Thursday, August 29, 2013

Physical Tools for Better Brainstorming

Fast Company Associate Editor Margaret Rhodes has written an article about an interesting new set of physical tools designed by Smart Interaction Lab to facilitate better brainstorming.   The Totem series of objects includes Alterego - a set of rings designed to help a group bring Edward De Bono's six thinking hats technique to life during a brainstorming session.  The video below demonstrates the Alterego tool.  The Totem series also includes the Baton - a simple device designed to give one person the opportunity to talk, while others listen carefully and actively.  The third device is called Echo.  According to Smart Interaction Lab

"Echo is a recording/playback bell-like device that can fit easily and comfortably into any setting—from creative spaces, to the living room of your home, to cafes. Echo works in two ways: it records the background noise from wherever it is placed, and as soon as a user picks it up and puts it to their ear, Echo will play back what it previously recorded. By shaking it, Echo will randomly play back other sound bytes from other parts of the day. The main aim of Echo is to help users get inspired by other adjacent creative conversations, keywords, and quirky background noises that we would not be able to pick up on without the help of technology."

As the Fast Company article notes, no one has researched the effectiveness of these tools yet.  However, I do believe that these tools are worthy of further testing and experimentation.  Teams should try these out and see if they can enhance the quality of brainstorming dialogue.  Keep in mind though.  The tools alone will not enhance brainstorming effectiveness.   The tools bring to life or remind us of key principles about how to have productive creative conversations.  We still need to have the discipline to use those principles.  The objects are reminders, but they can't dictate the right behavior. 
TOTEM: ALTEREGO by Smart IxD Lab for BCN Maker Faire from Smart InteractionLab on Vimeo.

Wednesday, August 28, 2013

Questions about Amazon

Vacation was wonderful, and now it's back to preparations for the new academic year... as well as a return to blogging.  As I'm catching up on various business news, I began thinking a great deal about the future of Amazon.  I have a few questions for readers to ponder:

1.  Will Amazon reach a point of  diseconomies of scale and scope sooner rather than later?   Many firms strive to achieve the benefits of size and scope, hoping it will juice their profit margins and overall return on invested capital.  At some point, though, size and scope become a handicap rather than a strength.   The complexity of managing a large, multi-business enterprise becomes problematic.  As we watch Amazon, as well as its founder Jeff Bezos, moving into more and more lines of business, one has to wonder whether the company will reach that point of diseconomies BEFORE it ever generates strong profit.  For years (17 years, in fact), investors have bet on Amazon, in hopes that its strategy would eventually yield high profits.  They have been very patient, incredibly so in fact.   What if the profits never materialize because Amazon gets too big and complex to manage?  I'm not predicting this fate, but I am wondering about how thin Bezos may become stretched as the company expands, and as he engages in other ventures such as the Washington Post.

2.  What exactly is the Amazon business model, and how new is it?    I read the other day that Amazon Prime accounts for a significant share of the company's rather thin profits.   That reminded of another business model.  Think about Costco.   The successful company makes a big chunk of its money from the membership fee.  Amazon Prime is essentially the membership fee.  In other words, Amazon's business model resembles Costco much more so than a traditional retailer.   Most warehouse clubs operate with very thin margins, and they use the membership fee as their profit engine.  Amazon may be the same, more similar to brick-and-mortar retail than many have imagined.

Wednesday, August 14, 2013

Project Management Podcast

Andy Kaufman interviewed me recently for his terrific People and Projects Podcast series.   Andy's expertise lies in the field of project management.  His blog has a wealth of resources for managers responsible for managing complex projects in a variety of fields.   To access the podcast, please click here.  I hope you enjoy it. 

Thursday, August 08, 2013

Budweiser: Can It Go Global?

According to the Wall Street Journal, Anheuser Busch Inbev is making a big push to take the Budweiser brand global.   A quick look at the brand's performance in the United States tells us why the company is focused on expanding Budweiser's global reach.  The historic brand's consumption in the US has fallen for twenty-four straight years, and it has now fallen to number 3 in market share in the United States (behind Bud Light and Coors Light).   Budweiser faces challenges winning over customers in foreign markets though.  As the Wall Street Journal reports:

"Adolphus Busch launched a pale lager in St. Louis fashioned after beer from the Bohemian town of Budweis—has never won over most beverage connoisseurs. It scores only a 56, when any rating below 70 is "poor," on the website Beer Advocate. In Europe, where some beer brands have been popular for 500 years, Budweiser 'is not seen as a real beer by beer aficionados,' says Ian Shackleton, a London-based analyst with Nomura."

Budweiser faces a more fundamental challenge though.   In global markets, the local beer brands still dominate.  Many companies, including Anheuser Busch Inbev, have pursued acquisitions across the globe, because they understand this dynamic.  In the article, SAB Miller CEO is quoted: 

"We remain convinced beer is fundamentally a local business,'' says Alan Clark, SABMiller's chief executive in an interview. Although SABMiller is expanding international distribution of brands such as Miller Genuine Draft and Italy's Peroni, it puts far greater stock in its local beers, like Snow. "There's an emotional resonance we find consumers have with beer brands which frankly is different," he says. "We just see it continuing."

Of course, the question is:  How large are those global economies of scale, if local brands dominate so much.  What value does the global parent add?   I wish that Alan Clark had commented on those core questions.

Wednesday, August 07, 2013

Break Up the Washington Post Corporation

If I told you that a company had the following business units, what would you say? 
  • an education and test preparation business
  • a set of local television stations
  • an internet company that helps churches engage in outreach and raise money
  • a company that makes components for industrial furnaces
  • a home healthcare and hospice provider
Most analysts would say that this company has a scattered strategy.   The company: the Washington Post Co. - or whatever it will be called now that Jeff Bezos has bought the flagship newspaper for $250 million.   With the newspaper gone, the Washington Post Co. will soon face pressure for more strategic change.  Investors will argue that this unrelated diversification strategy makes no sense.  Investors can diversify risk much more effectively and less expensively on their own.  They don't need the executives at the Washington Post Co. to do that diversification for them.  

Most people are focused on the Bezos' acquisition right now.  They are examining the future of the newspaper.  Can Bezos transform it?  Soon, though, many eyes will turn to the company that remains.  Expect investors to push for more change.   They will, rightfully, demand a clear strategy moving forward.  The key question: What does the Washington Post Co. want to be moving forward?

Tuesday, August 06, 2013

Why Great Leaders Don't Take Yes for an Answer

Here's a fun video that we produced to introduce readers to the new edition of my book, Why Great Leaders Don't Take Yes for an Answer.   Enjoy!

Monday, August 05, 2013

Employee Recognition: The Yum Brands Way

Fortune has a feature article this week about David Novak, the CEO of Yum Brands.  The article focuses on the leadership development efforts at Yum Brands, with a specific emphasis on the employee recognition program at the firm.  Yum Brands has a lot of fun with employee recognition, but they also take it very seriously.  They know that it's vitally important, and they stress the need for leaders at all levels to recognize the contributions of key employees.  However, they also do it with a smile and a joke - they have fun with it.   Here's an excerpt from the article:

As in all things, the way it's done makes all the difference. Every company offers recognition -- a trophy, a plaque, a ceremonial dinner. It typically accomplishes little, for two big reasons: It happens long after the performance that's being recognized, and it's impersonal. The Yum version is the opposite. Faster is better. "You go into a meeting, and somebody blows you away by something," Novak says. "You get up, go back to your office, get your Yum award out, and you go back and say, 'God, that's so great.' Boom! You give him a recognition award. That's the best recognition of all."
And it must be personal. Every Yum acknowledgement -- a rubber chicken, a cheesehead (used at Pizza Hut), a roof tile -- can be written on, and it must carry a handwritten message. "You want to give away a piece of yourself," says Novak. 

These two attributes are so crucial: it must be immediate and personal.   I would add a third criteria.  Recognition must be about behavior, not just results.  You have to identify the key behaviors that you want to reinforce, and you must recognize the individuals who engage in these activities.  People must understand what you think is important for achieving the broader objectives of the organization.  Moreover, they must know that you not only care about achieving the desired results; you also care about how people about achieving those goals.   

Friday, August 02, 2013

Hiring Unqualified Candidates: Why Do We Make That Mistake?

Samuel A. Swift and Don A. Moore of the University of California at Berkeley, Zachariah S. Sharek of Carnegie Mellon University, and and Francesca Gino of the Harvard Business School have conducted some fascinating new research that might explain why we often make the mistake of hiring someone who isn't as qualified as we think he or she is.  The scholars find that, "Across all our studies, the results suggest that experts take high performance as evidence of high ability and do not sufficiently discount it by the ease with which that performance was achieved."    How does this problem manifest itself?  Imagine that you are looking at a candidate for a sales position who worked in a high-flying business that was growing very rapidly.    You might fail to account for the fact that it is much easier being a sales person in that type of company as opposed to working for a mature company with low organic growth. 

The scholars conducted several experimental studies which showed that people often select candidates who have excelled at easier jobs/tasks over those individuals who may have performed slightly worse at a much more challenging task.   The scholars also looked at actual admissions data for graduate schools of business.   They found that students are at an advantage if they went to an undergraduate institution with a grade inflation problem!  In other words, if you went to a school that gave out easy A's, you have a better shot at getting into a good MBA program; the admissions officers are not doing a good enough job evaluating the difficulty level of various undergraduate programs. 

As a business school professor, I'm saddened that we appear to be rewarding grade inflation.   The study shines a spotlight on an important problem.  The research has much broader implications though; it shows us why many kinds of organizations may make poor hiring decisions. 

Thursday, August 01, 2013

The Invisible Gorilla

Many of you have seen the video posted below.    The exercise is simple.    You ask people to count the number of passes made by people in white shirts in this short video.   At the end, you ask people whether they saw the person in the gorilla suit appear in the video.   Many people do not notice the gorilla!  They are too focused on the task that has been given to them; they are busy counting passes.  Scholars describe this problem as "inattentional blindness."  Basically, we see what we expect to see.  We expect to see people passing a ball, and we don't expect to see a person in a gorilla suit. 

Now we have an interesting new study that's a simple twist on this infamous gorilla video.  Harvard Medical School researchers Trafton Drew, Melissa L.-H. Võ, and Jeremy M. Wolfe decided to examine whether experts engaged in a serious task are "less blind" than the usual naive observer conducting a mundane task such as counting passes of a ball.   Here's what the scholars report about their study: 

We asked 24 radiologists to perform a familiar lung-nodule detection task. A gorilla, 48 times the size of the average nodule, was inserted in the last case that was presented. Eighty-three percent of the radiologists did not see the gorilla. Eye tracking revealed that the majority of those who missed the gorilla looked directly at its location. Thus, even expert searchers, operating in their domain of expertise, are vulnerable to inattentional blindness.