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 31 sec ago

Why You Should Have (at Least) Two Careers

April 25, 2017 - 11:39am

It’s not uncommon to meet a lawyer who’d like to work in renewable energy, or an app developer who’d like to write a novel, or an editor who fantasizes about becoming a landscape designer. Maybe you also dream about switching to a career that’s drastically different from your current job. But in my experience, it’s rare for such people to actually make the leap. The costs of switching seem too high, and the possibility of success seems too remote.

But the answer isn’t to plug away in your current job, unfulfilled and slowly burning out. I think the answer is to do both. Two careers are better than one. And by committing to two careers, you will produce benefits for both.

In my case, I have four vocations: I’m a corporate strategist at a Fortune 500 company, US Navy Reserve officer, author of several books, and record producer. The two questions that people ask me most frequently are “How much do you sleep?” and “How do you find time to do it all?” (my answers: “plenty” and “I make the time”). Yet these “process” questions don’t get to the heart of my reasons and motivations. Instead, a more revealing query would be, “Why do you have multiple careers?” Quite simply, working many jobs makes me happier and leaves me more fulfilled. It also helps me perform better at each job. Here’s how.

Subsidize Your Skill Development

My corporate job paycheck subsidizes my record producing career. With no track record as a producer, nobody was going to pay me to produce his or her music, and it wasn’t money that motivated me to become a producer in the first place — it was my passion for jazz and classical music. Therefore, I volunteered so that I could gain experience in this new industry. My day job not only afforded me the capital to make albums, but it taught me the skills to succeed as a producer. A good producer should be someone who knows how to create a vision, recruit personnel, establish a timeline, raise money, and deliver products. After producing over a dozen albums and winning a few Grammys, record labels and musicians have started to reach out to see if they can hire me as a producer. I still refuse payment because making music, something that is everlasting, is reward enough for me.

At the same time, I typically invite my corporate clients to recording sessions. For someone who works at an office all day, it’s exciting to go “behind-the-scenes” and interact with singers, musicians, and other creative professionals. While I was in Cuba making an album, one of my clients observed about the dancing musicians, “I’ve never been around people who have so much fun at work.” That my clients have a phenomenal experience only helps me drive revenue at work, so my corporate and recording careers are mutually beneficial.

You and Your Team Series Career Transitions

Make Friends in Different Circles

When I worked on Wall Street, my professional circle was initially limited to other folks in the financial services sector: bankers, traders, analysts, economists. Taken together, all of us establish a “consensus” view on the markets. And most of my asset manager clients were looking for something different: “Give me a contrarian perspective.” In other words, they didn’t want to hear the groupthink. I took this as marching orders to tap my rolodex for people who could provide my clients a differentiated perspective.

Related Video The Gig Economy With new research, we can begin to see a shift from payroll employees to contractors.

See More Videos > See More Videos >

For example, one of my clients wanted to understand what Chinese citizens were saying to each other. Because I am an author, I have gotten to know other writers, so I reached out to my friend who was a journalist at a periodical that monitors chatter in China. Not restricted by the compliance department of a bank, he was able to give an unbridled perspective to my client, who was most appreciative. My client got a new idea. I got a trade. My friend got a new subscriber. By being in different circles, you can selectively introduce people who would typically never meet and unlock value for everyone.

Discover Real Innovations

When you work different jobs, you can identify where ideas interact — and more significantly, where they should interact. “It’s technology married with liberal arts, married with the humanities, that yields us the result that makes our heart sing,” said Steve Jobs, who was the embodiment of interdisciplinary thinking.

Because of Hurricane Katrina, many musicians left New Orleans. In order to generate funds to help musicians in the city, I could have created a typical nonprofit organization that solicits people for money. Instead, I helped create a more sustainable solution: a brokerage for musicians that I described as Wall Street meets Bourbon Street. People wanting to book a musician for a party in New York could find a band on my organization’s website, which would then ask the booker to add a “tip” which would be allocated to a New Orleans-based charity. The booker (who in some cases were my corporate clients) easily found a band for the party, the New York City-based musician got a gig, and the charity in New Orleans got a small donation. Because of my time working at a bank, I was able to create a different type of organization, one which has since merged with an even larger charitable organization.

When you follow your curiosities, you will bring passion to your new careers, which will leave you more fulfilled. And by doing more than one job, you may end up doing all of them better.

8 Ways Governments Can Improve Their Cybersecurity

April 25, 2017 - 11:00am

It’s hard to find a major cyberattack over the last five years where identity — generally a compromised password — did not provide the vector of attack.

Target, Sony Pictures, the Democratic National Committee (DNC) and the U.S. Office of Personnel Management (OPM) each were breached because they relied on passwords alone for authentication. We are in an era where there is no such thing as a “secure” password; even the most complex password is still a “shared secret” that the application and the user both need to know, and store on servers, for authentication. This makes passwords inherently vulnerable to a myriad of attack methods, including phishing, brute force attacks and malware.

Insight Center

The increasing use of phishing by cybercriminals to trick users into divulging their password credentials is the most alarming — a recent report from the Anti-Phishing Working Group (APWG) found that 2016 was the worst year in history for phishing scams, with the number of attacks increasing 65% over 2015. Phishing was behind the DNC hack, as well as a breach of government email accounts in Norway, and was the method that state-sponsored hackers recently used in an attempt to steal the passwords of prominent U.S. journalists. Phishing is on the rise for a simple reason: it is a relatively cheap and effective form of attack, and one that puts the security onus on the end-user. And, given that many users tend to reuse passwords, once these passwords are compromised, they can be used to break into other systems and bypass traditional network security measures.

In response to the increased frequency of such authentication-based cyberattacks, governments around the world are pursuing policies focused on driving the adoption of multi-factor authentication (MFA) solutions that can prevent password-based attacks and better protect critical data and systems. The U.S., UK, EU, Hong Kong, Taiwan, Estonia and Australia are among the countries that have focused on this issue over the last five years.

One challenge countries face: there are hundreds of MFA technologies vying for attention, but not all are created equal. Some have security vulnerabilities that leave them susceptible to phishing, such as one-time passwords (OTPs) — a password that is valid for only one login session or transaction — which, while more secure than single factor authentication, are themselves still shared secrets that can be compromised. Some solutions are unnecessarily difficult to use, or have been designed in a manner that creates new privacy concerns.

As policymakers work to address these authentication issues, they will need to adopt solutions that move away from the shared secret model while also being easy for consumers and employee to use. Per a new white paper that The Chertoff Group published, governments can best ensure the protection of critical assets in cyberspace by following eight key principles for authentication policy:

  1. Have a plan that explicitly addresses authentication. While a sound approach to authentication is just one element of a proper approach to cyber risk management, any cyber initiative that does not include a focus on strong authentication is woefully incomplete.
  1. Recognize the security limitations of shared secrets. Policymakers should understand the limitations of first-generation MFA technologies such as OTPs that rely on shared secrets and look to incent adoption of more secure alternatives, such as those that utilize public key cryptography where keys are always stored on — and never leave — the user’s device, like FIDO authentication standards.
  1. Ensure authentication solutions support mobile. As mobile transaction usage grows, any policy that is not geared toward optimizing use of MFA in the mobile environment will fail to adequately protect transactions conducted in that environment.
  1. Don’t prescribe any single technology or solution — focus on standards and outcomes. Authentication is in the midst of a wave of innovation, and new, better technologies will continue to emerge. For this reason, governments should focus on a principles-based approach to authentication policy that does not preclude the use of new technologies.
  1. Encourage widespread adoption by choosing authentication solutions that are easy to use. Poor usability frustrates users and prevents widespread adoption. Next-generation MFA solutions dramatically reduce this “user friction” while offering even greater security gains. Policymakers should look for incentives to encourage use of next-generation MFA that addresses both security and user experience.
  1. Understand that the old barriers to strong authentication no longer apply. One of the greatest obstacles to MFA adoption has been cost — previously, few organizations could afford to implement first-generation MFA technologies. Today, there are dozens of companies delivering next-generation authentication solutions that are stronger than passwords, simpler to use and less expensive to deploy and manage.
  1. Know that privacy matters. MFA solutions can vary greatly in their approach to privacy — some track users’ every move or create new databases of consumer information. Such solutions raise privacy concerns and create new, valuable caches of information that are subject to attack. Thankfully, today several authentication companies have adopted a “privacy by design” approach that keeps valuable biometrics on a user’s device and minimizes the amount of personal data stored on servers.
  1. Use biometrics appropriately. The near ubiquity of biometric sensors in mobile devices is creating new options for secure authentication, making it easier to use technology such as fingerprint and face recognition. However, biometrics are best used as just one layer of a multi-factor authentication solution — matching a biometric on a device to then unlock a second factor. Ideally, biometrics should be stored and matched only on a device, avoiding the need to address privacy and security risks associated with systems that store biometrics centrally. Any biometric data stored on a server is vulnerable to getting in the wrong hands if that server is compromised. This was the case in June 2015 with the United States Office of Personnel Management (OPM) breach resulting in 1.1 million compromised fingerprints.

Policymakers have resources and industry standards to help guide them as they address these principles. The Fast Identity Online (FIDO) Alliance has developed standards designed to take advantage of the advanced security hardware embedded in modern computing devices, including mobile phones. FIDO’s standards have been embraced by a wide cross-section of the technology community and are already incorporated into solutions from companies such as Microsoft, Google, PayPal, Bank of America, Facebook, Dropbox, and Samsung.

No technology or standard can eliminate the risk of a cyberattack, but the adoption of modern standards that incorporate MFA can be an important step that meaningfully reduces cyber risk. By following these eight principles, governments can create a policy foundation for MFA that not only enhances our collective cyber security, but also helps to ensure greater privacy and increased trust online.

The Business Case for Providing Health Insurance to Low-Income Employees

April 25, 2017 - 10:58am

After the failed negotiations over the repeal of Obamacare earlier in March, the Trump administration appears to be on the brink of proposing a new health care bill. While the details are still sketchy, it seems likely that the new bill will leave many lower-income Americans without access to health insurance.

I believe there is a case to be made that, should this take effect, the private sector has a strong incentive to step in. The provision of health insurance by organizations is a sensible business decision—especially for low-income individuals. In fact, a number of studies—including one that I co-authored—highlight that health insurance coverage can be beneficial to the bottom line of businesses, and should be endorsed by managers as good corporate strategy if they seek to increase their productivity.

Health insurance for low-income employees is good business for at least three reasons: it is linked with reduced levels of stress, more long-term decision-making, and increased cognitive ability, as well as (perhaps somewhat obviously) increased physical health — all of which are crucial components of higher organizational performance.

Health Insurance Can Reduce Stress

Among other positive outcomes, health insurance significantly decreases the level of stress employees experience, as a study described in a recent working paper shows. Johannes Haushofer of Princeton University and several colleagues worked with an organization in Nairobi, Kenya — the metalworkers of the Kamukunji Jua Kali Association (JKA) — and randomly allocated some employees to receive health insurance free of cost for one year. In other words, the researchers sponsored a health care plan for a proportion of JKAs’ employees, whereas others continued working for JKA as usual.

In addition to collecting data through surveys — for example on the employees’ self-reported health and well-being, and their household characteristics — the researchers did something rather unusual: they collected saliva samples from all respondents, which were later tested for the stress hormone cortisol. These measurements occurred at two time points, at the start of the study and at the end.

The researcher’s results were striking. Not only did employees who received free health insurance report feeling less stressed, but this decline correlated with a reduction in the cortisol measured in the saliva sample. The decrease in cortisol was comparable to roughly 60% of the difference between people who are depressed, and people who are not.

This is important for organizations because employees who experience higher levels of stress are more prone to burning out, and less likely to attain high levels of performance. Stressed employees hurt the bottom-line — and interventions that reduce stress benefit it.

Health Insurance Can Lead to More Long-Term Decision-Making

But health insurance can do more, too. A paper I co-authored with Elke Weber of Princeton University and Jaideep Prabhu of Cambridge University that was recently published in the Proceedings of the National Academy of Sciences focuses on one reason why low-income individuals have difficulties escaping their destitute situation. As research has found, we show that poor people are more likely to make decisions that favor the short term, even when these decisions involve smaller payoffs than larger payouts they might receive in the future.

In our study, we find that this is partially the case because low-income individuals experience more pressing financial needs than their richer counterparts. Because they are so pre-occupied with making ends meet, they are unable to even consider a possible larger payout in the future. This way, they remain captured in what Johannes Haushofer and Ernst Fehr of the University of Zurich so aptly call the “vicious cycle of poverty.”

However, we also find that interventions that serve to reduce levels of financial need that low-income individuals experience can make them more likely to make more long-term-oriented decisions. One such intervention may be the provision of health insurance. With a safety net they can draw on when health problems arise, poor people may be less likely to experience their financial needs as pressing — and as a result, make more long-term-oriented decisions.

This can lead to significant improvements for organizations as well. Companies require their employees to make many long-term decisions. In many cases, a more long-term orientation is necessary for companies to thrive.

Not Having Health Insurance Can Hinder Cognitive Ability

Finally, health insurance can give low-income individuals peace of mind. A seminal study led by Anandi Mani of the University of Warwick investigated the cognitive consequences of poverty. The researchers found — in concordance with an increasing body of evidence — that lack of money saps people’s attention. While they did not specifically study health insurance, it is easy to extrapolate their research to this question. Given that everyone’s attention is limited, the more people’s concerns weigh on their mind, the less attention they can pay to any one concern.

To illustrate this finding, imagine a case where a low-income employee uses her car to come to work every day. She lives paycheck to paycheck and depends on her steady stream of income. Every day, even when she isn’t driving, she worries about what she would do if her car broke down. Such thoughts circle in her mind incessantly — they are always there, no matter what else she tries to focus her attention on.

Obviously, such worrying thoughts have detrimental consequences for her performance. Constant ruminations make it more difficult to focus on tasks that matter in the moment. Now replace the car in the above scenario with her health; let’s assume she has a chronic condition that requires medical attention when it breaks out. This is not an uncommon case: over 34% of employees have chronic medical conditions, which are even more widespread amongst low-income individuals.

Although many of these physical ailments cannot be cured, their accompanying cognitive detriments can be. Thoughts such as, “How will I pay for the doctor? How can I afford my medication?” could be eradicated with the provision of health insurance. This is especially important for low-income individuals who are more likely to have such worries. And with an increased ability to focus on their work, employees are also more likely to be productive members of the organization. 

It is unclear what will happen in Washington D.C. in the next few months. Will Obamacare be repealed? Will millions of low-income individuals lose their health insurance? In the absence of a resolution, managers may have to step up. There is a business case to be made for providing employees with health insurance, which may make them less stressed, improve their long-term decisions, and lead to increased attention on the task at hand — and the case is especially strong for low-income employees.

We Need to Ask How We Can Make Economic Growth More Inclusive

April 25, 2017 - 8:05am

Some questions have what I like to call a catalytic quality. That is, they do for creative problem-solving what catalysts do in chemical processes: they dissolve barriers and accelerate progress down more productive pathways. Take the question that has lately been put on the political table because of the prosperity bind facing so many mature economies. Innovation abounds (especially in technology) and new value is being created hand over fist — yet the resulting wealth gains go to the few, while the many wind up financially worse off. Case in point, even if everyone benefits from the freer flow of information allowed by the internet, information alone can’t pay your heating bill or buy a new transmission for your car. As the costs of things like phone calls and televisions have dropped, the cost for basic necessities like food and housing has soared.

This vexing global challenge causes me to wonder, “What if the world’s innovators turned their sights on solving this problem? Could we make growth more inclusive?” That’s a huge question, and I hope it’s a catalytic one.

Many people are already trying to answer it. There’s Zeynep Ton’s path-breaking work on “why ‘good jobs’ are good for business.” There are people in the business community launching initiatives like I4J, a group that challenges the Silicon Valley tech community to “innovate for jobs.” Scholarly publications like the Journal of Management Studies put out calls for new research that could inspire enterprise-level change. Perhaps my favorite example is the MIT Inclusive Innovation Challenge. Now in its second year, it distributes cash prizes to inspiring organizations who “are using technology to reinvent work and create economic opportunity for people below the top rung of the economic ladder.”

A top prizewinner for 2016 was a company not too far from MIT geographically — but in an industry that seems 100 years distant. It’s an apparel manufacturer called 99Degrees Custom. In a wonderful bit of symbolism, it is located in the historic Everett Mill in Lawrence, Mass., which the company does not exaggerate in calling “the birthplace of the U.S. Industrial Revolution.” In the midst of a new, twenty-first-century technological revolution, no workers are being made redundant by machines. Instead, by using robotics, lean processes, and agile systems, 99Degrees Custom is allowing new jobs to be created using “sew free and wearable technologies, on-demand manufacturing, and fastest-turn development and production cycles.” Company founder Brenna Schneider told The Boston Globe: “You hear a lot of fear about machines replacing our jobs and excitement about robots… But I see there is an incredible sweet spot between the machine and human side.”

I’ve always been a believer in the principle of celebrating what you want to see more of. This prize competition does that. But there is something more that a well-constructed “challenge” gets right. Whether it’s Open IDEO’s ongoing challenges, or Elon Musk’s Hyperloop Challenge, or any of Peter Diamandis’s amazing, annual XPRIZE competitions (to name just a few), their power lies in posing a provocative question, and then flinging the doors wide to whoever can respond to it. The creative energy unleashed not only produces one winner — it engages a whole spectrum of people in a quest, and galvanizes the collective conviction that a solution must be found.

Peter Drucker, long before me, championed the power of questions as the critical fuel behind high-impact challenges. “The most serious mistakes are not being made as a result of wrong answers,” he once observed. “The true dangerous thing is asking the wrong question.” (And since the lion’s share of my work is with corporate clients, this one also resonates: “My greatest strength as a consultant is to be ignorant and ask a few questions.”) I think that if Drucker were alive today, he would see this question—how can we ensure that we not only have growth, but that growth is inclusive?—as the right one for our times. It’s the kind of question that anyone can engage with, and one that may well require everyone’s engagement to solve and at the core, inquisitive leadership is ultimately inclusive leadership. Wouldn’t it be fitting, if our society’s biggest question about inclusion could only be answered through inclusion?

This post is one in a series leading up to the 2017 Global Drucker Forum in Vienna, Austria — the theme of which is Growth and Inclusive Prosperity.

How a Macron Presidency Could Fuel More Nationalism in France

April 24, 2017 - 12:28pm

This weekend’s election in France has narrowed the field of 11 candidates to two: the most anti-EU candidate, nationalist Marine Le Pen, and the most pro-European candidate, centrist Emmanuel Macron. For the first time in the almost 60-year history of the Fifth Republic, neither the mainstream Left nor the mainstream Right will have a candidate in the second round of the presidential elections. Although Macron is the candidate who promises more continuity with the policies of the previous government than any other, he founded his own political movement only a year ago, and has never previously held an elected office. But although Macron is the strong favorite to win, a look at the broader context shows that his election may only be a temporary reprieve from the nationalistic, anti-EU sentiments that have been rising across Europe.

The runoff election was the most recent in a chain of events that will have transformed the political landscape of France. In just a few months, the country has peacefully thrown out almost all of the leading figures of its (former) political class. The incumbent president, François Hollande, was so irreparably unpopular that he was forced to not seek a second term. The primary elections for the candidate of the mainstream conservative party, the Republicans, eliminated the immediate past president, Nicolas Sarkozy, and a former prime minister, Alain Juppé, while those of the Socialist Party disposed of Hollande’s former prime minister, Manuel Valls. The first round of the presidential elections has now delivered the coup de grâce to the last survivor, Sarkozy’s former prime minister, the scandal-ridden François Fillon, who late last year looked as if he only had to stay on his feet to succeed Hollande as president.

All of this reveals the extent of the public’s rejection of the French political establishment. France has followed the precedent set in Austria’s presidential election last year. The old Left and Right political divide, based on social class, has at least temporarily been displaced by one between a nationalist, economically and culturally closed, and authoritarian France, for which Le Pen stands, and an internationalist, economically and culturally open, and liberal France, which the younger, former private banker Macron incarnates. On the one side is struggling, pessimistic, small-town, and semiurban France; on the other, the France that is “winning” and optimistic, especially well represented in the big, globally connected cities.

No candidate in the elections fought on such an unabashedly pro-European platform as Macron. His anticipated victory in the next round — polls suggest that he should secure no less than 60% of the second-round vote — should make it politically feasible for the EU to pursue more “pro-integrationist” strategies to combat the euro zone, refugee, and other current crises. Especially if the German elections in September go to the Social Democratic chancellor candidate, Martin Schulz, the Franco-German tandem that is indispensable for any effective crisis management in the EU could be reenergized. Even if the Germans elect Angela Merkel for a fourth term, the tandem may develop more momentum than in the last decade. (Owing to domestic financial and political constraints, neither Sarkozy nor Hollande could emulate the kind of role played by earlier French presidents, such as Valéry Giscard in the 1970s and François Mitterrand in the 1980s and early 1990s.)

But Macron can only play this role and establish an equal partnership with Germany if he turns around the economic and social fortunes of France. Since the global financial crisis, the economic disparities between France and Germany have widened. The most striking manifestation of France’s economic ills is the rate of unemployment, which, at almost 10%, is twice that of Germany, the UK, and the U.S., and which affects almost one-quarter of French 18- to 25-year-olds. Its public debt has also been rising faster than that of its neighbor across the Rhine.

Can Macron, if he is elected, address these problems and deliver the kind of change the French public seems hungry for? It’s unclear how much he wants to, despite his rhetoric. Macron was Hollande’s closest adviser for two years, and then his government’s minister for the economy for two more. In these functions, Macron held significant responsibility for the business-friendly U-turn in economic policy — before finally deciding to mount his own political movement and presidential bid out of alleged frustration at the obstacles he faced trying to reform the French economy more radically and rapidly. He now aspires to loosen business regulations and restrictions, but without curtailing employees’ rights or existing levels of collective social welfare provision. He intends to limit the government budget deficit, but at the same time increase public spending in some areas and reduce a range of taxes and social insurance charges on firms and their employees. He has said little about the €60 billon of government spending cuts that would be necessary to reconcile these conflicting objectives.

It is conceivable that, once in office, Macron will try to be a bolder market-oriented reformer than his background implies, fearing that otherwise his presidency may be destined to end in failure, like Hollande’s. However, his room for political maneuvering after parliamentary elections in June may prove very limited.

That’s because, as a practical matter, Macron will find it very difficult to form a stable government. Macron’s political movement, En Marche! (On the Move!), will field candidates in all parliamentary districts, but currently has no MPs. Macron has pledged that half of his candidates will be members of “civil society” with no previous political party parliamentary experience. It is highly unlikely that, starting from scratch, he will win a majority of parliamentary seats. Otherwise, to form a government backed by a parliamentary majority, which he will need if he is to avoid being a lame-duck president, he will have to win over MPs from the ranks of moderates from the Socialist Party on the left and/or moderates from the conservative Republican Party on the right. Such a majority is unlikely to prove very stable or robust, especially if, after the initial honeymoon period, the public is disappointed by the results of his economic policy, and the incentive for MPs to support him correspondingly diminishes.

Paradoxically, after a campaign in which, to mollify a profoundly unhappy electorate, virtually all candidates had to sound as if they were running against “the system” or “the establishment,” it looks as if France will choose, in Macron, the status quo candidate. If his presidency fails, it will likely mean even more disaffection with the status quo — and that, one after the other, the mainstream Left, Right, and Center will be judged by French citizens to have failed in office. That could mean that although Le Pen will almost certainly fail in her presidential bid this time, the prospects for her party may be even brighter in 2022.

A different version of this essay appeared in INSEAD Knowledge.

The 4 Types of Organizational Politics

April 24, 2017 - 12:00pm

The first 100 days are usually the honeymoon period for any new CEO to make their mark and get others on board. However, for Airbus CEO Christian Streiff, it was just a brief window before his abrupt departure from the European aircraft company that’s part of the EADS consortium, along with DiamlerChrysler and Aerospatiale-Matra.

Streiff’s drive to speed up decision-making, overcome bureaucracy, and deliver rapid execution, exposed historic and deep divisions between executives at the consortium. There were reports of internecine feuding at Airbus: The internal atmosphere was tense; jobs were allocated by preferences other than commercial criteria; and mistakes such as insufficient cabling were a result of internal conflicts and mistrust. Even Streiff ended up concluding that it was the political nature of Airbus that prevented it from becoming an integrated company. In short, he became the unintended victim trapped by what the Financial Times called “byzantine organizational politics.”

Dysfunctional politics can sink an organization, and yet most of the executives I teach react with distaste to the idea of being a savvy organizational politician. Yes, it can be self-serving. However, the reality is that politics is normal. According to McGill’s Henry Mintzberg, it’s just another influencing process along with norms, formal authority and expertise. Thus it’s important for leaders to understand the forms it can take and how to use it for the well-being of the organization.

Defining politics

While we would be naive if we didn’t acknowledge politics as a potentially destructive force, when deployed effectively it can help the company meet its strategic goals and live up to its values, especially during organizational change.

So what is it? Organizational politics refers to a variety of activities associated with the use of influence tactics to improve personal or organizational interests. Studies show that individuals with political skills tend to do better in gaining more personal power as well as managing stress and job demands, than their politically naive counterparts. They also have a greater impact on organizational outcomes.

However, political behavior is also likely to be present, but not explicit, until it is too late. For example, it may be the case that a manager needs to exert a large amount of pressure on a team to get something done by using the power of their position over others. It is also occasionally necessary for employees to work behind the scenes to build coalitions of believers in a new vision to convince others. Whatever the situation, it is important to understand that the root cause of political activities are often scarce resources (including time pressures), social and structural inequalities, and individual personal motivations.

Executives can view political moves as dirty and will try to distance themselves from those activities. However, what they find hard to acknowledge is that such activities can be for the welfare of the organization and its members. Thus, the first step to feeling comfortable with politics requires that executives are equipped with a reliable map of the political landscape and an understanding of the sources of political capital.

Mapping the political terrain

To address these challenges, we need to chart the political terrain, which includes four metaphoric domains: the weeds, the rocks, the high ground, and the woods. Each has different rules for skillful navigation.

Navigating these domains requires awareness of two important dimensions. First is the level that political activity takes place. Political dynamics start with the individual player and their political skills. These can evolve into group-level behaviors. At the other end of this dimension is the broader context, where politics operates at the organizational level.

The second dimension of the political landscape is the extent to which the source of power is soft (informal) or hard (formal). Soft power is implicit, making use of influence, relationships, and norms. Political activity based on “hard,” formal, or explicit power draws upon role authority, expertise, directives, and reward/control mechanisms.

These two dimensions of power can provide us with the tools to navigate the four metaphoric domains.

 

The Weeds

In this quadrant, personal influence and informal networks rule. I call it “the weeds” because it’s a dynamic that grows naturally, without any maintenance. It can be a good thing. For example, at one not-for-profit organization, the Secretary General was seriously underperforming, and sometimes acting unethically, leading staff to worry that they’d lose the support of key donors and government officials. As a result, an informal group regularly met to cover up his mishandling of situations. However, the problem became unsustainable and the same group, within the year, helped to ease him out to protect the organization’s reputation.  Thus, the development of an informal coalition saved the organization and political activities, in this case, were a force for good.

But “the weeds,” if left unchecked, can also form a dense mat through which nothing else can grow. In these circumstances, informal networks can be a countervailing force to legitimate power and the long-term interests of the organization. For instance, they can thwart legitimate change efforts that are needed to put the organization on a sounder long-term financial footing.

To deal with the weeds, get involved enough to understand the informal networks at play. Identify the key brokers, as well as the gaps — if you can fill the gaps — or ally with the brokers, so that you can increase your own influence. Conversely, if the brokers are doing more harm than good, you can try to isolate them by developing a counter-narrative and strengthening connections with other networks.

The Rocks

Power in “the rocks” rests on individual interactions and formal (or “hard”) sources of authority such as title, role, expertise, or access to resources. It might also include political capital that arises from membership of or strong ties to a high status group such as the finance committee, a special task force, or the senior management team. I call this the “the rocks” because rocks can symbolize a stabilizing foundation that keeps an organization steady in times of crisis. But conversely, the sharp edges of hard power can wreck a plan.

Consider a mid-sized advertising agency that was implementing a new growth strategy. The Chairman used his formal power to stop the changes. He would constantly question decisions agreed with the management team, change his mind from one meeting to the next, stop agreed allocation of resources to new structures, and take people off the special task forces, without notification. Here we see the formal use of hard power to satisfy self-interest over the firm’s longer-term value.

Navigating the terrain here relies on drawing on formal sources of power, rather than fighting against them. Your best bet is to redirect the energy of a dysfunctional leader, either through reasoned argument or by appealing to their interests. For example, in the case of the advertising company, senior executives used the argument of “leaving a legacy” to get the Chairman to see how he was undermining his own and company’s long term interests.  In fact, it was this sort of political behavior and misuse of power that inspired Max Weber, a sociologist an early organizational scholar, to write the classic book Bureaucracy, where he argued that bureaucracy was the most rational and best way to organize and co-ordinate modern corporations.  This leads us to take the high ground.

The High Ground

The high ground combines formal authority with organizational systems; I use the term to describe the rules, structures, policy guidelines, and procedures that form the basis of political activities.  The benefits of these rules and procedures are they provide a check against the whims of individual level, charismatic or autocratic individuals. Thus, the ‘high ground’ provides guide rails for the rocks. It’s a functional political. process that uses structures of control systems, incentives, and sanctions that keep the organization in compliance.  However, as many executive know, rules and procedures can also lead to the company becoming overly bureaucratic, where rules are used as a political device to challenge interests not aligned with the bureaucrats, or to prevent innovation and change.

If you find yourself stranded on the high ground, take a lesson from one company that used feedback from clients, customers, and end-users to highlight difficulties and make the case that the current structure was constraining the organization. Since organizations where the high ground is a problem tend to be risk-averse, you can also try emphasizing that not changing can be even riskier than trying something new.

You can also argue that a separate group or task force needs to be set up to examine an issue or bridge silos. It creates a working space outside of the mainstream structures, norms, and habitual routines of the organization, providing an alternate source of power. Such groups can also revitalize innovation and change.

For instance, a public agency was having problems collecting revenues because the structures were slow and had to follow formalized steps to stop potential fraud. It meant that millions of tax revenues were not collected at the end of the year. Senior leaders decided to set up a dedicated task force outside of the formal organizational structure to solve the problem. After the first year, they had reduced the problem by over 50% and reached an 95% recovery rate by the second year. The organization then changed its official processes to match these improved methods.  Other well-known examples of similar methods include the changes at Nissan, pilot projects at Asda, and companies opening up Innovation Labs in Palo Alto to remove the barriers of bureaucracy.

The Woods

In addition to their formal processes and guidelines, organizations also have implicit norms, hidden assumptions, and unspoken routines — and that’s where we get into “the woods.” The woods can provide cover and safety for people in your organization; or they can be a bewildering place where good ideas and necessary changes get lost.  Thus, here it is important to understand the woods from the trees as you can miss the former if you focus on the symptoms rather than the hidden barriers to strategy execution.

Strong implicit norms can define what is even discussable. In some organizations, for example, displays of emotion may be seen as socially undesirable, and so the organization finds ways to marginalize, ignore, or reframe any emotions that are shown. In other organizations, the display of certain emotions are essentially mandatory — think of the smiling flight attendant.

Some organizations get lost in their woods. They focus on the presenting issue rather than the unspoken ecosystem of habits and practices that remain unseen. The challenge here is to make the implicit explicit.  Ask the stupid question, bringing implicit organizational routines and behaviors to the surface. Ask clients, recent hires, or temporary contractors about their observations and experience of how the company works; a fresh pair eyes will often identify things that incumbents are blind to seeing. Get benchmark information from surveys and specialist experts. Once the implicit assumptions are out in the open, ask your team to reflect on whether they’re helping your company or hindering it.

For example, consulting to a newly merged, international telecoms company, we conducted a simple exercise using the culture web framework to help each of the newly merged entities to describe their own cultural norms and those of the other parties.  It quickly generated truths and myths that could be discussed and used to iron out blockages in them rolling out their distribution and cable network — the key to capturing subscribers and business operational success.

Understanding the political terrain can help executives fight dysfunctional politics. But it’s also important to recognize that each landscape also contains positive dynamics. In either case, try to understand the drivers rather than just judge the behaviors. Project leaders who do can avoid the hidden traps of political dynamics, defend themselves against the dark side of politics, and use what they know to support wider organizational goals will find it easier and get more skilled engaging in positive political behaviors at all levels of the organization.

There Will Always Be Limits to How Creative a Computer Can Be

April 24, 2017 - 11:00am

Jennifer Maravillas for HBR

Artificial intelligence is disturbing the workforce, and will continue to do so as its capabilities increase. Inevitably, “artificial intelligence will soon be able to do the administrative tasks that consume much of managers’ time faster, better, and at a lower cost.” But, when it comes to more complex and creative tasks such as innovation, the question still remains whether AI can do the job better than humans.

There’s no doubt that recent advancements in AI have been extraordinary. Watson, for example, is now helping with cancer research and tax returns, among other things. And AlphaGo, a computer program designed to play the ancient board game Go, beat Lee Sedol, one of best players in the world, in a 4-1 landslide. Since Go is far more complex game than chess, AlphaGo’s victory was a major breakthrough. But it didn’t stop there. After its March 2016 victory, the Google-owned program racked up over sixty wins against online opponents, a streak which sent the world’s top players into a tailspin. “Humans have evolved in games in thousands of years—but computers now tell us humans are all wrong,” said Chen Yaoye, a Go expert from China. “I think no one is even close to know the basics of Go.”

Insight Center
  • The Age of AI Sponsored by Accenture How it will impact business, industry, and society.

Despite these advancements, computers still have limitations. For example, even though AlphaGo leaned on deep learning to make moves that increased its chances of winning, its programmers didn’t know why the system made certain moves. They could peer in to see such things as the values at the many digital “neurons” of a many-layered network, but much of the information was distributed across large swaths of the neural network and was not available to be summarized in a reasoned argument as to why a particular move was chosen.

Until summarizing is possible, managers and CEOs who are experts in their various fields won’t trust a computer — or another human — that cannot offer a reason for why a creative yet risky move is the best one to make. Will Knight explores the many facets of this current limitation in his provocative article “The Dark Secret at the Heart of AI.”

To add to that, my colleague Lee Spector and I have developed a mathematical proof that shows the limits to how creative a computer can be. Published in the journal Artificial Intelligence for Engineering Design, Analysis, and Manufacturing (AIEDAM), we found that the fastest modern supercomputer couldn’t list or explore all the features of an object/thing even if it had started working on the problem way back in the 1950s. When considering the Obscure Features Hypothesis for Innovation, which states that every innovative solution is built upon at least one new or commonly overlooked feature of a problem, you can see how AI may never advance enough to take the jobs of Chief Innovation Officers.

Related Video Can You Entrust That Decision to a Robot? Find your place on the automation frontier. See More Videos > See More Videos >

Further, computers cannot always fill in the gaps in our lack of understanding for how things work. Phone case makers dropped many encased smartphones on hard surfaces before selling their products. They did not just rely on computer simulations of dropped phones in cases. Our theories will always need actual empirical measurements to fill in the gaps in our understanding.

Given these limitations, my co-author and I have proposed a solution: a new human-computer interface (HCI) that allows humans and computers to work together to counter each other’s weaknesses. Computers, for example, could prevent humans from falling prey to cognitive biases such as functional fixedness, design fixation, goal fixedness, assumption blindness, and analogy blindness. And humans could make up the creative deficiencies of computers. In order for this to work, the interface needs to be both human- and computer-friendly.

We shouldn’t concern ourselves, therefore, about whether computers will overtake humans; instead, we should focus on designing a system that allows humans and computers to easily collaborate together so each partner can build upon the other’s strengths and counter the other’s weaknesses. Along the way, humans will rise to the challenge of working with a strong machine partner. In some ways, this is already happening. After losing the first three games to AlphaGo, and witnessing the computer system make novel moves that players hadn’t seen before, Lee Sedol made a highly creative move of his own and ended up winning the game.

One can see more of this in the future. As we develop systems and they evolve, humans and computers will continue to challenge each other, and, as a result, both will become more innovative in the process. Further, designing the proper interface for human and computers to collaborate on the same problem will unleash a level of innovativeness that neither partner can achieve on their own.

How Stay-at-Home Parents Can Transition Back to Work

April 24, 2017 - 10:00am

The vast majority of people who take time off to raise children (or other caregiving work) would ultimately like to return to the workplace. But transitioning back isn’t so easy. Research by the Center for Talent Innovation shows that only 73% of highly qualified women who wanted to return to work were able to do so, and just 40% of those landed a regular full-time job. What’s the problem, and how can you overcome it?

One of the biggest challenges professionals face in the midst of a career transition is managing their brand and how they’re perceived. For legal reasons, hiring managers can’t openly say what may be on their minds: that you might be a less committed or effective worker now that you’re a parent and have a “gap in your resume.”

Unfortunately, when a bias is unspoken, it’s much harder to address outright. That’s why it’s on you to proactively address their concerns and show them why they’re unfounded. Here’s how to do it.

First, it’s important to show that your skills are current. Depending how long you were out of the workforce, potential employers might worry that you’re out of touch. You may have had stellar experience in marketing, for instance, but if you left your job in 2006, you’ve missed the entirety of the social media era, and an employer might be justified in wondering if you’ve kept up. Go out of your way to prove them wrong.

Make sure you have a robust LinkedIn profile and consider using other public social media platforms, such as Twitter, to share posts regularly about your industry to show that you’ve kept pace with industry trends. In your cover letter and interviews, be sure to cite any germane volunteer experience. If you helped organize major fundraisers for your child’s school or led a search committee for your favorite charity’s new executive director, those skills are eminently transferable.

That was the strategy Naomi Press followed. A former banker who took 20 years out of the workforce, Press stayed very active in her children’s school. “In truth, running the Parents’ Association was a lot like having a full-time job (without the paycheck),” she says, “so I could talk about my responsibilities in that position and the valuable skills I honed — project management, people management, writing, editing, marketing, etc.” She leveraged those skills — which melded education and business savvy — into a new job as the assistant director of a university program.

You and Your Team Series Career Transitions

Second, keep your network current. Volunteer experience is great, but it may not be enough. “If I was going to land a job,” Press surmised, “it would likely be through networking. I didn’t think my volunteer experience would necessarily convince a random hiring manager that I deserved to get an interview.”

Nancy Park, who recently returned to work at her old company after a five-year break to raise her children, also credits networking with her successful transition. During her time out of the workforce, she stayed in the loop by meeting with her former colleagues every few months, and ultimately heard about an opening — which became her new job — from them.

Third, explain why you’ve chosen this moment to return to the workforce. The hiring manager may have two unspoken concerns:

  • Does she really want to be here?
  • Does he have childcare figured out, or will he get called away all the time if his kid is sick?

You need to allay the manager’s concerns proactively and explain why you’re applying for this job at this moment. In truth, the need to earn more money might be a factor. But don’t go there, because they’ll wonder if you’ll bolt at the first sign of a higher paycheck from another firm. Instead, stress that you’re eager to return to the workforce so you can make a contribution (and how, specifically, you’d like to do so at their company), and that you’re now in a position to re-enter because your caregiving responsibilities have lightened (perhaps your kids have started school, or you’ve hired a nanny, or they’re older now and need less supervision). That information shows you’ll be a motivated employee and won’t be more distracted by personal obligations than anyone else.

Fourth, reposition your “weakness” as a strength. It’s easy to imagine that your time off work is a weakness; after all, others have been amassing new professional skills and getting promoted while you were on another track entirely. Indeed, hiring managers may well view it that way. But you can’t simply accept that frame and apologize for your choices (“I know I don’t have as much recent experience as the other candidates, but…”).

Indeed, as Park notes, returning to work after time off may be challenging, but so is any kind of change, whether it’s switching firms or moving to a new role. “Don’t overestimate the impact of being out for some period,” she says. “If you were a high performer before and have strong skills and renewed drive to work hard, you can absolutely still add value to a company.”

Plus, parenting has almost certainly taught you important lessons about multitasking, negotiation, persuasion, and stress management — and that may, in fact, make you a more productive and well-rounded employee. Research by the Federal Reserve Bank of St. Louis indicates that while working mothers do experience a productivity dip when their children are small, they actually outpace the productivity of childless women over the course of their careers — likely because they’ve learned how to rigorously maximize their efficiency. Own those skills, and position them as an asset, rather than a weakness — because they are.

Fifth and finally, don’t get discouraged. Even if you’ve been following the steps above, success doesn’t come instantly. Park recalls that it took about a year between deciding to re-enter the workforce and finding the right position, and describes the process as “moderately difficult.” But with time and patience, she landed an exciting opportunity. In the interim, you might consider taking on low-paid (or unpaid) assignments, if you’re confident they’ll lead to new skills or an enhanced network. In my book Reinventing You, I profile Susan Leeds, whose interest in environmental issues prompted her to sign on for a two-year nonprofit fellowship (and a huge pay cut). But the experience and connections ultimately led to a fruitful new career running a public-private environmental partnership.

It’s unfair — but common — for talented professionals to be penalized for taking time off to do caregiving. If you want to return to the workforce, you have to manage and overcome the unspoken assumptions about who you are and what you’re capable of. By making it clear that your skills are current, networking assiduously, showing that you’re motivated, and demonstrating that your caregiving experience is actually a strength, you can go a long way in combatting pernicious stereotypes and re-entering professional life on your own terms.

The World Needs a DARPA-Style Project to Prevent Pandemics

April 24, 2017 - 9:00am

When the Blizzard of ’78 hit the Northeast, it caught the region by surprise. Some meteorologists had predicted only a minor snowstorm, and forecasts were still unreliable enough that many people simply went about their regular business. When the hurricane-force storm hit, traffic came to a complete standstill due to the fast-accumulating snow – even the plows were stuck — and thousands of cars were abandoned. Not all the stranded people would survive. It took over a week – and help from the National Guard – to clear the roads again.

Today, even as weather events have become more extreme due to climate change, we’re in many ways more prepared for them: scientists’ forecasting techniques have gotten better, and governors and mayors have standard practices for handling preparation and cleanup for all but the most severe events (think Hurricane Katrina or Superstorm Sandy). The private sector has also played an important role: today if there’s a blizzard, tornado, or flash flood in your area, your smartphone will notify you so that you can shelter in place until the risk has passed.

While advances in tracking weather-related risks have improved public safety and resilience, we have made far less progress on enhancing global resilience to biological risks and pandemic threats. As the bipartisan Blue Ribbon Study Panel on Biodefense highlighted, U.S. levels of readiness and global coordination are woefully inadequate. And the U.S. is not alone in this; it’s is a global problem.

Over the last few decades, the world has had several near-misses on a true global pandemic, from the Ebola outbreak in West Africa to various strains of avian influenza to, most recently, the rapid spread of Zika. We’re also facing a new and perilous generation of drug-resistant pathogens. What these near misses tell us, quite simply, is that we are not ready for a global pandemic. Fixing this should be one of the top public health priorities today for leaders in science, government, and private industry.

In public health, it is much easier to play offense than it is to play defense. Playing offense well, however, is going to require a lot more coordination – both internationally and within national borders. We believe an important first step in this effort is for the U.S. and governments around the world to develop an equivalent to the Defense Advanced Research Projects Agency (DARPA), that focuses cross-sector efforts on advancing biological and pandemic risk readiness.

Why should the public sector lead the way? Because the long-term horizon and trade-offs required to develop scalable responses to pandemic threats are exactly the type of problem too big to be solved by any one sector. Government can play a unique role in catalyzing the kind of cross-sector collaboration needed. Here’s what the public sector, private sector, and research/science communities could do to work better together:

Government 

The U.S. federal government has allocated $6 billion to research efforts on these threats. That may sound like a lot, but it pales in comparison to the amount spent on cyber security, airport screening, or border security. It’s not enough. And it’s not as effective as it could be, because the money is allocated in a disaggregated manner. In addition to homing in on targeted research and development efforts, governments have a unique obligation to work with the international community, such as the World Health Organization, to ensure a common response framework is in place, particularly in fragile states, whose health systems are underdeveloped. Our strength lies in global collaboration, widespread early warning systems that do not sow panic and deep cross-sector collaboration. With this we can begin to put unseen threats into focus so the U.S. and the global community can manage them.

Private sector

Resilience to biological and pandemic threats is not singularly a matter for public health officials, governments, and the military. After all, militarizing the Ebola response was among the costliest of interventions we have had and, arguably, will complicate future health interventions. It should be our last line of defense, not our first.

Biodefense and pandemic risk mitigation are also a matter for deep private sector involvement. As Bill Gates warned at the Munich Security Conference, millions of lives are at risk and the economic consequences pale in comparison to other global threats. Zika has cost the economies of Latin America and the Caribbean an estimated $18 billion; the last Ebola outbreak cost more than 11,000 human lives and more than $32 billion in economic ripple effects.

The private sector must also break the cycle, particularly in the pharmaceutical industry, of only prioritizing blockbuster drugs and other commercially viable investments. In the long run, the proposition of global market collapse due to biological and pandemic risks cannot be offset by the potential rewards of the next big lifestyle drug. Resilience to societal threats must become a collective societal priority, even if the economics seem intangible. Those with the resources, financial and otherwise, have a special obligation to focus on the many grave challenges posed by an increasingly complex and interconnected threat landscape.

In short, we must adopt a global “invest now or pay later” economic philosophy. Amid this uncertainty, there are great rewards to be reaped by innovators and entrepreneurs who recognize the challenges of robust bio and pandemic defense as a unique market opportunity.

Science/technology community

As with DARPA, the science and technology community are the unsung heroes in improving global biodefense and pandemic risk readiness. But unlike advanced military research, which is conducted under strict secrecy, the scientists working on improving our defenses to emerging threats must have a charter that encourages open collaboration and transparency. All too often research and technology investments, particularly those in the private sector, follow a zero-sum approach. Coordinating grant efforts and capitalizing these initiatives should be as much about scientific and technological breakthroughs, as they should be about enhancing global public awareness to simple preventive measures like washing hands.

We realize that there is no shortage of major problems facing the world, from climate change to armed conflict. But pandemics, with their unique combination of speed and deadliness, deserve far more attention than they’re currently getting. They need to be a top priority. We also understand that calling for more collaboration, particularly more international collaboration, during a time of rising populist and nationalist sentiments may seem quixotic. However, pandemics do not recognize national borders. Rather than deglobalization, trade barriers, and isolationism, we need global collaboration, coordination, and investment. Allowing these risks to fester, as too many governments did in the early days of the Ebola crisis, will only reveal how interconnected and vulnerable the world really is.  In a globally connected economy, you cannot decouple the fortunes of companies from countries, or countries from one another.

The next pandemic is going to be a lot harder to predict – and a lot deadlier — than the next superstorm. Let’s not allow it to catch us flat-footed.

Prestigious Firms Make Riskier Acquisitions Than Other Firms

April 24, 2017 - 8:05am

High-reputation firms are recognized for consistently meeting and even exceeding stakeholders’ expectations. Prior research suggests that compared to other firms, this elite subset of firms attract more and better job applicants, command higher prices for products and services, and sustain higher financial performance. However, recent research has also found that high-reputation firms face greater pressure to achieve rapid growth.

Consider the example of Microsoft, a perennial high-reputation firm. Microsoft has dominant businesses in Windows and Office, tremendous profitability, and is a magnet for talented employees. Toward the end of the 1990s, it seemed as if nothing could outrun Microsoft, except for, as it turned out, high stakeholder expectations. In the years to come, even after seemingly strong performance, commentators would breathlessly describe Microsoft as having a lost decade, despite tripling sales and increasing profit from $9 billion to $22 billion. At the same time, Microsoft made numerous acquisitions into a variety of new businesses, with varying degrees of success. For example, Microsoft purchased both Nokia and Skype, but it has not been able to turn these multi-billion dollar purchases into sure-fire winners.

Accordingly, we wondered whether growth pressures on high-reputation firms, as well as their desire to maintain their reputations, influenced their acquisition behaviors. Acquisitions are an aggressive way to meet investors’ expectations to grow quickly and branch out into new areas. Yet they involve significant risks in selection, pricing, and integration, and markets often respond negatively to their announcements. We examined this issue and published our findings in a recent paper in the Strategic Management Journal.

Following past research, we obtained data on a firm’s reputation using Fortune’s most admired companies ranking. In the period between 1991 and 2008, our sample yielded 75 firms classified as “most admired” (which we refer to as “high reputation”) at least once. To create a baseline for comparison, we used a technique called “propensity score matching” to generate a series of matches between each of Fortune’s most admired firms and a set of similar firms drawn from the Fortune 500.

We tested whether a firm’s high reputation influenced its acquisition activity in the form of (a) acquisition number, (b) acquisition size, and (c) acquisition relatedness — i.e., the degree to which the target firm operates in the same or a similar industry as the acquiring firm. We also tested the influence of a high reputation on investor reactions to these firms’ acquisitions. Specifically, we measured investor reactions as the change in a firm’s stock price (above and beyond any change from the movement of the overall market). To ensure that we isolated the specific influence of high reputation on acquisition behaviors, we controlled for a variety of deal-level, acquirer-level, and managerial variables.

We theorized that the pressure to maintain high reputation would drive a higher rate of acquisitions, and indeed we found that high-reputation firms made approximately twice as many acquisitions in an average year than other comparable firms. We also found that, relative to their current portfolio of businesses, high-reputation firms made more unrelated acquisitions than other firms. Perhaps surprisingly, investors responded more negatively to the acquisition announcements of high-reputation firms than to other firms. Our model suggests that an average-sized high-reputation firm in our sample, with a $50 billion market capitalization, would encounter a $300 million acquisition penalty in decreased market capitalization after an acquisition announcement that a comparable, non-high-reputation firm would not.

Our evidence indicates that high-reputation firms are active acquirers on average. However, we were surprised at the extent to which they acquire a wide variety of targets. We initially thought that high-reputation firms would make larger acquisitions, but the data showed their deals ranged from small (e.g., below $100 million) to large (e.g., billions). High-reputation firms also made acquisitions of companies that were less related to their current businesses, which suggests an aggressive approach to growth by entering new markets, even markets with which they are not familiar.

We also found that investors often react negatively to acquisition announcements by high-reputation firms, which suggests that investors don’t consider acquisitions to be an appropriate vehicle for growth. For instance, they may view acquisitions as signals of high-reputation firms’ limited growth opportunities in their primary businesses.

Interestingly, we found that a high reputation is “sticky” — meaning that many firms remained on Fortune’s most admired list for multiple years, some for over a decade. At some level, it appears that markets hold high expectations for these firms to grow. If they opt to grow through acquisitions rather than internally, however, they are punished with a lower stock price. But even though investors react negatively to high-reputation firms’ acquisition announcements, this does not necessarily undercut a firm’s high reputation over the longer term; firms often remain on Fortune’s most admired list even after unsuccessful acquisitions. It may be that these negative reactions reflect an enhanced market pressure on high-reputation firms to deliver greater short-term results.

Returning to our Microsoft example, we see an active acquirer making deals at different sizes and in a variety of areas (e.g., maps, music, gaming, enterprise software, communications, and hardware). Markets took a negative view of these announcements most of the time (74% of Microsoft’s announcements in our sample). At the same time, Microsoft also invested internally, including in their now successful cloud business. Over time, Microsoft continues to post strong financial results and remains on the most admired list year after year, despite the many negative reactions to its acquisitions. It may be that top firms, like Microsoft, are able to navigate high expectation pressures by creating a mix of internal and external growth.

In the third act of Shakespeare’s Henry IV, Part II, King Henry reflects on the burden of being the King of England and the expectations people have placed on him. Similarly, our results suggest that managers at high-reputation firms are burdened with a responsibility to maintain their firms’ high standing among investors. Faced with limited options for growth, these leaders engage in riskier strategies to maintain growth, and markets often respond negatively. It appears that “uneasy lies the head that wears a crown” for managers attempting to keep their firms’ high reputations intact. However, much like monarchs, high-reputation firms still tend to stay on the throne for a long time.

How France’s Brand of Populism Differs from What Drove Brexit and Trump

April 21, 2017 - 1:29pm

On Sunday, April 23, French voters will go to the polls to choose from 11 candidates in the first round of an extraordinary presidential election. The candidates from the two chief political parties have been trailing political newcomers and fringe party candidates. The top two vote-getters are expected to face each other in a runoff election on May 7.

For insight into this unusual race and to what extent it reflects a larger shift toward economic and political populism, I spoke with Vincent Pons, an assistant professor at Harvard Business School. He cofounded a startup involved in electoral campaigns in France, and he’s completing a case study about the rise of populism in France. Our conversation has been edited for length and clarity.

HBR: It appears probable that each of the two political parties that have governed France for decades won’t advance their candidates to the runoff election. How surprised are you?

Pons: Very. It’s a very new situation. The candidate of the incumbent Socialist Party, Benoit Hamon, has a very, very low vote share in the polls, less than 10%. Overall, there’s a major reaction against traditional politicians and parties that have held power in the past. This profits, of course, the National Front party and its candidate, Marine Le Pen, but also Emmanuel Macron, who is a very new face in French politics.

Do you consider Macron a populist candidate?

I don’t. He has taken some populist stances, but at one point or another all the candidates in this election have criticized what they call “the system.” This is clearly a populist argument, this idea that there’s a political elite that is serving its own interests and hurting the people.

Another ingredient of populism is pitting people against a foreign threat, for instance, immigrants or rich American companies. Le Pen is pushing against immigrants, against Europe, against globalization. But not Macron. He has been advocating for globalization, for Europe, for an open society.

After populist victories in the British Brexit vote and the U.S. presidential election, do you think Le Pen will win?

If you look at the polls, she doesn’t have any chance to win in the second round [the runoff election]. But she may win in the future. She’s very young. She’s 48. Unless the situation improves in France, as time passes, her arguments could become stronger and stronger.

To what extent is populism in France paralleling the populism in Great Britain or in the United States?

It looks like all these things are happening at the same time in totally different countries, so there must be some common causes. But at the same time, all these countries have very different political systems, electoral systems, and economic situations. The narrative in the U.S. is that globalization is creating winners and losers, and that the losers have to bring someone to power who will defend their interests better. There are some issues with that narrative in France. The French social welfare system is much more generous than in the U.S., which means that whoever loses their job, for instance, gets a lot of protection.

How are economics driving the rise of populism in France?

The segments of the population in which Le Pen is very strong today are in regions in east and northeast France that have been hit by deindustrialization. In other countries, it’s older voters who are very reactionary. In France, it’s the young voters who vote massively for Le Pen, voters under the age of 25. They face a 25% unemployment rate. The overall unemployment rate is 10%.

She’s also very strong among midlevel employees and blue-collar workers, who previously tended to vote on the left. When you’ve had around 10% unemployment since 2007, at some point people lose trust in politics. So people who are unemployed or people who fear for their job or the job of their kids turn to the National Front in search of protection.

That’s new for the party. Le Pen’s father [party founder Jean-Marie] tended to be very far right not only on cultural issues — he was even far right economically, very neoliberal. And for that reason he was in favor of Europe and the European Common Market. His daughter is very different. The version of populism that is offered by [Marine] Le Pen, the combination of left-wing and of right-wing ideas, is quite interesting and novel and is contributing to her appeal. For instance, she is advocating for lowering the retirement age, for increased protection by the state of the French poor. She advocates targeting social benefits and state health to French citizens, and taking away benefits and state money from immigrants who don’t have citizenship.

What are the other key economic issues of the presidential campaign?

Another important economic question is what to do with the French national debt. Some candidates, like Jean-Luc Mélenchon, propose a major fiscal stimulus to improve the sluggish economy, but at the cost of further increasing the debt. Other candidates, such as Macron and François Fillon, favor fiscal discipline and cutting public expenditures, because the cost of servicing the debt is a large share of the budget.

Another major economic issue is whether to stay in the euro zone or leave the euro [currency]. The candidates in the center or traditional moderate left and right all are in favor of staying in the European Union and the euro zone, whereas Le Pen has announced the first thing she would do is hold a referendum on exiting the euro. Mélenchon has said that he would try to renegotiate a number of European treaties with Germany, to get a better deal for France, and that if the negotiation failed he would consider leaving the euro.

To what extent are globalization and international trade issues in the race, as they were in the Brexit and the U.S. presidential votes? 

It’s similar, but globalization can be a bit vague. The National Front has equated globalization with Europe. It’s presented as the loss of control over French borders, over who enters France, and so it’s a critique of the influx of refugees in the sense that they take the jobs and the social benefits away from the French.

It’s also presented as unfair competition from other countries. Namely, they don’t pay the same wages. They don’t have the same protection of their workers, and so it’s easier for them to sell at a lower price. These are a major aspect of the discourse of the National Front, and also to some extent of the far-left Mélenchon.

What’s the biggest misconception about the French presidential election you’ve been seeing in international media coverage?

There’s the tendency to equate what happened in the UK and the U.S. with Le Pen’s possible victory. The populism of Le Pen has, of course, commonalities, but these are specific. One innovation of the National Front is the combination of these far-right cultural stances with leftist platforms. It’s very different from the U.S., where the Tea Party would fight against more government intervention.

Another difference is that, unlike in the U.S., where Trump was a candidate of one of the two major parties, Le Pen remains a candidate of a marginal party that has never really been in power. At the end of the day, many voters voted for Trump simply because they were Republican voters, and he was the Republican candidate.

This is serving Le Pen to the extent that voters dislike the traditional parties, but it’s also disserving her in the sense that some people are skeptical that she would be able to run the country.

In Europe, there have been two recent votes, in Austria and the Netherlands, where voters have rejected populist candidates.

Who wins the election is one thing. Another thing is the vote share. And in Austria and the Netherlands, there is no question that populist parties have made a lot of progress, and this is not stopping for now.

Is this unusual roster of politicians a sign that something else is at stake?

France and other countries may be at the verge of a major political recomposition. The two candidates that have dominated the polls for the entire campaign are Marine Le Pen and this centrist candidate, Emmanuel Macron. This fact perhaps announces a new order, which is no longer organized along the divide between left-wing and right-wing parties, but rather along a divide between forces in favor of a society open to immigration, globalization, and Europe on the one hand, and forces in favor of a society that closes its borders to these different influences on the other hand.

The reason that populism and the far right have risen in France has a lot to do with the convergence between the political platforms of the moderate right and the moderate left. When the Socialist Party’s François Mitterrand was elected in 1981, the left came to power for the first time in decades. The right was struck with panic. The French franc fell, and the stock market was in free-fall. There were stories of the bourgeois leaving Paris with their cars filled with gold to make sure that their money would not be confiscated by the state. People feared that this new candidate would implement radically new policies.

Now there’s a sense that the policies and the platforms of the left and the right have very much converged. They’re very much the same. One example is the agreement of the moderate left and right in favor of Europe, when many French voters feel the European Union is responsible for their economic difficulties. This creates a boulevard for new forces like the far right that say, look, we have the young alternative and a different vision. That’s a very powerful message.

How to Work with Someone Who Isn’t a Team Player

April 21, 2017 - 12:00pm

Do you work with someone who isn’t a team player? Maybe they’re overly focused on completing and promoting their own work. Or they don’t chip in when everyone else is scrambling to meet a deadline or pulling a presentation together. This isn’t simply frustrating; it can affect your entire group’s performance. How do you work with this person in a way that doesn’t make you resentful? And how can you encourage them to think more about the team?

What the Experts Say
When a team member procrastinates or displays a bad attitude, there’s a real risk of social contagion that drags down the morale and productivity of those around them. “We all pick up on subtle cues from other people, and that affects our behaviors and actions,” says Susan David, founder of the Harvard/McLean Institute of Coaching and author of Emotional Agility. “That leads to poor team efficiency, lower levels of commitment, and less focus on the shared goal.” Ignoring the issue often ends up only making it more acute. “There are a lot of negative consequences to somebody not carrying his or her load on a team,” says Allan Sloan, a professor of management at Babson College and author of Influence Without Authority. “The longer it goes on, the worse it gets in terms of how frustrated other members of the group will become.” Here’s how to work with a coworker who isn’t a team player.

Don’t jump to conclusions
It’s human nature to make assumptions about the reasons behind someone else’s behavior, even when we lack real evidence, says Sloan. “That’s how our brains work,” he explains. But this shortcut doesn’t always lead us to the right conclusions. Instead of assuming that someone is just a slacker or lacks commitment, “do a little exploration first,” he says. The roots of the person’s behavior may surprise you. It could be that they are dealing with a stressful situation at home that is leading to distraction at the office. Or they may be feeling work pressures that you are unaware of. Or they’re not sure how to best contribute. You want to avoid writing the person off or “concocting an explanation for their behavior, especially if it involves attributing bad motives to them,” Sloan says.

Start a dialogue
Approach your colleague with friendly questions, rather than accusations. Even if you aren’t in a leadership position on the team, “consider this a good opportunity to practice your leadership skills,” says David. You might ask: “What else is going on for you right now?” or “What’s motivating you?” This should give you enough insight to see the experience from their perspective.

Invite them in
More serious problems arise on a team when members shun someone who isn’t carrying their weight. So take the lead and make sure you’re not ostracizing the person. Consider taking your colleague out to coffee or lunch just to get to know them better, and bring along a couple of colleagues to promote cohesion. More interactions will promote friendlier group relations. “It’s really hard to resent somebody you understand better,” says Sloan.

Revisit the team’s mission
Sometimes a team member who is being uncooperative may actually help identify underlying issues by serving as a kind of ‘canary in the coal mine’ indicating that something is off with the group. It may be that your team’s approach isn’t working, says Sloan, or that your mission isn’t clear enough. Use this opportunity to have a conversation with the entire team about what the group’s shared vision should be and the best methods for getting there. That clarity should help boost everyone’s sense of purpose and productivity. “A lot of people go into team meetings focused only on what’s been done and what hasn’t been done,” says David. “Teams who bypassed the earlier questions about mission often tend to get into the weeds of, ‘She didn’t do this,’ and, ‘He didn’t do that,’ which leads to frustration and resentment.”

Clarify team members’ roles
Once you’ve had the bigger picture conversation about mission, it’s a good time to clarify roles. “Don’t assume everybody knows exactly what their contribution is supposed to be,” says Sloan. It could be that the non-team player has little or no understanding of what they’re meant to do. Without putting your colleague on the spot, you can suss out whether there is any ambiguity or confusion, and then help clarify duties and deadlines so that they have a better understanding of what’s expected of them.

Identify new opportunities to motivate
A team member may not only distance themselves because they’re confused; they could find the work they’ve been assigned to be pointless and boring. They may want more responsibility or an opportunity to grow their skills. If that appears to be the case, “think about whether there is a more suitable role for this person on the team,” says David. Look for ways to reassign them, even informally, to better showcase their skill sets or offer them new ways to learn. “Everyone likes to develop and project a sense of competence, or of mastery,” says David. You’ll often find that commitment to the team grows as a person’s confidence in their role increases. “People are highly motivated by not wanting to let their teammates down,” says Sloan. “Get them into the game, and they’ll go to great lengths to perform better for the team.”

Principles to Remember:

Do:

  • Inquire about your colleague’s interests, priorities, and motivations to get a better sense of their perspective and the causes of their behavior.
  • Use this opportunity to revisit the team’s purpose and goals.
  • Look for opportunities to better utilize the uncooperative team member’s specific skill set.

Don’t:

  • Develop an explanation for the colleague’s behavior without talking to them first.
  • Ostracize the team member in question. Promote more interactions to create better group cohesion.
  • Assume everyone knows what they’re supposed to be working on. Clarify team members’ roles so that people know what is expected of them.

Case Study #1: Address the root of the problem
From the outset, Wendy Patrick could see that her committee colleague wasn’t much of a team player. The two were members of a community outreach project for homeless and at-risk women, but this individual “showed up late, left early, and hardly interacted with the other team members,” Wendy says. His behavior was off-putting and bad for morale on what was essentially a volunteer project.

Rather than write the person off as a bad egg, Wendy decided to investigate the roots of his bad attitude. “I started the conversation by thanking him for his participation, and asking how I and others might enhance his experience working with the committee,” she says. She discovered, to her surprise, that he had no idea what he was expected to be doing and, moreover, was afraid to ask. “He was in over his head,” she says, “and we mistook his ignorance for indifference.”

Wendy walked him through the work of the group and how he might contribute, and he quickly identified a role that best suited his interests and experience. “Overnight, he became a happy, friendly team player,” she says.

Case Study #2: Set new challenges
When Dave Bloom was the managing editor of an ABC affiliate news program in West Palm Beach, he would gather all the members of the newsroom for a meeting to review that evening’s show. The floor manager, who handled technical specs for each broadcast, simply didn’t contribute at these daily recap sessions. “He just failed to offer any input” and could be standoff-ish with other colleagues, Dave says. Over time, his poor attitude and lack of effort “began to affect both the floor crew and the on-air talent.”

So Dave decided to reverse roles to show his colleague the importance of contributing to the team effort. “Instead of leading the recap sessions myself, I placed him in charge of the meetings for one week,” he says. The idea was to show his colleague that the team only worked well if everyone was chipping in. As the session leader, the floor manager had to offer his thoughts on the broadcast, ask for input from others, and take on the responsibility of daily problem solving. The gambit worked. “He thrived with the added responsibility,” says Dave. Clearly, his colleague had needed a challenge to help motivate him and show him the importance of team work. “It was a dramatic change after that,” says Dave. The colleague began making excellent contributions, and was so effective that Dave “gave him the role of leading the meeting after the Saturday 11PM newscast every week from there on out.”

One Cost of Increased Globalization: More Industrial Accidents

April 21, 2017 - 11:00am

Industrial accidents can be devastating to the people and communities involved. In addition to the immediate loss of life, such accidents can leave a lasting mark. For example, residents and victims of the 1984 Bhopal gas leak incident in India still live with the environmental damage created by Union Carbide, and protest yearly to publicize their continuing efforts to obtain financial compensation for damages as well as justice for the remaining perpetrators. Scientists are still trying to determine the long-term effects of the 2010 BP oil spill in the Gulf of Mexico.

However, little systematic research has explored the underlying causes of such accidents. In a recent study, we examine one crucial, yet overlooked, factor: economic globalization.

We thought it was likely that two interrelated aspects of globalization – growing international economic interactions and the state policies that facilitate them – are likely to increase the probability of industrial disasters. Regarding the former, the increased complexity of global supply chains could increase the likelihood of industrial accidents due to such factors as technological differences between home and host countries or culturally divergent perceptions of risk and workplace safety. On the latter, firms might intentionally seek out countries with less enforcement of safety regulations or choose to move particularly dangerous industries, such as ship-breaking or toxic-waste removal, abroad (known as the “race to the bottom” dynamic).

To test these linkages, we examine the possible impact of two different measures of globalization – one focusing on economic interactions, the other focused on policies meant to encourage these interactions – on the probability of major industrial accidents across 137 countries over 42 years (1971-2012). The economic interactions variable captures cross-border economic interactions that include trade (imports and exports), foreign direct investment, and portfolio investment. The economic policies variable covers state policies that restrict or facilitate more global economic openness, including tariff rates, non-tariff barriers, taxes on international trade, and capital account restrictions. Both the interactions and policies variables are coded on a 100-point scale, with higher cores indicating more economic flows and fewer restrictions, respectively. We gathered the globalization data from the KOF, a Swiss research institute that specializes in applied economics. Our major industrial accidents data comprise workplace accidents that result in at least 10 reported fatalities and/or at least 100 people reported injured or requiring immediate assistance. The data are drawn from the Emergency Events Database (EM-DAT), which provides a comprehensive listing of natural and man-made disasters since 1971.

Statistical results suggest that economic globalization increases the likelihood of industrial accidents. The findings are robust even when we control for several other major predictors of industrial accidents such as economic wealth, the share of major industries in the total economic output, bureaucratic quality, and political corruption. How big is the impact of economic globalization on the occurrence of industrial accident? Our data provides some picture of the strength of this effect. For example, the mean score of the economic policies variable in our sample is 47 (on our 1-100 scale). When we increase it by one standard deviation (from 47 to 70), the probability of an industrial accident goes up by about 54%. Similar shifts in our economic interactions measure raise the probability of an industrial accident by about 14%.

While these shifts in indices are a bit of an abstraction, they demonstrate that even after we account for other relevant factors, globalization has a substantial independent impact in increasing the probability of major industrial accidents. These findings corroborate various case-study evidence that cites the role of economic globalization in major accidents – for example, the Rana Plaza disaster in Bangladesh, which resulted in over 1,000 worker deaths, contained five garment factories that were connected to multiple global supply chains, and some attributed the disaster to the “greed and pressures of globalization.” One of the primary factors underlying the Bhopal disaster was the ability of Union Carbide to exploit lower safety regulations in India in order to lower costs.

In terms of implications, our study reveals a major conflict between worker safety and globalization, as a policy commitment to economic openness may come at the cost of more industrial accidents.

Governments play a key role here, as it is the state that is responsible for the relevant labor and safety regulations, as well as enforcement of other environmental and building codes which should ostensibly reduce the probability of industrial accidents. However, state officials have a natural tendency to underinvest in accident prevention, as politicians are more inclined to enact policies with short-term benefits even if such benefits have larger costs in the long run.  While major accidents impose political “costs” on state officials – particularly if they bear the blame for the occurrence – potential costs are discounted because their occurrence is a future probability rather than a present certainty.

Moreover, it is possible that blame for such accidents, should they occur, could be borne by future administrations. Thus, though such investment may be cost effective, its political benefits are elusive. As former U.S. Congressman Barney Frank once noted, “No one will ever get reelected for avoiding a crisis.”

To a certain extent, the dilemma we uncover is similar to the dilemmas that surround all sorts of other long-term public goods such as infrastructure, preparation for natural disasters, or environmental protection. Specifically, it cannot be simply assumed that either market rationality or political interests will necessarily result in improved worker safety. Firms and businesses cannot be left to their own devices to ensure a safer workplace. Globalizing states face a major governance challenge in this area, as the short-term dictates of both the marketplace and the political arena may further reduce the willingness of states to take the steps necessary to lessen the likelihood of industrial accidents.

Concerted efforts at multiple levels – including states, firms, international organizations such as the ILO, as well as NGOs and civil society groups – might be necessary to reduce the occurrence of these tragic, and ultimately preventable, disasters.

There’s a Leadership Vacuum on Climate Change. Business Should Fill It

April 21, 2017 - 10:30am

NASA/JSC

This Earth Day is different. The world’s largest economy is governed by a president who has called global warming an “expensive hoax” on multiple occasions. He has threatened to “cancel” the Paris climate agreement, and appointed a head of the U.S. Environmental Protection Agency, Scott Pruitt, who as recently as last month has reported not believing that human activity or carbon dioxide are primary contributors to climate change, contradicting 150 years of basic physics and decades of scientific consensus. The Trump administration has proposed cutting the EPA’s budget by over 30%, and the agency’s staff by 15,000 jobs. This major shift in the executive branch’s attitude toward climate change leaves a big void in the U.S.’s — and the world’s — environmental stewardship, one that the private sector must fill.

Every Earth Day it’s tempting to write that “every day is Earth Day” and that we need to protect our shared resources. It’s trite…because it’s true, of course. A stable climate, clean air, clean water, safe food, and on and on, are not just nice-to-haves, but are critical for our well-being. Yet it seems to surprise many in the “environmental regulations kill business” camp that these basic biophysical supports for life also support business.

We could endlessly debate the merits of the costs and benefits of specific regulations, but at the macro level, a law as important as the Clean Air Act not only is not expensive — it’s probably the most profitable regulation in human history. Some sectors and companies bear more of the up-front expense of tackling carbon emissions, with the energy sector being the most obvious one. But many studies have estimated that the reduction in health care costs saves the economy, and thus all companies and citizens within that economy, tens of trillions of dollars. And that’s just direct health care benefits. There’s much more to keeping the economy clean. It’s increasingly strange to have to say this, but workers struggling to breathe are not productive, places without access to safe water, like Flint, Michigan — not to mention 3,000 other U.S. counties where lead rates are even higher — have trouble building a strong economy, and people in cities fighting rising seas or extreme drought do not make great customers. In short, the economy can’t thrive if people and the planet suffer.

Weakening air, water, and climate protection is a lot like smoking two packs a day and eating mostly sugar, and then wondering why you feel awful. And yet this administration seems hell-bent on allowing our air to become less clean (when 40% of us already live in areas with “unhealthful levels of ozone (smog) or particle pollution”), allowing toxic pesticides to remain in our food system, and allowing our burgeoning climate collapse to accelerate. (For example, the Great Barrier Reef is dying fast, a harbinger of a dead global coral system, which could cost the world a trillion dollars and make the planet noticeably less rich and vital.) Even though many people around Trump are telling him to go slow on pulling the U.S. from the global climate agreement, his clear disdain for climate discussions sends a dangerous signal to the world.

Business leaders can choose to send a different signal. The week of Earth Day has always been a time for business to come out in support of the planet. For years, it was mainly about employees volunteering to plant some trees, but as companies have grown more sophisticated about the role of sustainability in their strategies, and about the dangers and opportunities in a changing climate, their announcements have gotten bigger and bolder.

Just this week, three large companies demonstrated serious commitments to reducing emissions across their value chains (where most companies’ emissions lie):

  • Walmart announced that it would ask suppliers to reduce greenhouse gases by 1 billion tons by 2030. And while 1 billion is only a fraction of global emissions, which run in the 40-billion-ton range annually, it’s a lot for one company to take responsibility for. It’s 50 times Walmart’s 2010 supply chain goal, and it sets a high bar for others to aspire to.
  • Apple, which already sources renewable energy for nearly all its operations, announced that three more suppliers were committing to 100% renewable energy. (Disclosure: I’ve done paid speaking for executives at Walmart and Apple.)
  • Swedish clothing giant H&M set a “carbon positive” goal for its entire supply chain by 2040. In apparel, this is more than aggressive.

These announcements follow some greenhouse gas goals that food giants General Mills and Kellogg set for their supply chains last year. And even without the added element of supply chain targets, there are now hundreds of large companies with science-based carbon targets or 100% renewable energy goals.

I realize that many firms are fighting for environmental protection with one hand and trying to claw back environmental rules with the other. For example, the major auto companies are investing in new technologies and electric vehicles while asking the Trump administration to weaken fuel efficiency standards.

But companies have some new opportunities to let the world know where they stand. The next week will be bookended by two big marches on Washington. Scientists, feeling pressured by anti-fact rhetoric on many issues, have organized a March for Science on Earth Day (the need to publicly say “science matters” is terribly sad, but apparently it’s necessary these days). A week later, there will be a Climate March, on April 29, and hundreds of thousands are expected to march in different cities around the country. So far, companies have been more comfortable supporting the science march, but even though some anti-corporate rhetoric will be on display at the climate event, companies should stiffen their spines and step into the fray. (Here are 16 ways companies can support the climate march.)

I realize that some CEOs will see speaking out in favor of environmental protection as a partisan issue, especially in our politically charged environment. But the science on this isn’t blue or red, and the needs of customers, suppliers, and shareholders are clear. GE CEO Jeff Immelt framed some recent remarks along these lines, saying, “We believe climate change is real and the science is well accepted. Our customers, partners, and countries are demanding technology that generates power while reducing emissions, improving energy efficiency, and reducing cost.”

I hope more business leaders in the U.S. will follow his lead. A growing understanding that they need climate protection to save their physical assets, supply chains, and the economy at large should be significant motivation to step out.

And the quicker they realize that an administration that impedes progress toward a clean economy is not serving their interests, the faster they’ll rush to fill a leadership vacuum — before their global competitors do.

When One Person’s High Performance Creates Resentment in Your Team

April 21, 2017 - 10:00am

Organizations face a dilemma in their hunt for talent. They pursue the proverbial “best and brightest” who can outsell, outthink, and outproduce their peers. So they spend sizable resources to attract and retain high performers who stand out. But often these organizations also want teams that function in solidarity. So they place their prized recruits in collaborative groups and tell them to fit in.

Many managers miss or underestimate the potential harm to high performers from their teams. Often with good intentions, managers set up high performers as targets for sabotage, aggression, and exclusion. As the Japanese proverb warns: “The nail that sticks up gets hammered down.”

Some high performers exit their organizations to escape such negative social consequences. Those who stay often flounder without peer support. Research estimates over 30% of high performers feel a lack of engagement at work, and 25% expect to work elsewhere within a year.

With the rise in collaborative models of work, the problem gets worse. Our research, forthcoming in the Journal of Applied Psychology, suggests that an emphasis on teamwork in the modern workplace has amplified the risks for high performers. That’s partly because high performance is relative and based on social comparison. In communities with frequent interaction, opportunities for such comparison increase.

We draw our insights from a field study of 414 stylists at 120 Taiwanese salons, followed by an experiment involving 284 business students in the United States. The salons offered a context that reflects many characteristics of workgroups: a socially dynamic, open environment where stylists worked both individually and interdependently. Rewards were also determined based on both individual contribution and collective success. To cross-validate findings from the field study, we then chose a complementary approach: a controlled experiment among MBAs where we could randomly assign conditions (i.e., more cooperative or a more competitive group norms) and manipulate the individual performance feedback after tasks.  Our evidence from both the field study and the experiment points to a clear social downside of high achievement, as peers were more likely to belittle, insult, and damage the reputation of high performers. In addition, we found that the social penalty increases in more collaborative workgroups.

One obvious trigger for the undermining behavior is envy. People led by their emotions often smile at the misfortune of others. But our study suggests that something even more sinister may be at play: peers may lash out against high performers as a strategic, calculated act.

High performers often receive first choice of scarce resources such as high-profile work assignments and preferred customer accounts, which can spark threat perceptions among peers. High performers may also shatter performance standards, create more work, and raise expectations for the group. Nobody likes “rate busters” on unionized factory floors, for example, or “troublemakers” who expose incompetence and ignorance.

This tension is heightened in collaborative communities, where peers may see themselves as acting selflessly on behalf of the team when they knock down high performing outliers who threaten solidarity.

But that’s just half the story revealed in our research findings. Self-interest also simultaneously pulls peers in the opposite direction: toward supporting the high performers in their midst. Regardless of envy and potential threats, high performers create perks for their teams like greater access to resources and greater leader satisfaction with the group.

High performers may also earn rewards on behalf of others, like when honor roll students do the bulk of the work on group projects at school or when all-star athletes carry their teams to victory. Benchwarmers don’t complain when championship rings get passed around.

The benefits point to an important paradox in our findings. The same high achievers targeted for sabotage simultaneously earn higher levels of support. Love and hate coexist, largely because peers view high performers as both threatening and beneficial to their careers.

Such contradictions take a toll. Research suggests that experiencing both friendly and hostile responses from the same source can be disorienting and more harmful to one’s work and health than hostility alone. This is because the inconsistent messages increase interpersonal uncertainty as well as cognitive and emotional burdens.

Managers who want to both maintain high returns and hang on to their high performers should anticipate that high performers will draw fire, clarify that undermining high performance will not be tolerated, and be prepared to lend high performers emotional support.

Beyond that, our research suggests two broad categories of intervention based on the understanding that peers’ treatment of high performers follows rational assessments of threats and benefits.

First, managers can address peer concerns that high performers threaten their welfare and resources. One approach might be to create a more balanced performance review system that values team members’ contributions beyond task accomplishment — the dimension that most favors high performers.

Organizational citizenship behaviors like helping others, making constructive suggestions, and being a good sport also matter in business, helping to lubricate the social machine of the organization. High performers sometimes forget these dimensions, focusing on tasks and ignoring people.

Second, and more importantly, managers can cultivate the understanding that everyone wins with high performers on the team, despite the reality that equal allocation of resources within a group is not always feasible or fair. To balance the inevitable peer perception of threat, managers can emphasize the upside.

For example, high performers bring expertise, experiences and connections that often translate into better team reputation, goal accomplishment and overall performance — all of which benefit everyone on the team. Managers can further facilitate the transfer of benefits by setting up star performers as mentors, allowing peers to learn and improve.

Along similar lines, managers can help high performers help themselves by coaching them to demonstrate prosocial values and behaviors. When high performers have others’ best interests at heart, they become less likely to hoard credit and dismiss team contributions, thus reducing their chances of being perceived as a threat to the team.

Managers should pay particular attention to these issues in workplace cultures that emphasize harmony and cooperation. The key is helping the team recognize that the benefits may outweigh the threats when they collaborate with high performers.

Hot shots who can deliver results are valuable, hard to retain, and costly to replace. So managers of high performers should stay vigilant, watch for signs of isolation and disengagement, and intervene early to cultivate and protect their investment. Along with the Japanese proverb, they should heed the wisdom of a similar saying: “Tall trees catch much wind.”

To Ace Your Job Interview, Get into Character and Rehearse

April 21, 2017 - 9:56am

You’ve landed an interview for the job of your dreams. You’re ideally suited for the position, and your resume is bulletproof. You’ve researched the company, the culture, the job, and the person who will be interviewing you. (Thank you, LinkedIn.) You’ve got your answers ready and selling points lined up. But when the interview starts, something’s “off.” You want to be commanding, but your nervousness gets in the way. Your voice sounds stiff. You hear yourself trying too hard, but you can’t seem to stop yourself. As the minutes tick by, your answers sound more and more like canned monologues. And your interviewer isn’t warming up — the job opportunity is slipping, slipping, slipping out of reach.

What went wrong?

As I see it, you probably prepared your content well, but — like many people — you didn’t prepare something equally, if not more important: your performance. Yes, performance, the theatrical kind. Just as an actor prepares the character they will play on stage or screen, you can steal some tricks from the actor’s toolbox to prepare the character you will play in the interview. For this kind of scene, you’ll need to exude confidence, competence, likability, flexibility, and more. How to do this in a high-stakes situation? Tap into your natural ability to imagine and pretend — and craft your character.

But wait a minute, you say. Character? Pretend? What about being my authentic self? I get asked about that a lot, and it’s a good question — many job coaches and experts extol authenticity, values-based behavior, and being “genuine” at work.

My company’s own two decades of practice and research have focused on what we call the “Becoming Principle,” in which the tools of theatrical performance give us the transformative power to become who we are not… yet. When we consciously use our capacity to pretend and perform, we can grow new — and genuine — parts of ourselves. (The Latin verb in the word pretend is tendere, literally to stretch, not to fake or wear a mask.) This idea resonates with findings of Hermina Ibarra in her landmark HBR article, “The Authenticity Paradox.” Ibarra writes that our adherence to one “true self” can hold us back as we take on new challenges and bigger roles. In other words, by sticking to “your story,” you’re limiting yourself.

In the job interview, you are literally auditioning for a new role. Developing your skills as a performer will help you not only to land the job, it will also help you grow and gain a new skill that is critical in the 21st century workplace — navigating constant change that requires flexibility and new performances all the time.

Who do you want to be in this scene? That’s where your “job interview character” comes in. Make a list of the qualities the successful candidate should convey. To some extent, these qualities will depend on the particular job you are applying for — a software engineer and a sales director will need to emphasize different leading attributes. And you’ll want to convey in your performance that you have a feel for the company’s culture — a laid-back dude vibe could be a turn-off in a formal environment and vice versa.

You and Your Team Series Career Transitions

Skilled interviewers will often be looking for the qualities that are known to correlate with success on the job, such as confidence, energy, and positive body language. How to physically act out these personal qualities? Much has been written about the body language of confidence and how specific gestures such as physical stance, tone, handshake, and eye contact instantly communicate both ease and authority. If you are not sure how to portray these qualities, look for others who seem to embody them, then observe, closely, how they do it. You’re not looking to slavishly copy, but rather creatively imitate them. Try it on, try it out, and see what works for you.

Most important — rehearse! Like any good performer, you need to practice in advance. If you tend to be shy, expand your range of expression (and what you’re comfortable doing) by practicing what might feel like an exaggerated performance, using hand gestures and passion. If you talk a lot using run-on sentences with no period at the end (a lot of us do this when we’re nervous), practice pausing, and breaking your thoughts into short sentences.

Even with practice and rehearsal, we can get overloaded and stressed in new situations, particularly when we’re the center of attention and under scrutiny. That’s why I suggest that — in addition to those outlined above — your job interview character have a special trait: instead of performing as a person who is trying really hard to get the job, perform as someone who wants to have a great conversation with the human being across from you.

Your mindset is more like I’ve done some cool and interesting things in my life and work that I’d love to share, and I’m really interested to hear about you and your company. In other words, you’ll play the role of a good conversationalist. Here’s how:

  • Be curious. Most people talk too much during an interview. Instead, perform curiosity — ask open-ended (not yes or no) questions that are connected to what you just heard. This will help you discover common ground with your interviewer, which is key to making a great first impression.
  • Accept every conversational offer. Of course you need to prepare “talking points”  for your interview. But being in a conversation (instead of delivering a rehearsed pitch) means creating back-and-forth repartee. That means you can do what improvisers do, and treat everything the interviewer says or does as an “offer” — which you should accept and build upon (rather than waiting for them to finish so that you can fire off another talking point). You can practice this kind of listening today, by starting every sentence with the words “yes, and…”. Improv skills are now highly valued in the workplace. And in an interview, this fundamental improv technique will make you less focused on proving yourself, and much more attuned to the other person.
  • Prepare to tell stories. This may be one of the most powerful elements of a great conversationalist performance. The ancient art of storytelling has a powerful effect on stirring empathic emotions and boosting your own likeability. Prepare and practice yours in advance so that when the interviewer asks if you’re experienced in leading projects, you can tell the story in a way that dramatizes the most recent project you led. Describe how the project began, what you did, the obstacles you faced and how you overcame them. Good stories have a beginning, middle, and end. Make them short, but pack a punch.

Some of these techniques won’t feel like “you” — and that’s the point. By making use of your natural ability to perform in new ways, you’re expanding your comfort zone and increasing your repertoire of what feels natural. This is how you grow. It’s how you become who you are not yet. It’s also how you get the job.

Research: Immigrants Played an Outsize Role in America’s Age of Innovation

April 21, 2017 - 8:05am

America has always been “a nation of immigrants” to quote the title of John F. Kennedy’s famous book. Yet the role of immigrants in U.S. competitiveness has become increasingly contentious, especially in light of the recent presidential election. Our research attempts to shed light on this debate, by focusing on the history of immigrants as technological innovators.

To study the role of migrant inventors in U.S. innovation, we linked the birthplace of millions of individuals from Federal Censuses between 1880 and 1940 to millions of inventors from patent records. Using labor income information in the 1940 Census, we further examined how immigrant and domestic-born inventors were compensated.

Related Video Why Immigrant Entrepreneurs Are So Important to the U.S. Many of them are creating jobs.

See More Videos > See More Videos >

Large scale data compiled from U.S. patent and Census records allows us to move beyond the anecdotes of successful immigrant inventors, of which there are many. For example, Alexander Graham Bell, a key figure in the invention of the telephone, was born in Scotland; the Swedish inventor David Lindquist played a major role in the development of the electric elevator; and Herman Frasch, a German-born chemist, worked in Philadelphia and Cleveland on mineral exploration and extraction, which can be linked to present-day fracking.

Our study shows that immigrants accounted for 19.6% of all inventors between 1880 and 1940. Today, that share is approximately 30%. The chart below shows the share in each state of inventors who were born abroad. Immigrant inventors were heavily concentrated in U.S. “rust-belt” states, which were some of the most productive areas during the late nineteenth and early twentieth centuries. They were noticeably absent from southern states, where they may have faced either fewer economic opportunities, or cultural barriers to assimilation.

 

We also looked at the technology areas in which immigrant inventors were active. The largest share of immigrants were involved in developing medical technology inventions, such as surgical sutures. But medical technology accounted for just 1% of all U.S. patents. In areas that had a much larger effect on the U.S. economy at this time – specifically electricity and chemicals, which accounted for 13.9% and 12.6% of all U.S. patents respectively – immigrants were also strongly represented. Migrant influence was widespread, with migrant inventors accounting for at least 16% of patents in every technology area. The majority of immigrant inventors originated from European countries, with Germans playing a particularly prominent role.

 

To examine the relationship between immigrant inventors and U.S. technological development over the long-run, we constructed a measure that we call foreign-born expertise. In effect, this measure captures the extent to which inventive expertise in a particular technology area may have been transmitted by the movement of foreign inventors to the United States.

Areas of technology with higher levels of foreign-born expertise experienced much faster patent growth between 1940 and 2000 than otherwise comparable technology areas, in terms of both the number of patents and a citation-adjusted measure of patent “quality”. That relationship isn’t necessarily causal, however our results provide suggestive evidence that immigrant inventors played a key role in the development of America’s technology leadership.

Migrant inventors may have an outsized influence on innovation for two primary reasons. First, immigrant inventors like Nikola Tesla, who was born in Serbia, develop important ideas in their own right. Additionally, their insights may augment the skills of domestic inventors through collaboration. For example, in the 1940s Canadian immigrant James Hillier developed the first commercially viable electron microscope at Radio Corporation of America alongside Ladislaus Marton, a Belgian inventor, Vladimir Zworykin, a Russian inventor, and U.S.-born engineers.

Our study also shows that immigrants were paid less on average than domestic inventors, despite being more productive in terms of patenting. The precise source of this wage penalty is difficult to pin down; however, inventors from other marginalized groups, such as black and female inventors, were also paid less than similarly productive white males. Our evidence is therefore consistent with classic notions of discrimination, where the wage income of certain types of individuals in the market is lower due to factors unrelated to their productivity.

Overall, our study suggests that immigrant inventors were vital to U.S. competitiveness, despite their lower wages. Although high skill migration is not costless – it is possible that immigrant inventors might displace domestic inventors, for example – an inflow of foreign talent may create positive benefits through improved skills, innovation, and other spillovers. Technological innovation is a central determinant of long-run economic growth, and access to the best inventors matters, regardless of their country of origin.

Have Our Attitudes About Sexual Harassment Really Changed?

April 20, 2017 - 6:02pm

So, Bill O’Reilly — perhaps the biggest name in cable news — has been fired by Fox News after multiple allegations of sexual harassment.

The fact that O’Reilly has been the subject of high-profile sexual harassment claims before, and recently inked a fresh contract with Fox, even as news of the allegations was splashed across the front page of the New York Times, has led many observers to ask: “What changed?” Pragmatists have observed that dozens of advertisers had deserted his show, The O’Reilly Factor, while others have reported that Rupert Murdoch’s sons pushed for the anchor’s ouster amid financial concerns and low employee morale.

But the most common, and the most general, perspective is that life in corporate America has changed. The self-congratulatory consensus seems to be that things are different now than they were in 2004, the last time O’Reilly faced a major uproar over his conduct with a coworker. (That alleged episode will forever be etched in my mind, due to O’Reilly’s unorthodox use of the word “falafel.”) A mere 13 years ago we were blind, but now we see.

I wondered how much our attitudes about sexual harassment really have changed, so I delved into HBR’s archive for a gut check. I came across a 1981 article by Eliza G.C. Collins and Timothy Blodgett, who had conducted a survey of HBR subscribers the prior year in coordination with Redbook. Using the U.S. Postal Service to distribute hard-copy surveys to 7,408 people, who then had to fold up the pieces of paper and send them back so that they could be hand-coded and analyzed (!), the survey had a 25% response rate. (Because only 7% of HBR subscribers in 1980 were female, almost every single female HBR subscriber was asked to participate in the survey. The final sample of respondents was 44% female as a result.)

The major finding: Men were much less likely to agree that sexual harassment was a real problem. While only 32% of women agreed that “the amount of sexual harassment at work is greatly exaggerated,” more than twice as many men (66%) thought it was. As one 53-year-old male executive put it, “I’m baffled by this issue. I used to believe it was a subject that was being exaggerated by paranoid women and sensational journalists. Now I think the problem is real but somewhat overblown.” (Remind me to make Paranoid Women and Sensational Journalists the title of my memoir.)

Major differences also existed in how men and women thought harassment should be dealt with and what constituted harassment (unless it was completely egregious, like a male boss who constantly pinches a female subordinate or threatens to withhold a promotion unless she sleeps with him). Women were more likely than men to suggest that harassers be formally warned or fired, while men, wrote the researchers, “seem to think that women can overcome sexual overtures through tact…. In other words, it’s her problem.” But there were exceptions: A 43-year-old female office manager replied, “The so-called liberated women are probably the ones who are causing this commotion…. It would be better for everyone if women would start acting more like people.”

Interestingly, women were much more likely to think that men would enjoy or condone each other’s harassment than men actually were. The researchers described a scene in which two men and a women are riding together in an elevator. One man makes a “suggestive remark about her body” and then “winks in amusement at his companion.” Women were much more likely to think that the male bystander would share in the “amusement” than the men were: 41% of female respondents predicted the two men would both find the remark funny, compared with 14% of male respondents. Men were divided between thinking the second man would remain silent out of embarrassment (23%), would show his disapproval through “coolness or aloofness” (22%), or “would feel neutral, believing that if the woman objects, it’s up to her to say so.” Only 17% thought the second man would privately express his disapproval with the other executive — an option selected by just 5% of women.

When the bystander was described as a more senior executive than the harasser, a plurality of women still predicted that both men would find it funny (23%), but even fewer men thought that was the case (7%). Men also became much more likely to say that the senior executive would give the junior harasser a dressing down in private (37%), something only 18% of women agreed with.

Why were women so much more likely to predict that male bystanders would either enjoy watching them be harassed or do nothing to respond to it? Perhaps because male silence allowed them to believe it. After all, if men (as they report) are relying on “aloofness” to convey their disapproval, and are only reproaching their colleagues out of earshot of women, how are women to know? As one 38-year-old male vice president put it, “There is a male code of silence regarding harassment of females that has to be broken…. Either too many men never recover from being high school jocks or they understand that corporate power can be a new way to be attractive. Having suffered through both lessons, I feel free to comment.”

So how much has really changed in the past 35 years? Well, 98% of companies today have anti-sexual harassment policies, and 70% provide some type of training in how to recognize and deal with it. In the 1981 HBR survey, just 29% of companies reported having any formal prohibition against harassment, and only 8% reported having ”manuals, films, and so forth” by way of training. That is progress of a sort, although I’m not sure what sort: A 2016 study found that although (or perhaps because) corporate sexual harassment policies have become more standardized and formulaic, employees often interpret them negatively, and feel that they create a culture of fear instead of a culture of mutual respect.

Moreover, recent statistics show that despite all of the policies and programs, one in three women have experienced harassment, and only 5%–15% of those women complain to their companies. And bystanders often remain silent, whether they are male or female. Even now, when women do lodge formal complaints, firms still have a tendency to retaliate against them, rather than punishing their harassers, unless more women come forward or the cacophony of complaints becomes too much to ignore.

At Fox it took a raft of horror stories before the company moved to address its problem, and even then it seems the company may have been motivated not so much by a desire to be fair to its female employees as by the fierce glare of public shame. Perhaps, then, what’s really changed is not our attitudes about harassment, but rather the brightness and staying power of that spotlight.

Our Delusions About Talent

April 20, 2017 - 4:23pm

Tomas Chamorro-Premuzic, professor of business psychology at University College London, dispels some of the myths that have persisted in the 20 years since McKinsey coined the phrase “war for talent.” He argues the science of talent acquisition and retention is still in its early stages. Chamorro-Premuzic is the CEO of Hogan Assessments and the author of the book The Talent Delusion: Why Data, Not Intuition, is the Key to Unlocking Human Potential.

Download this podcast

What to Do About Mediocrity on Your Team

April 20, 2017 - 1:00pm

The toughest test of a manager is not how they deal with poor performance — it’s how they address mediocrity.

I’ve been struck over the years watching executives opine in public about the need for “accountability” and “high performance,” then complain helplessly in private about one or two middling members of their own team. You have no moral authority to ask other managers to hold people accountable if you’re not doing so yourself. Are you sure you’re doing enough to push for high performance? What do you do when someone’s work is good but not great? How many employees do you have whose performance isn’t bad enough for termination, but whom you’d pass on if you could get a do-over on hiring them?

Unfortunately, if you’re hoping for a silver bullet to address a mediocre performer, I have little to offer. Chronic mediocrity is a symptom of ineffective leadership, not anemic personnel.

But mediocrity is not destiny. In fact, I’ve even seen examples of government bureaucracies in tragically broken countries that dramatically turned around their performance in a matter of months. They do it through four leadership practices that lead to performance excellence. Each is a prerequisite for the next.

Related Video What Great Managers Do Exceptional managers find and capitalize on their employees' unique strengths. Learn how they do it with this 6 minute video slide deck. Download a customizable version in Subscriber Exclusives. See More Videos > See More Videos >

1. Show the consequences of mediocrity. Your first job as a leader is to ensure everyone is clear about what they are doing and why they are doing it. Mediocrity is typically evidence of disconnection between someone’s work and the consequences of their mediocrity.

A telecommunications IT manager who managed 3,000 software engineers began setting new performance standards by having them manage customer calls for a full shift using the shoddy software they were creating. Those who had these experiences returned and shared stories with their colleagues about the misery they were authoring. In a matter of weeks, the sleepy team had a new alertness about their work — what they were doing and why it mattered. They were no longer about cranking out code; they were about giving reliable tools to the people they served.

Find ways to connect people with the experiences, feelings, and impact of good and bad performance. Keep the human connection alive by telling stories that illustrate work well done — or not. And avoid impersonal/bureaucratic language when talking about performance; frame your work in human terms every time you can.

2. Use concrete measures as influence. Mediocrity often hides behind a fig leaf of absent, fuzzy, or excessive measures. In contrast, meaningful measures make poor performance painfully apparent.

Ellen Johnson-Sirleaf, the president of Liberia, dramatically boosted the efficacy of her massive government bureaucracy when she published meaningful, measurable goals because now there was a context within which to hold public servants accountable. At the beginning of her most recent term, she and her cabinet committed publicly to, among other things:

  • Put 6,000 young people to work on road maintenance and beach cleanup projects.
  • Open 150 km of feeder roads, linking 30 communities in two counties.
  • Open 150 new sanitation facilities.
  • Open 75 community wells in three counties.

The goals connected clearly and meaningfully to the work her leaders were doing and why they were doing it. But had she stopped at creating warm and fuzzy shared aspirations and neglected to translate it to a minimum number of meaningfully measurable goals, her influence would have been limited.

3. Establish peer accountability. Mediocrity is also often a sign of strong supervision. That may sound counterintuitive, so stay with me here. My colleagues and I have found that:

  • On the weakest teams, there is no accountability.
  • On mediocre teams, bosses are the source of accountability.
  • On high performing teams, peers manage the vast majority of performance problems with one another.

On top performing teams, peers immediately and respectfully confront one another when problems arise. There is no way for even the strongest supervisor to see and address every performance gap. And the harder you try to do it, the more you’ll enable mediocrity.

Once you’ve helped the team connect deeply with what they do and why, and established meaningful measures, you need to build a culture of peer accountability – where everyone can challenge anyone if it is in the best interest of serving the shared mission. Regular weekly reviews can give opportunities for mutual feedback and establish peer-accountability as a norm.

Further Reading

I watched a group of female entrepreneurs in Bangladesh ask each other difficult questions about the emotionally uncomfortable steps each needed to take to expand their small businesses. More seasoned leaders taught and modeled skills for speaking up. Norms were strong because new members were quickly challenged if they weren’t challenging their peers. In this supportive and demanding culture, these women were able to expand their businesses.

4. Speak up. High performance is a norm that needs to be defended regularly and vigilantly. There will inevitably be times you will be asked to make personal sacrifices to defend that norm. What you do in these moments is a sign to the team of your commitment to high performance — and, therefore, your worthiness to demand it of them. Here are three common moments:

  • There’s an elephant in the room. As a boss, it’s your  job to address these, especially when no one else is. If a corporate initiative is an utter but un-discussable failure, your team will watch whether you have the integrity to point out the emperor’s lack of clothes.
  • Your boss is failing to keep commitments your team needs in order to get their work done. All eyes will be on you to see how you handle it.
  • A chronic poor performer is a clear impediment. How you handle this situation will let your team know whether your highest value is keeping the peace or pursuing your mission. If you shrink from or delay in addressing this issue, you don’t just lose that person’s contribution — you send a message to everyone else about your values.

When you ask a group to step up to high performance, you are inviting them to a place of stress — one where they must stretch, where failure is possible, where interpersonal conflicts must be addressed. Rather than step into this uncomfortable place, some will watch for hypocrisy in you in order to excuse their retreat to safety. How you handle these crucial moments will either amplify or eliminate your influence.

Individual performance problems are far easier to address if you’ve done the work of establishing a norm of excellence. These four simple but important practices can rapidly and profoundly shift a group’s expectations in a way that leads to both better results and a substantially more rewarding work experience for everyone.

Pages