now more than ever. Deserved or not, tech is getting blamed for an array of societal ills, from social media perpetuating fake news to artificial intelligence taking away jobs. Trump’s executive order will likely be challenged in other high-profile cases, giving companies an opportunity to highlight how their innovations help refugees fleeing conflict. The industry can use future amicus briefs to make stronger collective arguments to the courts and to the public. In speaking up for the most vulnerable members of our global community, the tech industry would send the message that it cares about more than the bottom line.

Immigration Is at the Heart of U.S. Competitiveness

May 15, 2017 - 12:00pm

John F. Kennedy Airport, 1981. I was 11 years old, and my mom and I had just arrived from Guyana. Together, we had $34. We approached a big machine that we had never seen before and stood at bottom puzzling over the best way to get on and off it.

Later we learned that the machine was called an escalator. At that moment, looking up from the bottom of the escalator, the idea that I would one day run a technology company seemed unfathomable. In time, I would become a U.S. citizen, earn engineering degrees from Stanford, and work at IBM and Hewlett-Packard. Today I am the CEO of Carbonite, a publicly-traded data protection company.

This is possible because this is the United States of America. I believe the U.S. draws its global competitive advantage from its openness to new people and new ideas. It’s an ability the country devalues at its peril. We risk impeding growth in sectors such as high tech and life sciences if we make it harder for top talent to arrive and compete for jobs. From my personal experience, including in the corner office, I firmly believe that curtailing immigration will make it harder to sustain America’s vibrant, creative mix.

Forty percent of Fortune 500 companies were founded by immigrants or the children of immigrants. Intel founder Andy Grove was a refugee from communist Hungary. Apple cofounder Steve Jobs is the son of Abdulfattah Jandali, an immigrant from Syria. Today, the trend continues. A recent study of billion-dollar startups found more than half were founded by immigrants. Our next generation of great companies, too, will depend on immigrants — as will the American economy as a whole.

Consider the country where I grew up. In 1970, the year I was born, Guyana’s dictator declared the country a cooperative republic and deepened relations with Cuba, North Korea, and the Soviet Union. Imports were banned, including flour. The president started nationalizing businesses. By 1979, the private sector was reduced to only 10% of the economy. There was a widespread shortage of food, fuel, water, and electricity.

My mother was a teacher. My father was a police officer. We were better off than most. We had a home made from wood, instead of mud. We had a small amount of money, but there was not much to buy. The government told us to grow vegetables. Without running water, we walked long distances to fetch water.

In 1980, my parents decided this was no life for their three young children, then three, five, and 10 years old. My father found his way to America; my mother and I came a year later; and three years later, my younger brother and sister arrived. After four years, we were reunited, living in near-poverty in New York, but we were together and hopeful. In 1991, we became U.S. citizens.

Millions of people like us have fought tooth and nail for a better life in America. Assembled under a set of consistent rules called the Constitution, we compete fiercely and win on a global scale. This is the kind of diverse team that CEOs covet and that builds great businesses.

I’ve seen this dynamic in practice at two iconic companies, IBM and HP. When I joined, each had approximately $100 billion in revenues and more than 250,000 direct employees. Each had become proud, complacent, and insular. New ideas and new blood were unwelcome.

In 1993, IBM was within months of bankruptcy. For the first time in the company’s history, the board hired a CEO from outside the company – an immigrant of sorts to the IBM nation. Louis Gerstner created an environment that gave new employees like me a chance to innovate and compete. We eventually shed the hard drive and the iconic IBM PC businesses – much to the chagrin of the old guard. Instead, we invested in software and analytics.

Similarly, in 2011, HP was declining at a precipitous rate. A new CEO, Meg Whitman, came in to fix a company mired in complacency and isolationist thinking. She began infusing the company with new talent, including me. We eventually split the company into smaller ones that could move faster with new ideas and compete better.

Both IBM and HP had suffered from stagnation: too many employees set in their ways, too few new ideas. One key to reviving them was bringing in new people. A healthy mix of old and new is critical to the vitality of a company – and the nation.

Earlier this year, when the U.S. administration proposed and enacted changes to travel and immigration policies, my company set up a teleconference for U.S.-based employees. More than 10% dialed in, most of whom were born in unaffected countries such as China and Mexico. Employees asked whether we have a contingency plan if they were unable to reenter the U.S. after traveling abroad. Certainly, I would rather keep the talent who come to our universities and join our company within the United States. To retain those employees, however, if immigration and travel become more restrictive, we may be forced to expand Carbonite’s European and Canadian offices, much like Microsoft and other tech companies have done.

Worries and logistical distractions hurting overall productivity is one thing. The imminent threat to innovation and progress is another. The technology sector already suffers from a significant talent shortage. Meaningful K-12 investment, internships, apprenticeships, and retraining of American workers are needed, along with immigration. The country also cannot afford to curtail the new companies and jobs that immigrants create.

In recent months, I’ve thought back many times to my own path to U.S. citizenship. Three decades after I looked up from the bottom of that escalator, I am contributing to the economy and creating jobs in a meaningful way. The American Dream is still alive, and it is core to innovation and competitiveness. But we must protect it.

Earlier this year I was invited to welcome 200 immigrants taking the oath of American citizenship at the John F. Kennedy Presidential Library and Museum. I told them that despite the many challenges they face, they have the grit and optimism the United States needs right now. I told them they could become a hard-working mechanic whom the community respects, like my father. I told them they could become the CEO of a corporation, like me. I told them their descendent could become the president of the United States, like JFK, the great-grandson of immigrants.

I challenged them to prove their worth. I challenged them to work hard, study hard, start businesses, create jobs, and build the American economy. I have no doubt they will. They know what life is like in many other places, and they chose the United States. Citizenship is their badge of honor and our common hope.

Medical Systems Hacks Are Scary, but Medical Device Hacks Could Be Even Worse

May 15, 2017 - 11:00am

On Friday, a major cyber attack hit health systems around the world. In Britain, where the attack affected hospital IT systems, doctors were unable to access patient records. Ambulances were diverted and emergency care delayed.

Unfortunately, attacking hospital IT systems is just the tip of the iceberg when it comes to cyber vulnerabilities in the health care sector. Hacks of implanted or wearable medical devices are an even more sobering threat.

Researchers in Belgium and the UK have demonstrated that it’s possible to transmit life-threatening (if not fatal) signals to implanted medical devices such as pacemakers, defibrillators, and insulin pumps. A catheter lab in a Virginia facility was temporarily closed when malware was discovered on the computers supporting cardiac surgery. In three other similar cases, malware capable of opening up “backdoor” access to a hospital’s IT network was found in software residing on X-ray, blood gas analyzer, and communications devices. More recently, researchers investigating cybersecurity of medical devices provided the Center for Devices and Radiological Health at the Food and Drug Administration (FDA) with a list of specific medical device vulnerabilities identified through their ongoing work, and just last year two commercial vendors revealed vulnerabilities in insulin pumps and a nursing inventory supply system that could compromise care and provide covert network access.

Insight Center

Such devices are becoming more and more common in health care. Spurred by an aging population, increases in chronic disease, and technological breakthroughs, the electronic medical device market is poised to reach an estimated $398 billion in 2017. But while the market expands at an expected rate of 3% per year until at least 2022, hospital IT networks remain slow to address longstanding cybersecurity challenges that raise both privacy and potentially fatal health concerns. Surveys of health IT leaders reveal that much of their cybersecurity budgets will remain focused on securing enterprise networks through infrastructure, datacenter, and cloud security, while emerging government and industry regulatory frameworks provide only guidance without meaningful penalties, making it easy for health system IT leaders to deprioritize the risks presented by medical devices. Moreover, a major challenge is the continued presence in the marketplace of devices manufactured before 2014, when the FDA’s guidance was issued. (For example, in 2013, the average age of an MRI scanner in the U.S. was 11.4 years.)

There are, however, some basic steps that hospital CIOs can take to reduce their risk and protect patients, devices, networks, and data:

Assess device cybersecurity during procurement. Assess these risks on par with clinical efficacy. Talk openly with vendors about concerns and expectations if vulnerabilities are identified in the future. In 2014 the International Organization for Standardization developed guidelines for the disclosure of potential vulnerabilities in products. It’s important to get familiar and incorporate appropriate aspects into your policies and procedures, and keep your eye out for a revised standard in 2019.

Require basic cyber hygiene. End user workarounds and shadow IT groups undermine even the best security architecture and policies. Proactively engage end users to avoid nonadherence to security policies. Ensure that bring-your-own-device policies, procedures, and systems have the same level of protection as networked devices. The aforementioned HIMSS survey found that only 56.3% acute and 35.5% nonacute were actively deploying significant mobile device management protocols. Finally, require the use of antivirus and antimalware software. A 2016 HIMSS survey found that only 84% acute and 90% nonacute providers are using these first-line defenses. IT managers should think like care providers: Preventing an infection is better than treating one.

Proactively access risks and patch vulnerabilities. Focus in particular on legacy devices and work directly with manufacturers and suppliers to bring every device up to date ASAP. In late 2016 the FDA provided helpful but nonbinding guidance for devices already approved and in the field. It provides a reasonable framework for assessing cybersecurity risk across the product life cycle. They also give specific direction about how to address an identified cybersecurity risk across the entire health IT ecosystem without alarming patients and providers or tipping off would-be hackers and others interested in exploiting a known vulnerability. The most significant guideline is the FDA’s statement that manufacturers can reach back and fix security issues without having to resubmit a device for recertification. Prior to this explicit guidance, many manufacturers were reluctant to make changes that could be seen as fundamental alteration, which triggers the need for recertification.

Stay alert and informed. In 2013, Executive Order 13961 established a series of Information Sharing and Analysis Organizations and Centers to encourage the formation of voluntary communities that can securely share information across a region or industry in response to emerging threats. Membership includes secure notifications of emerging threats and access to leaders at many major device manufacturing firms and trusted vendors whose products, manufacturing, and post-market response processes meet certain criteria. The cost of participating is minimal when compared to the financial and public relations cost of mopping up an avoidable breach.

Hospital CIOs clearly recognize that networked medical and wearable devices present security soft spots. However, with limited resources and a host of new regulatory and business challenges to prioritize, reducing the threats presented by medical devices is very likely remain low on their lists. Cybersecurity remains secondary to medical purpose, even if cybersecurity could result in severe injury or death. Without actual penalties for noncompliance, it’s unclear whether device risks will rise above other competing health IT priorities. Patients deserve better.

The Biggest Mistakes New Executives Make

May 15, 2017 - 10:00am

Organizations invest a lot of time and money in hiring the right CEO or senior executive to set a vision and make the changes in their company. Yet within the first 18 months, there’s a 50% chance the executive will leave the organization. This failure comes with enormous costs, not only in disruption to the organization but financially, too. One estimate puts the cost at 10 times the executive’s salary – sometimes more.

The reasons these individuals leave are many. They often cite poor cultural fit, inadequate onboarding, or the lack of appropriate expectations. But in reality, many new executives inadvertently set themselves up for failure within the first few months of their tenure through their own actions.

As an executive hired from outside the firm, you’ll naturally want to add value and assure your employers and employees that you are the right hire. But based on my work helping executives transitioning into new organizations, I’ve discovered common traps new executives tend to fall in, even as they try to solve problems, make decisions, and improve the company. Fortunately, there are ways to sidestep these traps so you can assimilate successfully into your new organization.

Trap 1: Propose a new vision for the organization immediately. As a new executive, you’re likely excited about your new job and have a lot of ideas. But there may be valid reasons why your ideas haven’t been implemented yet. Consider the example of Len, who was hired as vice president of a corporate training department of a Fortune 100 company. Interviewers were especially impressed by Len’s ability to conceive of and drive a vision. During his first meeting, Len tried to implement some of this vision by outlining his plans to radically change the company’s approach to executive education. Unfortunately for Len, he wasn’t aware that his short-lived predecessor had made a similar proposal. Len’s supervisors had a strong allergic reaction to the idea the first time, so when Len proposed it again, he was blindsided by the executives’ immediate negativity.

You and Your Team Series Career Transitions

While you might have some ideas that you’re eager to share, it’s important to absorb the landscape from your unique vantage point — an outsider — first. Communicating a big vision sets in motion many resources that are required to execute it. It’s better to wait a few months before deploying those resources than having to make radical changes, throwing away work, and destroying morale. Take that time to observe the situation and your company, and listen to those around you, including both colleagues and customers. If you don’t like how something’s done, ask what else has been tried. You might be surprised to learn your ideas have already been tried, and even if they haven’t, taking this approach helps to further shape, deepen, and sharpen your vision.

If you’re asked about your strategic vision, don’t feel pressured to respond before you’re ready. Saurav was hired as president of a large Fortune 500 company. During his first week, an attendee at a leadership event asked him about his vision. Rather than lay out an early plan, Saurav made a thoughtful response: “I’m afraid I’m going to have to disappoint you right now. I don’t think it’s my place to lay out a vision at this point. This is my opportunity to listen and learn. Ask me in three months, and I’ll have a different answer.”

Trap 2: Make too many big decisions too quickly. Once your predecessor’s tenure was near its end, many major decisions were likely put on hold. By the time you join, the organization may seem ready to burst with pending decisions. But just as you should wait to implement a new vision, you should hold off making long-lasting decisions until you know more.

Create an interim decision-making process and ensure transparency. Set expectations that these decisions are only interim, and you might change course after the first quarter, once you’ve gathered more information. For example, you might freeze all open headcount for executive positions for the next couple of months. During that time, define interim measures for how to operate without key positions and create a process for submitting requests for potential exceptions, like a set of criteria to present to the C-suite to make the case for a new hire in a specific role, if you’re unable to wait.

Trap 3: Tell people how you did things better in your previous organizations. I once ran an executive retreat for a CEO of a 4,000-person technology company who had recently been promoted from within the company ranks. The CEO had hired three executives from the outside. Roland, one of the external executives, had a lot of great ideas, but he started each idea with “At my other company…” Pretty soon people rolled their eyes whenever he started talking. His good ideas didn’t receive the attention they deserved.

While you’ve been hired for your experience and track record, once you’re on board, your new colleagues won’t want to hear how you did things better in your previous organization. They believe their company is different and that you don’t know enough about them right away to criticize. Instead, share your own experience sparingly. If you must talk about how to do something differently, suggest it directly — but only after you’ve asked enough questions to understand the company’s unique situation and allowed others to share their opinions, so they know you’ve taken their viewpoints into account.

Trap 4: Prioritize external relationships over internal ones. With press releases about your new role, it’s natural for people outside the company to want to connect with you. But by focusing too much attention to external contacts, you’ll lose a chance to form critical connections internally and better understand what you’re representing and how to do so.

Instead, listen internally first. One way to intentionally listen is to go on a listening tour. Ask your direct reports to list a few dozen people within the organization who would be helpful to connect with. Schedule meetings with them, jot down a list of open-ended questions to ask them, and be ready to take notes and learn. After completing your listening tour, make a list of themes and share those with the team.

Trap 5: Go it alone. At first you may not know who to go to for help. You may not want to look indecisive by asking others for advice. And with the pressure to get work done fast, you may skip delegating work to others, inadvertently signaling that you don’t trust them. This creates tension with your people, and you may also miss out on valuable knowledge others have to share.

To increase your chance of success in your first quarter, create a support team to help you learn about the organization and its culture. Partner with your support team to make a 90-day plan. Your support team should be able to help you with understanding how things are done here, how key messages are communicated, and who it’s important to talk to. Typical roles in a support team are those of chief of staff, executive assistant, communications manager, technical assistant, and at least one of your direct reports. Lastly, also seek out a different type of support team member: find out who has the pulse of the organization’s culture. Ask them if they’d be willing to be your informal cultural translator — they can help set context, explain what really took place during a puzzling interaction, or give you feedback when you have a cultural misstep.

Your long list of accomplishments got you hired into a new organization. But once you’re inside, the very things people were attracted to may no longer hold as much appeal. Increase your odds of success by watching out for common traps and taking the time to learn about your new organization and its people before you act.

How Our Company Learned to Make Better Predictions About Everything

May 15, 2017 - 9:00am

In Silicon Valley, everyone makes bets. Founders bet years of their lives on finding product market fit, investors bet billions on the future value of ambitious startups, and executives bet that their strategies will increase a company’s prospects. Here, predicting the future is not a theoretical superpower, it’s part of the job.

But our approach to prediction seems stuck in the past. Most business forecasts fail to include measurable outcomes and are not recorded, so it is hard to know if we are even getting better at them.

Research from organizational psychologist Philip Tetlock, the co-author of Superforecasting, suggests an alternative. Studying forecasting tournaments where anonymous experts predicted future events, Tetlock found that some forecasters could consistently predict better than others. Rather than possessing some innate talent, so-called “superforecasters” demonstrate what Tetlock describes as a “growth mindset,” or a willingness to learn from past mistakes and continually update their theoretical priors. Our ability to predict, like any other skill, can improve with practice.

At Twitch, a subsidiary of Amazon, we saw the promise in this research. If an individual can gain a predictive edge, so can a company. We created a program that teaches all our employees to become better forecasters regardless of their quantitative background, organizational role, or area of expertise.

Taking a cue from machine learning, Twitch employees train their forecasting powers against real world historical data. Our staff are encouraged to predict quickly and are given immediate feedback so that their forecasts become more accurate. Our goal is to leverage forecasting in order to make the “high-quality, high-velocity” decisions Jeff Bezos calls for in his 2017 letter to shareholders. Through forecasting, we are better equipped to serve the millions of gamers that use our platform every day, while staying ahead of the competition.

We’ve learned a lot from our experiences at Twitch, and discovered some best practices for how organizations may implement their own forecasting training programs, create a culture of forecasting, and better anticipate the future.

The Arc of Forecasting at Twitch

Numerical predictions offer a range of benefits for large, innovation organizations like Twitch. They are both precise and concise, and easy to communicate across work teams. Making predictions in terms of mathematical probabilities forces employees to quantify their own uncertainties about future events. Multiple predictions for the same event can be aggregated and averaged, and therefore help managers understand what entire teams or divisions are thinking. These numerical predictions clarify decisions, motivate employees, and help teams communicate concerns.

My belief in forecasting was cemented when I saw its power in a project I ran. Twitch is a platform for broadcasting video games. We have a product called host mode, which gives a broadcaster the ability to host another channel’s live broadcast on his or her own channel page. I wanted us to improve host mode, by making it easy for streamers to build and manage a list of channels to automatically host whenever you’re offline.

So like basically everyone, I had an idea for a feature that I was convinced was extremely important but that I lacked the direct authority to prioritize. Most people never get the buy-in they need at this point. So I decided to make a prediction:

If we build auto host I’m 70% confident that, within 8 weeks, 15% of our partners (our largest influencers) will be auto-hosting.

Then I gathered supporting evidence to make the prediction convincing. We ran an auto-host study and the result was overwhelmingly positive. Almost half of participants saw 10% increases in their viewership. And what we need to build was extremely simple and cheap. Our lead engineer Jixuan Wang made his own prediction: he was 70% confident he could build the feature in eight engineering weeks. These two predictions about both the value and the cost of the feature helped me convince the stakeholders we needed.

A team was allocated to work on auto host, and I solicited predictions from everyone to verify we had buy-in. Our engineer was at 75% confidence we’d hit our goal, and our lead from partnerships was at 70%. My executive mentor was a little more cautious, at 50%, but for the most part we all believed, and we knew we all believed. And when big decisions came up, we used our existing predictions as a starting point for those conversations. For instance, we asked: Should we make the push to launch for TwitchCon? It’s seemed like the perfect place for partners to make cross promotional agreements, but a lot of other things were launching there and we risked getting lost in the noise. Our partnerships lead, Steve Lin, was confident that launching at TwitchCon would increase our chance of hitting our goal by 10%. Based on that prediction, our entire team agreed that launching at TwitchCon would substantially increase our chance of success. Because of our predictions, our team was completely aligned.

Today, the feature is a success. Over half of our partners are auto-hosting, and channels that get 10 of their peers to auto-host them grow 10% on average.

At the same time, I was helping other leaders make forecasts. But the growth of forecasting at Twitch had generally been limited by my efforts to facilitate, teach, and evangelize. Today, the training we’ve developed is allowing us to surpass that limitation and scale up forecasting throughout the company.

We extend the training to product managers, engineers, executives, researchers, designers, business development — basically anyone who wants to influence the Twitch product. Though not everyone is accustomed to numerical forecasting, the training we offer makes it easy for anyone to get comfortable.

We first train employees not by predicting future, but by estimating past Twitch metrics. Understanding these numbers is not only essential for understanding Twitch’s business, but also helps employees become accustomed to estimating. For instance:

How many concurrent viewers did Twitch average last year?

How much did viewership grow year-over-year in 2016?

What percent of our viewership comes from mobile?

Rather than provide a single number for these questions, we ask our staff to give us their 80% confidence interval, meaning a high and low estimate that they believe contains the correct answer 80% of the time. In other words, if I ask you for your 80% confidence interval in five different questions, the right answer will be within your range four out of five times. If the right answer is within your range fewer than four times, you’re overconfident. If it’s within your range all five times, you’re being too conservative and making your intervals too wide.

Here’s how Tetlock himself described these “confidence quizzes” in a Harvard Business Review article last year:

“Participants are asked for range estimates about general-interest questions (such as “How old was Martin Luther King Jr. when he died?”) or company-specific ones (such as “How much federal tax did our firm pay in the past year?”). The predictors’ task is to give their best guess in the form of a range and assign a degree of confidence to it; for example, one might guess with 90% confidence that Dr. King was between 40 and 55 when he was assassinated (he was 39). The aim is to measure not participants’ domain-specific knowledge, but, rather, how well they know what they don’t know. As Will Rogers wryly noted: “It is not what we don’t know that gets us into trouble; it is what we know that ain’t so.” Participants commonly discover that half or more of their 90% confidence ranges don’t contain the true answer.”

Here’s another example you can try: What’s your 80% confidence interval for how much Amazon Web Services revenue grew in 2016? For the answer and more examples, you can view a publicly available training that I put together as an overview of Silicon Valley.

Over multiple rounds of questions, individual confidence intervals adjust to match their personal level of uncertainty.  Risk management expert Douglas Hubbard — a pioneer in decision science — has shown that it takes seventy questions to calibrate probability assessment such that estimates participants believe are 90% likely to occur actually occur 90% of the time.

As we ask employees to make these assessments, we immediately provide the correct answers, so the Immediate feedback can help employees calibrate their assessments. Our staff quickly learns if their estimates are either over- or under-confident.

Better calibration means that employee estimates are more grounded in reality and leads to lower resistance to probabilistic thinking and forecasting in general.  Of the employees who have participated in this training, 96% of participants say they would recommend it to a colleague. The training program has been so successful, we believe, because a better grasp of these fundamental numbers is useful when evaluating ideas, navigating resource contention, and setting expectations.

Once Twitch staff have calibrated their predictions by practicing with some metrics, we ask them to make predictions that should impact their work. An easy place to start is asking them to predict how much a new project will cost to complete, in terms of either time or money. In the Standish Group’s 2016 Chaos report, they found only 16% of software projects were completed to the original specifications on time and on budget. Improving employees’ ability to estimate project completion dates and the resources required to achieve these goals helps our company stay on track.

Here is a real conversation between a Twitch manager and an employee that incorporates our use of forecasting:

Employee: I’ll get Project X done this quarter.

Manager: How surprised would you be if it wasn’t done by the end of the quarter?

Employee: Actually not that surprised. Project Y is my top priority and projects like X have taken a full month in the past.

Manager: So it’s unlikely to be done this quarter. When are you 80% sure it’ll be done by?

Employee: I feel 80% confident I can deliver it by the end of June.

Manager: That sounds right. Let me know if that changes.

This sort of approach changes how you think about your work. Whenever I tell anyone I’ll do anything, I ask myself: am I least 80% sure I’ll actually do that? If the answer is yes, great. But if it’s no, I immediately reset expectations and say something like: “I’m sorry but realistically I’m going to need three weeks to get that to you, rather than one.”

Forecasting Challenges

Incorporating flash forecasting at Twitch is an iterative and improving process.  Despite the promise of prediction and enthusiastic responses from our employees, we encountered three major problems while implementing forecasting training:

  1. Skepticism that forecasting does not work and that predictions cannot be accurate.
  2. Employees’ fear that they do not possess enough foresight to make predictions or that their predictions will be misinterpreted by managers or colleagues and used against them.
  3. Belief that there is not enough evidence to make predictions.

After successfully providing forecasting training to over 200 of our staff, we have developed several best practices to ensure the smoother roll out of future installments of the program.

Whenever I talk about predictions I ask: “Do you agree it’d be really valuable if we were 20-30% better at predicting how impactful your work would be and how long it’d take?” No one has ever disagreed.

I follow that question with the evidence such improvements are possible. Philip Tetlock found in a randomized controlled experiment that participants’ forecasting abilities could improve over 14% in under an hour by reading his instructions.

That’s typically enough to get people excited to do the hour of calibration training I’ve prepared, and the training does the rest. Hubbard has given this training to over 1,000 people at a variety of companies and industries and this is what he’s observed:

Calibration seems to eliminate many objections to probabilistic analysis in decision making. Prior to calibration training, people might feel any subjective estimate was useless. They might believe that the only way to know a [confidence interval] is to do the math they vaguely remember from first-semester statistics. They may distrust probabilistic analysis in general because all probabilities seem arbitrary to them. But after they’ve been calibrated, I have almost never heard them offer such a challenge.

Some Twitch employees were concerned that forecasting training could reveal to their colleagues their lack of foresight.  Others thought that their predictions could be misused by management. We make it explicit that predictions are a tool to make good decisions and have more impact. Being right is not the core metric for any team here.

Our calibration training is anonymous, because we don’t want people to be embarrassed by the predictions they make before they are calibrated. But we can’t rely on anonymity for the actual projects we’re pursuing, because the most important predictions are from the people closest to the project since they have the best information.

We are actively trying to build a culture that promotes “psychological safety,” defined as “a sense of confidence that the team will not reject or punish someone for speaking up.” Google found safety was the most important predictor of successful teams, and Harvard Business School professor Amy Edmondson has found it’s essential for team learning. We teach leaders to make the first forecast, explain their reasoning, and solicit forecasts from their team. The hope is that the value of the information that comes out of those conversations makes it clear that speaking up is everyone’s job.

The final objection I’ve heard is that there isn’t enough evidence to make a good forecast. But at Twitch we believe that if there is enough evidence to consider moving forward with a plan, there should be enough evidence to predict its success. Of course, not all predictions need to be rigorous and formal. We encourage employees to review the evidence they do have and make the best forecasts possible, combining both data and intuition. Being able to lean heavily on intuition is key for making quick decisions, and quantifying that intuition in the form of prediction helps us stay accountable.

Remember: we all make bets about the future, whether we call them that or not. We select a career based on perceptions about its prospects; we take on projects based on what we think we can accomplish; we hire employees based on how we predict they will perform. We don’t have an option not to make predictions in our work lives, but we do have an option to try and make better ones. Individuals can get better at forecasting, and so can entire organizations.

The author thanks Lauren Wagner, who provided expertise that greatly contributed to this article.

Don’t Spend Your Life Making Up Your Mind

May 15, 2017 - 8:05am

“Huntington Hartford, who inherited a fortune from the A. & P. grocery business and lost most of it chas­ing his dreams as an entrepreneur, arts patron, and man of leisure, died Monday at his home in Lyford Cay in the Bahamas,” reported The New York Times in 2008. “He inherited an estimated $90 million and lost an es­timated $80 million of it.”

I did the math. Mr. Hartford wasn’t exactly destitute, with $10 million left.

He made page one of The Wall Street Journal too. “Died: Huntington Hartford, 97, A&P super­market heir who depleted a fortune chasing his dreams, in the Bahamas.”

In our culture, “What are you worth?” is a question about your finances and utility, not your character. To be a “suc­cess” means you have more at the end than you did at the start. We say “you can’t take it with you” but we be­have and judge as though you can.

Certainly Mr. Hartford was lucky to have had enough money to do as he wished. Was he a failure, though, as “depleted a fortune” and “lost $80 million” suggest? Why didn’t the Times and the Journal congratu­late him for spending his fortune living his dreams? “To most Americans the worst errors are financial and in that respect I have been Horatio Alger in reverse,” said Huntington Hartford.

Long ago I worked at a job I didn’t enjoy. It wasn’t a bad job; it was secure and pleasant. I was a success, but the job just wasn’t fulfilling in the ways I wanted. I spent my spare time tinkering with the simulations, research, and writing that still fascinate me. And the more I tinkered, the more I chafed at my job.

One day I complained to someone close to me, who gave me the gift of a question: “Then why don’t you quit your job and do what you want instead?” I know the option of quitting seems obvious. It had occurred to me many times. But that was the first time I heard the “then why don’t you” part.

Why hadn’t I quit? Because I’d wrapped myself in a thicket of “have to’s.” I have to have a steady income. I have to have the respect that comes with a business card from a leading-edge company. I have to, not I want to. Assumptions, beliefs, and habits, not wrong but also not laws of nature that I have to obey.

When I noticed the self-imposed have to’s I could question their influence on my decision. I quit my job the next day. I wanted to live my dreams.

In the twenty-five years since then, I’ve gone through fat times and lean. Every time I’ve asked myself whether I made the right decision, the answer is always, immediately, viscerally yes. I know I traded security for satisfaction, and sometimes I miss the security. Other people might prefer security to satisfaction. But for me, so far, it’s been worth it. And when it’s not any more, I’ll do something else.

I don’t mean to sound glib, like “just do it.” Deciding what’s really have-to and whether to pursue want-to has consequences and risks. $90 million bought Huntington Hartford a great deal of freedom and safety, more than most of us enjoy. Still, all that money didn’t force him to live his dreams. He had to decide to do that.

Lack of money might be an obstacle to living our dreams. So might the perceived surfeit of time implied by mañana: I’ll do it tomorrow.

I can attest that mañana is especially tempting on agonizing decisions. I was stuck for months on such a decision. Two things got me unstuck. One was reframing the decision before me. I’d tried but just couldn’t answer “What can I do to cause the outcome I want?” I switched to “What are the best and worst out­comes I can expect?” I answered that question immediately. I knew the answer was true even though I didn’t like it.

But what really unstuck me was advice from my best friend, a man I’d known for almost 40 years. He said, “Don’t spend your life making up your mind.” He knew what he was talking about. It was our last conversation, three days before he died of leukemia.

You spend your life making decisions. Meanwhile, things change. Your values change. Your dreams change. What broke your heart or made your day at 4 is inconsequential at 40. What breaks your heart or makes your day at 40 was incompre­hen­sible at 20. And there will come a day when you would give everything you have left to have what you have right now.

Can Snapchat Survive If Facebook Copies All Its Best Features?

May 12, 2017 - 2:34pm

To be successful, a company needs to provide something customers want. It must be able to do so for less than they’re willing to pay. And there must be some reason why competitors can’t just copy it when it succeeds. In management terms, it needs a value proposition, a business model, and a strategy.

Snap is doing well on the first two. It has a product that lots of people like, and there’s at least the prospect of Snap eventually becoming very profitable, its first earnings report notwithstanding. But it’s struggling with the third (strategy) because Instagram has been copying its most popular features.

When Snap CEO Evan Spiegel was asked about Facebook, Instagram’s parent company, on Snap’s first earnings call, he quipped: “Just because Yahoo has a search box, it doesn’t mean they’re Google.” That’s true, but it doesn’t necessarily imply what Spiegel needs it to.

In fact, his response reflects a decades-old debate over what strategy is, one that’s being relitigated in the digital age.

In Snap’s S-1, the company says:

Our strategy is to invest in product innovation and take risks to improve our camera platform…. In a world where anyone can distribute products instantly and provide them for free, the best way to compete is by innovating to create the most engaging products.

Raffaella Sadun, a professor at Harvard Business School, says the challenge for Snap is that “great product is different from great strategy.” As Ben Thompson noted, “Most companies use their S-1 to explain how they are building a sustainable competitive advantage — a moat, if you will. Snap is declaring that moats no longer exist.”

One reason why it’s so hard for Snap to articulate a traditional strategy is that, arguably, the best one is already taken by Facebook. The way you make money with a social network is through network effects. The more users you have, the more valuable the platform becomes for all your users; hence scale becomes a powerful competitive advantage. But if that’s where the value is, Facebook will beat Snap every time. For instance, Instagram launched Stories, a feature seemingly derivative of Snapchat, in August 2016. Just seven months later, Instagram Stories had more daily users than Snapchat.

So, Spiegel needs to articulate a theory of why Facebook can’t copy Snap’s product innovations and then use them to capture even more value through its larger network. To date, his answer has been innovation. That puts him firmly on one side of the long-running strategy debate. Is it sufficient to develop capabilities that seem hard for competitors to imitate, like building camera-based social applications? Or does sustainable strategy require more?

The debate over how sustainable “operational advantages” are continues to this day. But even if one grants that certain capabilities can be hard to imitate, Spiegel needs to explain why Snap’s are.

In a recent paper, economists Joshua Gans and Scott Stern argue that execution can form the basis of sustainable advantage for entrepreneurs, but only under certain conditions. In their model, execution-focused strategies help startups get to market quickly and start learning from customers, “allowing the firm to ‘get ahead, stay ahead.’” It’s not clear that this applies to Snap, which came to market later than Facebook and so has had less chance to learn from users.

“Anyone can say they are executing but actually doing it is another matter,” Gans wrote about Snap on his blog in February. “Snapchat hasn’t proven itself out yet.”

And it doesn’t help that Spiegel seems to be misinterpreting Google’s success in relation to Yahoo. Google didn’t get where it is by only building great products. It built great products and then fended off competitors by acquiring them or by using its huge user base and massive data trove to improve its products in ways that rivals couldn’t. Google had a strategy.

Thompson has compared Snap favorably to Apple, an extremely successful company known for its hard-to-imitate product expertise. But Apple has benefited from controlling key ecosystems, like iTunes and iOS. And it has benefited from focusing on a particularly lucrative part of the hardware market: high-end, high-margin devices aimed at wealthier customers. It’s not clear what the equivalent is in Snap’s case.

None of this is to say that Snap can’t succeed. Sadun notes that Snap’s success will depend on whether advertisers see it as a complement to Facebook or a substitute, as well as whether Snap can capture a segment of valuable users and find a way to keep them from switching to Instagram.

Earlier this week the New York Times asked readers which of the big five tech companies they could most easily cut ties with. As of this writing, Facebook was by far the most popular choice. So while Facebook’s network effects are certainly powerful, they’re not necessarily insurmountable.

Your Brain Can Only Take So Much Focus

May 12, 2017 - 12:00pm

The ability to focus is an important driver of excellence. Focused techniques such as to-do lists, timetables, and calendar reminders all help people to stay on task. Few would argue with that, and even if they did, there is evidence to support the idea that resisting distraction and staying present have benefits: practicing mindfulness for 10 minutes a day, for example, can enhance leadership effectiveness by helping you become more able to regulate your emotions and make sense of past experiences.  Yet as helpful as focus can be, there’s also a downside to focus as it is commonly viewed.

The problem is that excessive focus exhausts the focus circuits in your brain. It can drain your energy and make you lose self-control. This energy drain can also make you more impulsive and less helpful. As a result, decisions are poorly thought-out, and you become less collaborative.

So what do we do then? Focus or unfocus?

In keeping with recent research, both focus and unfocus are vital. The brain operates optimally when it toggles between focus and unfocus, allowing you to develop resilience, enhance creativity, and make better decisions too.

When you unfocus, you engage a brain circuit called the “default mode network.” Abbreviated as the DMN, we used to think of this circuit as the Do Mostly Nothing circuit because it only came on when you stopped focusing effortfully. Yet, when “at rest”, this circuit uses 20% of the body’s energy (compared to the comparatively small 5% that any effort will require).

The DMN needs this energy because it is doing anything but resting. Under the brain’s conscious radar, it activates old memories, goes back and forth between the past, present, and future, and recombines different ideas. Using this new and previously inaccessible data, you develop enhanced self-awareness and a sense of personal relevance. And you can imagine creative solutions or predict the future, thereby leading to better decision-making too. The DMN also helps you tune into other people’s thinking, thereby improving team understanding and cohesion.

There are many simple and effective ways to activate this circuit in the course of a day.

Using positive constructive daydreaming (PCD): PCD is a type of mind-wandering different from slipping into a daydream or guiltily rehashing worries. When you build it into your day deliberately, it can boost your creativity, strengthen your leadership ability, and also-re-energize the brain. To start PCD, you choose a low-key activity such as knitting, gardening or casual reading, then wander into the recesses of your mind. But unlike slipping into a daydream or guilty-dysphoric daydreaming, you might first imagine something playful and wishful—like running through the woods, or lying on a yacht. Then you swivel your attention from the external world to the internal space of your mind with this image in mind while still doing the low-key activity.

Studied for decades by Jerome Singer, PCD activates the DMN and metaphorically changes the silverware that your brain uses to find information. While focused attention is like a fork—picking up obvious conscious thoughts that you have, PCD commissions a different set of silverware—a spoon for scooping up the delicious mélange of flavors of your identity (the scent of your grandmother, the feeling of satisfaction with the first bite of apple-pie on a crisp fall day), chopsticks for connecting ideas across your brain (to enhance innovation), and a marrow spoon for getting into the nooks and crannies of your brain to pick up long-lost memories that are a vital part of your identity. In this state, your sense of “self” is enhanced—which, according to Warren Bennis, is the essence of leadership. I call this the psychological center of gravity, a grounding mechanism (part of your mental “six-pack”) that helps you enhance your agility and manage change more effectively too.

Taking a nap: In addition to building in time for PCD, leaders can also consider authorized napping. Not all naps are the same. When your brain is in a slump, your clarity and creativity are compromised. After a 10-minute nap, studies show that you become much clearer and more alert. But if it’s a creative task you have in front of you, you will likely need a full 90 minutes for more complete brain refreshing. Your brain requires this longer time to make more associations, and dredge up ideas that are in the nooks and crannies of your memory network.

Pretending to be someone else: When you’re stuck in a creative process, unfocus may also come to the rescue when you embody and live out an entirely different personality. In 2016, educational psychologists, Denis Dumas and Kevin Dunbar found that people who try to solve creative problems are more successful if they behave like an eccentric poet than a rigid librarian. Given a test in which they have to come up with as many uses as possible for any object (e.g. a brick) those who behave like eccentric poets have superior creative performance. This finding holds even if the same person takes on a different identity.

When in a creative deadlock, try this exercise of embodying a different identity. It will likely get you out of your own head, and allow you to think from another person’s perspective. I call this psychological halloweenism.

For years, focus has been the venerated ability amongst all abilities. Since we spend 46.9% of our days with our minds wandering away from a task at hand, we crave the ability to keep it fixed and on task. Yet, if we built PCD, 10- and 90- minute naps, and psychological halloweenism into our days, we would likely preserve focus for when we need it, and use it much more efficiently too. More importantly, unfocus will allow us to update information in the brain, giving us access to deeper parts of ourselves and enhancing our agility, creativity and decision-making too.

Recessions Push People to Buy Cheap Things, Which Just Makes Everything Worse

May 12, 2017 - 11:00am

The U.S. labor market is like an aging athlete; it is taking longer and longer to recover from recessions.  It took two and a half years to regain the jobs lost during the 1990-92 recession. The next recession, which came in 2001, was short and mild (GDP barely fell), but it took four years for the job market to heal, prompting the Federal Reserve to administer the economy a long course of low interest rates. Then came the Great Recession. It took seven years for employment to return to its 2007 level. It is taking even longer for real wages to recover–they are still below their pre-recession trend.

What’s behind these “jobless recoveries”? In 2016, an influential study by Nir Jaimovich and Henry Siu showed that jobless recoveries occur because routine jobs are permanently eliminated during recessions. Firms strive to cut costs during downturns and in the past quarter century automation and outsourcing have made jobs a juicy target for cost-cutting. Unfortunately for workers, once a call center is automated or production is outsourced to China, those jobs don’t come back when the U.S. economy recovers.

But there’s more to it than that. In recent work, Nir Jaimovich, Arlene Wong, and I show that consumer behavior is contributing to deeper recessions and slower recoveries. During downturns, consumers “trade down” to economize; that is, they reduce the quality of the goods and services they consume. To wit: Fast foods restaurants like McDonalds and Chipotle and general merchandise stores like Target and Walmart gained market share during the Great Recession. Trading down makes sense at an individual level but at a macro level it creates a trap because goods and services of lower quality are produced with less labor than those of higher quality. So, as consumers flock to lower quality goods, they reduce the demand for American labor, adding to the woes of the recession. In some cases, trading down persists after the recession ends (consumers are by and large creatures of habit) adding to the time it takes for the job market to recover.

Restaurants and supermarkets are clear examples of the association between quality and labor intensity. The number of employees per meal served is lower in a fast-food restaurant like Wendy’s than in a mid-scale restaurant like Bakers Square. (And it is much lower at Bakers Square than at a fine dining restaurant like Chicago’s famed Alinea.) Whole Foods, an upscale supermarket, employs six workers per million dollar of sales. The company does not want customers to wait in the cashier line so, as soon as there are more than a few people in line, the store manager opens up another cashier. Safeway, a supermarket that targets the middle class, employs four workers per million dollar of sales, which is why it has longer cashier lines than Whole Foods. The lines are even longer at Sam’s Club, which employs only two workers per million dollars of sales. Every million dollar of sales that moves from Whole Foods to Safeway or from Safeway to Sam’s club leads to the loss of two jobs. (And now even Whole Foods is under pressure to reduce costs).

In the U.S. the availability of lower quality, inexpensive goods produced in developing countries has increased over time. This wider availability has presented consumers with more opportunities to trade down, exacerbating the decline in labor demand that occurs during recessions.

These new trends raise important questions for companies: Should firms change the positioning of their brands? Should they launch frugal brands during recessions? They also leave policy makers with a new challenge: what is the most effective way to train routine workers so they can more quickly find new occupations?

What the Rise of Russian Hackers Means for Your Business

May 12, 2017 - 10:15am

For years major businesses have contended with hackers attempting to break into their networks and steal their data. In the recent past, that threat mostly emanated from China. Now, a new threat has emerged that companies must address: a savvy, resource-rich, risk-taking gang of hackers with ties to Russia. If the Chinese were the drunk burglars of cyberspace (to quote former FBI director James Comey), these Russians are stone-cold sober thugs.

On the geopolitical stage, Russian hackers have been busy: Their targets have included Estonia (using overwhelming denial-of-service attacks), Georgia (supporting ground operations with cyber operations), Germany (achieving unauthorized access to servers in the legislature), and the United States (stealing data from the Democratic National Committee and emails from John Podesta). But with the U.S. Department of Justice’s (DOJ) indictment of four Russian hackers for breaching Yahoo, the U.S. government is now on record that Russia’s targets are not just geopolitical — businesses are very much at risk as well.

How does the Russian cyber threat (regardless of the Russian government’s involvement) affect your business, and what can you do about it?

Insight Center Motives

The motivations behind Russian hackers are the most diverse of any team with government connections. In recent years, the Chinese frequently stole sensitive commercial data, such as intellectual property, to gain competitive advantages for their state-owned enterprises. The North Koreans lashed out against Sony Pictures to protest a not-quite-Oscar-worthy film that featured the dramatic death of Kim Jong-un. As noted above, the Russians have attacked in cyberspace to further their geopolitical interests, but their hacking activities also form an integral part of a more sophisticated criminal enterprise, bent on extortion and profiteering. The Russian security services have extensive ties with the criminal underworld, and whether their hackers are working for the government or the mob can at times be a meaningless distinction. As highlighted in the DOJ indictment, sometimes the Russian government will target businesses to further its intelligence activities. Other times, it will work with criminal elements for criminal purposes. As a result, businesses and governments are both targets. The upshot: Your business can become a target not because these hackers see intrinsic value in your data, but because you may be a comparatively easy target.


After breaches at Target and Home Depot, boards were put on notice that cybersecurity was a cost to be internalized going forward. Credit monitoring for victims was only one of a myriad of expenses for which to account. Other expenses included hiring outside cyber forensics experts to expel hackers from networks, and recruiting experienced chief information security officers to keep the business secure. But the Russian attack on Yahoo revealed how these kinds of attacks can have severe indirect costs as well: Verizon reached new terms for its acquisition of Yahoo and exacted a $350 million discount toward its purchase price because of the Russian hacks. These hackers also modified Yahoo’s search engine results to further their own criminal goals. Such a significant M&A haircut and risk to Yahoo’s core product, all because of a cyber intrusion, should motivate businesses to double down on proactive efforts to improve cybersecurity before incidents occur.

Related Video Boards Neglect Cybersecurity at Their Companies’ Peril The average breach costs around $4 million. See More Videos > See More Videos > Tactics

The techniques in the Russian hacker tool kit are diverse. But just because Russian hackers can bring their A-game to a cyber fight does not mean they always need to. Even the most sophisticated hackers will default to unsophisticated techniques if those prove the easiest and cheapest way in. In their breach of Yahoo, they employed the delicious-sounding tactic of “cookie minting”, a way to gain access to an account without being challenged for typical authentication checks, like a password, as one part of their operation. Yet the tried-and-true junior-varsity tactic of spear phishing once again seems to have positioned the attackers for success. Your business already should have been focusing on blocking junior-varsity attacks for the last several years; now it will also need to account for more creative, varsity-level attacks, which will require experience, patience, and vigilance to counter.

Protecting your business from this evolving threat will not be easy, but it need not require magical defensive prowess. Consider the following approaches:

Get your priorities straight. Trying to protect all your data, systems, and networks from all forms of malicious cyber activity? Forget it. The first step to any defensive approach is to determine which assets must be defended. What data is so critical to your company that unauthorized access to it would be a disaster? What data must be available 24/7/365? What data do you need to store? If your answer is “all of it,” you’re doing security wrong.

Presume you will be breached. You should hold your cybersecurity team (you know who they are, right?) accountable for ensuring compliance with fundamental standards for information security. But while compliance remains crucial, it is entirely insufficient to address a threat landscape that rapidly evolves. Assume that compliance is imperfect and that an adversary is already exploiting this imperfection. Investing in your company’s resilience in the face of cyberattacks that target your top priorities will be critical. What resilience looks like depends on the type of work you do and on your priorities. For example, if there is a particular system whose availability is required 24/7/365, have you tested fallback mechanisms and backups?

Have a strategic communications plan. When you confirm that your company has in fact been breached, you will need to determine what to say, to whom, and how. Plan this ahead of time. Do not wait until you are in the midst of a cyberattack to brainstorm how, what, and when to communicate with your board, your shareholders, and your clients. You need not account for every contingency, but you can begin by ordering research on how other companies have managed (or failed to manage) the strategic communications aspect of a cyberattack.

Know that there is safety in numbers. You are not alone. If criminal hackers are victimizing your company, chances are good that they are after others proximate to your company as well. Information sharing has long been a talking point for cybersecurity evangelists. But most of the time the shared information is untimely and unhelpful. So look at how participation in initiatives like Facebook’s Threat Exchange service can help your company not just gain access to relevant and timely information but also act on it before it is too late.

Form relationships with law enforcement. Working with law enforcement is not a short-term solution for most companies’ cybersecurity challenges. Businesses often describe their relationship with law enforcement on cybersecurity as “give-and-take” — the companies give information, and law enforcement takes it and then disappears. But we can see a change in its approach to cyber criminals: The U.S. Justice Department has worked with victims on multiple indictments, even against state-sponsored and resourced hackers. And in certain situations the FBI can tip off a company to a threat the firm may not be aware of. Never bet the farm that the government will protect your business from a cyberattack, but be open to and prepared for the day when it might give you some news you can use to protect yourself.

What’s a business to do, given the threats described here? Believe it or not, the information security issues associated with cybercrime are not all that new, even though the Russian connection to it is now more overt. Don’t freak out. But do get serious. Gone are the days when the only risk was having sensitive data stolen. Progress begins with you — what data and which systems are most important to your company? Prioritize from there. You can’t build perfect walls, and there is no silver bullet in cybersecurity, so don’t let your CIO or CISO tell you otherwise. You’ll need a diversity of approaches, and those approaches will have to evolve over time. If you didn’t believe it already, believe it now: The cyber threat has arrived as a clear and present risk to businesses today, and addressing it will become a growing cost of doing business.

CEOs Who Began Their Careers During Booms Tend to Be Less Ethical

May 12, 2017 - 9:00am

When Alan Greenspan addressed the Harvard University class of 1999, he shared a message of wealth and prosperity that was reflected in many aspects of American life. “You are being bequeathed the tools for achieving a material existence that neither my generation nor any that preceded it could have even remotely imagined as we began our life’s work,” he told the new graduates. The stock market had more than doubled in the previous five years, and the unemployment rate was at a 30-year low. The United States, Greenspan reminded graduates, was enjoying, “the greatest prosperity the world has ever experienced.”

Imagine you were sitting in the audience that day, about to begin constructing your career. What might you have expected the future to hold? Would these expectations have been different if you had entered the working world just 10 years later, during the Great Recession?

Young adulthood tends to be a particularly impressionable period of life. People often have a strong affinity for movies, music, and books that were popular during these formative years. It is also a time when people explore and solidify attitudes. The state of the economy can affect which values and concerns people champion for the rest of their lives. For instance, people who entered adulthood during economic depressions tend to be attuned to economic and national security throughout their adult lives, and particularly cautious with their personal and professional finances.

Entering adulthood in a boom or a bust can also have implications for your behavior at work, even decades later. CEOs who began their careers in prosperous times tend to use riskier financial strategies than CEOs who first entered the workforce in recessions. Those coming of age during booms tend to be more excessively confident in their own abilities, believe they are entitled to better outcomes, and pay themselves substantially more than other top executives.

Based on these previous findings, we wondered: Would CEOs who began their careers during boom times be less ethical?

Our question stemmed from the idea that prosperous times are often linked to ethical missteps. During booms, credit eases, conspicuous consumption proliferates, and fortunes swell. Speculation, swindling, and fraud often thrive as more people seek a piece of the expanding wealth, and wrongdoing is easier to hide under outsize profits. Moreover, risk appetite, optimism, and overconfidence increase during booms, any of which can increase the likelihood of someone traversing ethical lines. Indeed, social commentators have long noted that nearly every economic boom in United States history is associated with widespread unethical behavior, ranging from pervasive corruption during the Gilded Age to the sub-prime lending practices of the mid-2000s.

Given that early career conditions can leave an enduring mark on the work systems and mental models that people carry with them throughout their adult lives, we expected that CEOs who began their careers in good economic times would be more likely to cheat later on. For CEOs who began their careers when jobs were plentiful and ethical shortcuts were more prevalent, cutting corners or bending rules may become the template for how things are done and what it takes to succeed and survive. Once people become adept at rationalizing unethical actions (e.g., “I’m simply getting what I deserve”), these ways of thinking tend to be carried to other situations and domains.

We tested our hypothesis by examining the stock option backdating done by 2,012 American CEOs during a 10-year period, from 1996 to 2005. Backdating was a fairly common unethical, and almost always illegal, practice during this time period. Here’s how it worked: A CEO would receive a stock option grant on one date but report to the SEC that the grant was received on a different date, when the stock price was lower. This would allow a CEO to realize a larger financial gain when they sold the stock, by falsifying financial records and lying to the SEC. In March 2006 the Wall Street Journal published a story chronicling the suspiciously lucky timing of stock option awards at six large companies. After that, many CEOs were fired or forced to return ill-gotten gains, and reporting requirements were changed to make backdating much more difficult.

Backdating is very difficult to prove beyond a reasonable doubt, because there is always a chance that a CEO was simply extremely lucky. This is why so few executives were criminally convicted of backdating. But it is possible to identify CEOs who were repeatedly, suspiciously lucky. Drawing on a procedure developed by other scholars, we considered a stock likely to have been backdated if it was received on one of the most favorable days of the reporting period. While it’s probable that some CEOs were incredibly lucky, studies have repeatedly shown that CEOs were “lucky” much more often than chance alone would predict. Indeed, based on our procedure, 2.5% of grants should have been awarded on incredibly lucky dates by chance alone. In our sample, however, nearly 15% of grants were received on extremely lucky dates.

We then gathered information on the educational history of each CEO in our sample. We compiled information about where each CEO went to school, what degrees they earned, and the year they graduated (primarily in the 1960s, 1970s, and 1980s). We then examined whether CEOs who earned their highest degrees in best economic times, when the unemployment rate was particularly low, were more likely to backdate their stock options. They were. Even after adjusting for firm size, industry, number of options granted, and other factors, we found that CEOs who graduated in the best economic times were approximately 30% more likely to falsify the dates of their stock option grants than CEOs who graduated in the worst economic times. Quite simply, CEOs who began their careers in a boom were more likely to cheat.

There is no question that graduating during a recession has downsides. Recession graduates tend to earn less and hold less-prestigious positions than their boom-time peers. If they do become CEOs, research suggests they will probably lead smaller, less prestigious companies. Despite these disadvantages, recession graduates may make particularly good employees and executives. Other work has shown that these graduates are more satisfied workers, are less narcissistic, and tend to stay with their companies longer. Our work suggests that they may be more ethical, too.

How to Become a Coach or Consultant After You Retire

May 12, 2017 - 8:05am

The vast majority of senior professionals don’t want to “retire.” They have interesting, fulfilling work that they’d like to continue — just not at the frenetic pace of top corporate jobs. That’s why so many, lured by the promise of flexible hours, higher rates, and location independence, are intrigued by the idea of becoming a consultant or coach when they retire from their “official” career. Of course, competition for these plum positions is growing. A 2016 study estimated that there are more than 53,300 professional coaches worldwide, and the British paper The Independent pegged the number of management consultants at 500,000.

How can you differentiate yourself in a crowded field filled with your high-level peers (54% of coaches are age 50+)? Here are five things to keep in mind if you’d like to become a consultant or coach after you retire.

Give yourself sufficient runway. Any career change is disruptive to a certain extent. The more time you give yourself to plan and prepare, the better off you’ll be (one to two years is good, and three to four years is better). Albert DiBernardo, who is now the head of strategy and development for a major engineering firm, told his board three years ago that he’d be retiring at age 65, and in his performance review last year set a specific departure date: December 31, 2017. “My ‘new beginning’ was cast in that moment,” he said, “and it felt great.”

Though some people might be concerned about acquiring “lame duck” status, giving your company plenty of time for succession planning allows you to make a thoughtful departure and cap your career knowing your legacy is in good hands. Even if you prefer not to tell colleagues about your intentions so far in advance, creating your own internal timetable can allow you to plan your finances and any life changes (moving, selling your house, etc.) that your retirement and new career might entail.

Do a skills analysis. Over the years you’ve probably become an expert in your field. But becoming an independent coach or consultant requires a suite of entrepreneurial abilities on top of your subject matter knowledge. If you’ve given yourself a sufficient planning horizon, you can take the opportunity to bolster necessary skills, such as public speaking and social media. (I’ve created a free self-evaluation tool kit to help you determine where it’s most fruitful to focus your efforts.)

You and Your Team Series Career Transitions

You might also consider pursuing a certification — though debates rage about whether these are worthwhile — or taking targeted courses to accelerate your knowledge. They could be executive education courses offered by universities, or programs offered directly by professionals about everything from creating online courses to becoming a recognized expert.

Start recruiting clients. Too many aspiring coaches and consultants waste time at the outset dithering about the administrative details of their business, like what color their logo should be. All of that is a moot point until you have actual clients, so recruiting them should be your first priority. To gain experience as a coach or consultant, take on a few volunteer clients on the side, while you’re still employed, in exchange for testimonials and future referrals (assuming it’s a good experience).

As a seasoned professional, you may have an advantage that your younger colleagues don’t: a network you’ve spent decades building, including other senior leaders who can hire you.

As you approach your retirement date, start letting your existing contacts know about your future plans, as they may become your initial clients. Roxann Kriete, the former head of an education nonprofit and the subject of a profile in my book Reinventing You, did zero marketing for her new consulting business when she retired, because she’d already received offers for more consulting work than she could handle.

Similarly, DiBernardo has been lining up future clients not through any hard-core sales tactics but simply by sharing his plans with longtime colleagues who appreciate his talents. “I’ve had some relatively senior professionals say that they would hire me in a heartbeat to coach them,” he says. “Unbeknownst to me, they say I already have, all these years.”

Prepare your marketing. Depending on the amount of consulting work you’d like to take on, you may never have to market yourself; your existing network may offer up all the work you’d like. But if you want or need to expand beyond that, make sure you’re focused on the right things. Some professionals spend untold hours on surface accoutrements like their business card design or what their “slogan” should be. (If you can dream up something catchy, great, but no consultant or coach actually needs one.)

Recognize the goal of your marketing: establishing a baseline of credibility for when a potential client checks you out. Focus on creating a professional-looking website with testimonials and a social media presence on at least one channel, so that there’s a reasonable amount of information about your business online. For instance, you could blog on LinkedIn or another professional site.

Give yourself a break. Starting a coaching or consulting business can feel overwhelming, since there’s pressure to tackle everything at once. So start slow. Most senior professionals don’t want to immediately dive into the hurly-burly of a new career; 52% of respondents to a Merrill Lynch survey reported taking a sabbatical of some length after their official retirement. Even when you’re not officially working, you can spend that time preparing in a low-key way, such as building your skills and lining up future clients, as described above.

When you’re launching a new consulting venture, it’s easy to get distracted by the multiplicity of options — there are plenty of business-building activities you could be pursuing. Focus on getting the important things right: Understand what skills you can bring to your clients, leverage your network to find them, and then market just enough to attract the right amount of new clients, whether you’re looking to build a robust business or simply stay engaged with a few projects on the side.

Consulting and coaching — which are flexible, interesting, and often high-prestige — are ideal second careers for retired professionals. Competition is fierce, but by following the steps above you can lay the groundwork for a fulfilling venture that you can pursue for the rest of your life.

How to Survive Being Labeled a Star

May 11, 2017 - 5:01pm

Jennifer Petriglieri, professor at INSEAD, discusses how talented employees can avoid being crushed by lofty expectations — whether their own, or others’. She has researched how people seen as “high potential” often start to feel trapped and ultimately burn out. Petriglieri discusses practical ways employees can handle this, and come to see this difficult phase as a career rite of passage. She’s the co-author of “The Talent Curse” in the May-June 2017 issue of Harvard Business Review.

Download this podcast

Prevent Burnout by Making Compassion a Habit

May 11, 2017 - 12:45pm

“I am sick to death of the ridiculous situations I have to deal with at work. The pettiness, the politics, the stupidity — it’s out of control. This kind of thing stresses me out to the max.”

Stress a happiness killer. And life is just too short to be unhappy at work. But we hear this kind of thing all the time from leaders in industries as varied as financial services, education, pharmaceuticals, and health care. In our coaching and consulting, we’re seeing a spike in the number of leaders who used to love their jobs but now say things like, “I’m not sure it’s worth it anymore.” They’re burned out — emotionally exhausted and cynical, as a result of chronic and acute work stress.

Why is stress on the rise? A lot of it has to do with uncertainty in the world and constant changes in our organizations. Many people are overworking, putting in more hours than ever before. The lines between work and home have blurred or disappeared. Add to that persistent (sometimes even toxic) conflicts with bosses and coworkers that put us on guard and make us irritable. Under these circumstances, our performance and well-being suffer. Work feels like a burden. Burnout is just around the corner. And happiness at work is not even a remote possibility.

Here’s the good news: Some people don’t get burned out. They continue to thrive despite the difficult conditions in their workplace.

Why? The answer lies in part with empathy, an emotional intelligence competency packed with potent stress-taming powers. Empathy is “compassion in action.” When you engage empathy, you seek to understand people’s needs, desires, and point of view. You feel and express genuine concern for their well-being, and then you act on it.

You and Your Team Series Stress

One of our studies (Kandi’s research on executive-level health care leaders) confirms this. When asked how they deal with chronic and acute work stress, 91% of the study’s executives described how expressing empathy allows them to stop focusing on themselves and connect with others on a much deeper level. Other researchers agree (see here, here, and here for examples): Expressing empathy produces physiological effects that calm us in the moment and strengthen our long-term sustainability. It evokes responses in our body that arouse the (good) parasympathetic nervous system, and it reverses the effects of the stress response brought on by the (bad) sympathetic nervous system. So not only do others benefit from our empathy, but we benefit, too.

Based on our research, Annie’s with leaders in global companies and Kandi’s with health care leaders, we offer a two-part strategy that can help unleash empathy and break the burnout cycle. First, you need to practice self-compassion. Then you will be ready to change some of your habitual ways of dealing with people so you — and they — can benefit from your empathy.

Practice Self-Compassion

If you really want to deal with stress, you’ve got to stop trying to be a hero and start caring for and about yourself. Self-compassion involves: (1) seeking to truly understand yourself and what you are experiencing emotionally, physically, and intellectually at work; (2) caring for yourself, as opposed to shutting down; and (3) acting to help yourself. Here are two practical ways to practice self-compassion:

  • Curb the urge to overwork. When the pressure is on at work, we’re often tempted to work more hours to “get on top of things.” But overwork is a trap, not a solution. Just doing more — and more, and more, and more — rarely fixes problems, and it usually makes things worse, because we are essentially manufacturing our own stress. We shut the proverbial door on people and problems, thinking that if we can get away, we can at least do our job without getting caught up in others’ drama. When nothing changes or it gets worse, we give up. This is a vicious cycle: Overwork leads to more stress, which leads to isolation, which causes us to give up, which leads to even more stress. So, instead of putting in more hours when you’re stressed, find ways to renew yourself. Exercise, practice mindfulness, spend more time with loved ones, and dare we say get more sleep?
  • Stop beating yourself up. Stress is often the result of being too hard on ourselves when we fail or don’t meet our own expectations. We forget to treat ourselves as living, breathing, feeling human beings. Instead of letting self-criticism stress you out, acknowledge how you feel, acknowledge that others would feel similarly in the same situation, and be kind and forgiving to yourself. Shifting your mindset from threatened to self-compassion will strengthen your resiliency.
Give Empathy

Taking steps toward self-compassion will prepare you emotionally to reach out to others. But let’s face it: Empathy is not the norm in many workplaces. In fact, lack of empathy, even depersonalization of others, are symptoms of the emotional exhaustion that comes with burnout. Here are a few tips to make empathy part of your normal way of dealing with people at work.

  • Build friendships with people you like at work. Most people can rattle off a dozen reasons why you shouldn’t be friends with people at work. We believe just the opposite. Real connections and friendships at work matter — a lot. According to the Harvard Grant Study, one of the longest-running longitudinal studies of human development, having warm relationships is essential to health, well-being, and happiness. Other research shows that caring for and feeling cared for by others lowers our blood pressure, enhances our immunity, and leads to overall better health.
  • Value people for who they really are. The “ridiculous situations” mentioned by the leader at the beginning of this article are often the result of miscommunication and misunderstanding. Instead of really listening, we hear what we want to, which is misinformed by biases and stereotypes. It gets in the way of our ability to understand and connect with others. The resulting conflicts cause a lot of unnecessary stress. To prevent this, be curious about people. Ask yourself, “How can I understand where this person is coming from?” Listen with an open mind so that you gain their trust, which is good for your stress level and your ability to influence them.
  • Coach people. According to research by Richard Boyatzis, Melvin Smith, and ‘Alim Beveridge, coaching others has positive psychophysiological effects that restore the body’s natural healing and growth processes and improves stamina. When we care enough to invest time in developing others, we become less preoccupied with ourselves, which balances the toxic effects of stress and burnout.
  • Put your customers, clients, or patients at the center of your conversations. If misaligned goals with coworkers is a source of your stress, try physically moving your conversations to a place where you can put other people’s needs at the center. One chief medical officer who participated in Kandi’s study described a time when he had an intense, stressful argument with two other physicians about the treatment plan for a terminally ill cancer patient. They were in a conference room debating and debating, with no progress on a decision. Seeing that everyone’s professional conduct was declining and stress levels were rising, the CMO decided to take the conversation to the patient’s room. He sat on one side of the patient’s bed, holding her hand. The other two physicians sat on the opposite side of the bed, holding her other hand. They began talking again, but this time literally with the patient at the center of their conversation. As the CMO said, “The conversation took on a very different tone when we were able to refocus. Everyone was calm. It brought us to the same level. We were connected. It was a very effective antidote to stress.”

One caution about empathy and compassion: They can be powerful forces in our fight against stress — until they aren’t. Caring too much can hurt. Overextending your empathy can take a toll on your emotional resources and lead to compassion fatigue, a phenomenon that occurs when compassion becomes a burden and results in even more stress. So pay close attention to your limits and develop strategies to rein in excessive empathy if it gets out of control.

It’s worth the risk, though. Once you commit to caring about yourself, you can start to care about others, and in the process you will create resonant relationships that are both good for you and good for the people you work with.

What the U.S. Military Can Teach Companies About Supporting Employees’ Families

May 11, 2017 - 11:00am

There’s an unexpected source of insight, solutions, and resolve for all working parents grappling with the dual failure-is-not-an-option challenges of managing career and kids — and for every organization struggling to find meaningful, practical ways to support its working-parent employees.

That source is the U.S. military.

Whatever your background, or your perspective on U.S. politics and actions abroad, it’s hard to argue that over the past 15-plus years of constant military activity, and the associated deployments, redeployments, and other extraordinary demands made on military professionals and their families, the U.S.’s armed forces now have more experience facing working-parent problems than many or most organizations. As one of the senior leaders in the government’s office of Military Community & Family Policy told me, “The number one reason for military professionals not being battle-ready is worry about the people at home.”

In the face of that ongoing challenge, the military and the individuals within it have sought out practical, creative solutions that work. Some of these fixes are large, systemic, and difficult to replicate. For example, the military’s high-quality, funded day care would be difficult to offer at an entrepreneurial startup, or even at most large cost-conscious companies.

But many other recent approaches are within reach of all organizations, regardless of focus or resources, and are workable for both supportive frontline managers and individual mothers and fathers.

Here are a few of these practices, based on my interviews with experienced military service professionals in various branches and roles. Regardless of industry, function, or family structure, professionals in high-stakes, high-demand fields may be able to implement them in their homes, careers, and corporations.

Prioritize predictability. Military hours are long, demands are high, time away from home is frequent and extended, and priorities and needs are constantly shifting — all conditions that, as in the corporate world, make things tough for working parents. As a counterweight to these demands, military leaders are expected to, as one U.S. Army commander told me, “control the controllables,” to make all scheduled, regular commitments as predictable as possible. If an officers’ meeting or training exercise is scheduled to end at 6 PM, it ends at 6 PM — not at 6:22. Employees can plan their schedules and child care, making it to day-care pickup, the soccer game, or family dinner on time and as promised. Predictability, not just flexibility, helps working parents meet the needs of their dual roles. Insist on ending the weekly sales meeting on time, and you’re more likely to keep your high-performing working-parent employees.

Keep work routines consistent — even when they aren’t. People in careers that demand extended travel and prolonged periods of intense work naturally want to shut off in between projects. “It used to be that you’d get home from a deployment, get in the car, and go home and do nothing for three weeks,” says Scott Snook, former U.S. Army colonel and former director of West Point’s Center for Leadership and Organizations Research, “but it turns out, that’s basically the worst thing you can do.” Sudden, drastic switches in routine don’t just knock professionals off their game at work; they wreak havoc on relationships at home, particularly with young children. Now the military encourages returning soldiers to adopt moderate, workable schedules, ones that lessen the dramatic shift between “on” and “off” periods, for both soldier and family. In the private sector, if you’re a consultant returning from a long business trip, or an accountant with downtime after tax-filing season has passed, don’t “overcorrect” for your time away from home — find a moderate routine that works for your business and kids alike.

Advertise and destigmatize the resources your organization offers. “The military, like many corporations, offers many different family-support programs, but the key is encouraging employees to actually use them,” says the official from the Family Policy office, “and it’s very hard to achieve that if your culture leaves people who could benefit from these resources feeling isolated or belittled.” Thus military leaders are encouraged to talk openly with their staff about programs and resources for families; advertisements and visual reminders of the services are placed where soldiers can see them; and staff members knowledgeable about programs are encouraged to spend time circulating around military installations and discussing them. The counseling and resources available through your employee assistance program are unlikely to do your people any good if they’re known only to a select few on the HR floor.

Connect working parents to each other. The more that working parents in your organization can easily access other working parents — and the relevant, culturally attuned advice, encouragement, and solutions they can offer — the more successful they will be on the job, and the more they’ll want to stay in it. In the military, support comes largely through a peer-to-peer model: When a military family needs help, they ask another military family. The same is likely true within your organization. An informal working-parents network, or a working-parent page on your corporate intranet, could be the most powerful tool for retention and support of your working-parent population — and it can be achieved at little to no cost.

Be present while away. Military families are trained in how to minimize the impact of long hours and deployment, making it feel as though mom or dad is still present while away. On a long business trip, or spending late hours at the office to get that big project done? Make sure your children have easy access to reminders of you throughout your home. Put the toys you enjoy together out in full view in the living room; place photos of your recent family trip where the child can easily see them; make sure the music you love to sing along to together stays on the stereo. Be with them, even when you’re not.

Don’t talk — do. Any parent who’s come home from a long day at work and asked their child, “So, how was your day?” knows that children of any age don’t communicate like adults, and they don’t bond through talking. Whether you’re away for business or home at the end of a workday, the most effective way to communicate with your child is not through questions but activity — athletics, reading, music, or play. Forget the questions, and pick up a baseball glove or book as soon as you get home. While military-related nonprofits like United Through Reading help service members do just this, any professional in a demanding role can use the same techniques.

“Smart people learn from experience, and very smart people learn from other people’s experiences,” as the saying goes. By looking at what works in different sectors, regions, and industries, working-parent professionals and the companies that employ them can find practical, unexpected solutions.