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16 января, 15:59

Why an Activist Hedge Fund Cares Whether Apple’s Devices Are Bad for Kids

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Tim Ellis/Getty Images On January 6, 2017, JANA Partners, a New York–based activist hedge fund, and the California State Teachers’ Retirement System (CalSTRS) sent a letter to Apple’s board of directors that may change the future of activist investing. Citing a substantial body of expert research, the letter stated, “We believe there is a clear need for Apple to offer parents more choices and tools to help them ensure that young consumers are using your products in an optimal manner.” Overuse of iPhones by children and teenagers, the letter pointed out, has been linked to lack of attention in the classroom, difficulty in empathizing with others, depression, sleep deprivation, and a higher risk of suicide. Jana and CalSTRS together own $2 billion in Apple stock, so it’s no surprise that the letter received worldwide attention after it was publicized by the Wall Street Journal. What was surprising, however, was the unlikely partnership between JANA and CalSTRS. The term “activist hedge fund” connotes to many a “corporate raider” who creates short-term profits at the expense of other stakeholders and long-term investors. But CalSTRS is one of the world’s leading asset owners on the importance of integrating environmental, social, and governance (ESG) issues into investment decisions — investing as a way of maximizing returns while making the world a better place — so why would it be interested in partnering with an activist hedge fund? The truth is that the worlds of activism and impact investing are converging much more swiftly than most people realize — and this union holds enormous promise for those who wish to see the creation of capital markets that support sustainable economic development. JANA is perhaps most public among activist investors about this shift, having recently announced that it is raising an impact fund to extend its Apple campaign to other companies with the help of an influential advisory board that includes Sister Patricia A. Daly, OP; Sting; Trudie Styler; and myself. But it is reportedly not alone. How is it that sharp-toothed activists are becoming advocates of long-term sustainable investing? A main explanation is that, as always, they are following the money. The market size for responsible investment is large and growing, with some of the largest asset managers like BlackRock, State Street Global Advisors, and Vanguard responding to demand by opening ESG-themed funds in recent years. According to US SIF, at the end of 2018 there was $8.72 trillion in sustainable and impact investing strategies, representing one out of every five dollars being professionally managed. BlackRock has gone even further. In a letter this week, CEO Larry Fink has announced that corporations “need to contribute to society” as well as be profitable if they want to retain BlackRock’s support as a shareholder — often one of their largest ones. But it’s also true that many activists are not as short-term as many assume them to be. Despite their reputation as slash-and-burn financial engineers, activists are actually no strangers to seeking returns from genuine, long-term value creation. Empirical research, such as the article “The Long-Term Effects of Hedge Fund Activism,” by Lucian A. Bebchuk, Alon Brav, and Wei Jiang, shows that in contrast to prevailing beliefs, the long-term effects of activist hedge funds are positive rather than negative. In a study of 2,000 activist hedge fund interventions over the period 1994 to 2007, where performance was tracked for five years after the intervention, they concluded: “We find no evidence that interventions, including the investment-limiting and adversarial interventions that are especially resisted by opponents, are followed in the long term by declines in operating performance. Indeed, we find evidence that such interventions are followed by long-term improvements, rather than declines, in performance.” Thus, the issue isn’t one of time frames per se. Rather, it’s the dawning recognition of the activist hedge fund community that material environmental and social factors are value-relevant in the time frames in which they are already operating. This is true from both a downside risk and upside opportunity perspective — both of which exist at Apple. JANA and CalSTRS have recommended to Apple that it form an expert committee to oversee research on this issue, help develop new tools and options to control overuse of the iPhone, educate consumers, and report on its progress. JANA is doing this because it thinks the business decision is right for Apple and will create value for its shareholders in the long term. It’s as simple as that. It’s difficult to describe how excited I feel about the prospect of an activist hedge fund pushing an ESG agenda in such a public way. It’s like Nixon going to China. If the hard-nosed activist hedge fund community thinks ESG is important, what more is there to say to convert skeptical managers, investors, and policy makers? This is a game changer. Big asset owners, like CalSTRS, have been doing engagement for years because they recognize that in order to earn the long-term returns they need for their beneficiaries, their portfolio companies have to take their material ESG issues into account. What firms like JANA bring to the table is a very sophisticated process for identifying undervalued companies and increasing their value by improving their performance — now across a broader range of dimensions. They also know how to mobilize the broader investment community to support the changes they want to see. Is this trend going to last? I hope so. What I can say is that JANA is deeply committed to using ESG to create long-term value for its investors. I wouldn’t have signed on to its advisory board if I didn’t believe this to be the case. If at least some of the others are equally serious, we are on the verge of a major paradigm shift in the world of investing. Even today the corporate community is skeptical about how much investors really care about ESG integration and impact. When an activist hedge fund comes knocking on their door, they’ll know that their environmental and social impact is as important as their financial results — because the latter follows from the former.

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16 января, 15:00

How Customer Service Can Turn Angry Customers into Loyal Ones

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hbr staff/csa images/Getty Images Good customer service seems like common sense for businesses. But how valuable is it really? Until now, this has not been rigorously quantified across different companies. Businesses are understandably reluctant to share their CRM and sales data, and most research in this field has been based on surveys. But as more Americans seek customer service online, social media offers a better platform for analyzing interactions between service reps and customers. Using data from Twitter (where one of us works), we designed an experiment to study customer service interactions in two industries that generate a significant number of customer service complaints: airlines and wireless carriers. We found that prompt and personal customer service does indeed pay off —  customers remember good and bad customer service experiences, and they’re willing to reward companies that treat them well. We identified more than 400,000 customer service-related tweets sent to the top five major airlines (American, Delta, JetBlue, Southwest, and United) and top four wireless carriers (AT&T, Sprint, T-Mobile, Verizon) in the U.S. from March 2015 to April 2016. Our sample of tweets was comprehensive, including complaints, questions, and comments. Since all tweets are public, we could review the entire conversation between the customer and the customer service agent (except direct messages) and code the interaction for attributes such as customer sentiment and tone (e.g., Is the interaction praise or scorn? Is the customer happy or angry?) We then contacted these customers on Twitter, up to six months after they tweeted at the companies, and invited them to take a brief survey. Without providing a reason for the survey, we asked them to participate in a common market-research exercise called conjoint analysis to see if their customer service experiences affected how they valued the brands. For example, for customers who had tweeted at airlines, the conjoint asked them to imagine buying a ticket for a two-hour non-stop flight. They had to choose between several combinations or “offers” that varied across dimensions such as airline, seat type, on-time arrival rate, and fare — similar to how customers would shop for fares on sites like Kayak or Expedia. We offered a similar exercise for wireless service customers. From the conjoint exercise, we could discern what value, in dollar terms, customers attributed to their preferred airline. On Twitter, 1,877 users completed the conjoint exercises – 673 of them had received responses from companies, 375 received no response, and 829 had no customer service interaction and served as our control group for baseline willingness to pay. We then tested our hypothesis: do customers who had a positive interaction with a brand’s customer service representative value that brand more? Or in management parlance, when a brand provides better customer service, will customers reward that brand with greater loyalty or pay a price premium? Good Customer Service Matters on All Platforms Customers who had interacted with a brand’s customer service representative on Twitter were significantly more likely to pay more for the brand, or choose the brand more often from a comparably-priced consideration set, compared to our control group of customers who had no such interaction. On average, across all tweets and regardless of whether the customer used a negative, neutral, or positive tone, we found customers who received any kind of response to their tweet were willing to pay almost $9 more for a ticket on that airline in the future. This extra $9 can be thought of as incremental brand value the airline has gained in the customer’s mind. In other words, all else being equal, a customer would be willing to buy a ticket from the airline even if the airline cost $9 more than its competitors. We found similar results for wireless carriers. Customers who received any kind of response to their tweet were willing to pay $8 more, on average, for a monthly wireless plan from that carrier in the future, compared to the control group. Unlike airline tickets, wireless plans are monthly and recurring, so an $8 per month higher premium can lead to a significant revenue boost. We also surveyed customers on their likelihood to recommend the brand to others, so we could derive a Net Promoter Score (NPS), a common measure of customer loyalty. We found that receiving a response improved NPS by 37 points for airlines and 59 points for wireless carriers, consistent with our findings from the conjoint exercise. (This bump is significant considering NPS scores range from -100 to 100.) In addition, these effects held up for at least six months after the interaction, suggesting some permanence to the positive impact of good service. Respond to Customers, Even If They’re Upset The connection between good customer service and brand loyalty may seem intuitive. What’s more surprising is that seeking to engage an angry or confrontational customer can also have a positive effect on brands. Handling angry customers is a daily task for any customer service rep. While most companies do earnestly try to solve customer problems, inevitably there are some problems that cannot ever be fixed — the canceled flight that causes you to miss your sister’s wedding, or the dropped calls during your critical business negotiation. In many cases, there is little a company can do to redress a customer’s specific grievance. But sometimes customers are just looking for a little empathy. When customers used a negative or even an angry tone in their initial tweet to a brand’s customer service team, we saw that the best approach was to respond to negative comments instead of ignoring them. In our study, simply receiving a response — any response at all — increased the customer’s willingness to pay later, even in cases where customers were aggrieved. While successfully resolving an issue created more brand value (about $6 for our airline sample), responding without providing a resolution was still worth about $2 in added brand value for airlines. We found even larger effects for wireless carriers. For customers who received no response, we found no statistically significant change in their willingness to pay. But, customers who got any response to their negative tweet were on average willing to pay $7 per month more for a wireless plan from that company than customers who got no response. For cases where the issue was resolved, they were willing to pay $8 more; if the agent was unable to resolve the issue, they were still willing to pay $6 more. The lesson for managers is to reply to every customer service comment online, even the proverbial “I’ll never fly your airline again!” A mere acknowledgement of the customer’s problem can defuse initial frustration and put the customer back on the road to loyalty. Instead of the customer seeing the company as the enemy, a sympathetic response can reorient the situation so that the customer now feels that the company is on his or her side. That being said, don’t ignore your happiest customers. We found the highest increases in willingness to pay actually came when businesses responded to customers who tweeted a positive comment at the company. Receiving a response to a positive comment generated $28 more for a future airline ticket and $12 more per month for wireless plans. Customers who say good things about your business are your advocates and your brand loyalists. You can demonstrate that you value them by acknowledging them and thanking them for their loyalty. Good Service Happens Fast As important as it is to respond to every customer issue, it is even more important to respond quickly. We observed that a brand can capture substantially more value by replying right away. When an airline responded to a customer’s tweet in five minutes or less, that customer was willing to pay almost $20 more for a ticket on that airline in future months. Similarly, wireless customers were willing to pay a whopping $17 more per month for a phone plan when they received a reply within five minutes.   Customer service representatives need to move fast to capitalize on these opportunities. For airlines, we found that after 20 minutes had elapsed, customers were only willing to pay $3 more, a decrease of 85% in value compared to customers who received responses in five minutes or less. After an hour, customers were only willing to pay $2 more. We found that the median time airlines took to respond to the tweets in our sample was about 20 minutes, meaning that at least half of all airlines were leaving significant money on the table. While we were only able to measure the response time for interactions on Twitter, we believe fast responses can generate goodwill in all customer service channels. In our study, a response time of five minutes or less meant the airline ranked in the fastest 20% of response times in our data. We expect to see similar effects, regardless of channel, as long as the company is responding faster than customer expectations. (The average customer expects companies to help them within 5 minutes by phone, within 1 hour by social media, and between 1-24 hours for email.) These patterns also held even if the customer’s complaint was unresolved, meaning that even a short acknowledgement of the customer’s issue and reassurance that the agent is looking into it can pay off. This is consistent with other psychology research showing that we dislike the uncertainty of making a request to someone and hearing nothing back. Customers Are People, So Be Personal Another insight from our research is the value of making a personal connection with a customer requesting support. Personalizing a message by typing a few extra characters can make a huge difference. Customers who received an unsigned response showed no detectable increase in willingness to pay compared to the general population. But, when a customer service agent added their name or initials in their first reply to a customer, we observed that their willingness to pay increased by $14 for a future flight on that airline compared to those who received an unsigned response. Similarly, in the wireless industry, customers were willing to pay $3 more for a monthly plan if the agent signed their name compared to those who received an unsigned response. When agents sign their name in their tweets or posts, it humanizes them and helps customers feel that the company, or at least someone within the company, is on their side. Customers are also likely to feel more comfortable following up about an issue later if they have the name of the employee who helped them. As consumers turn to a wider array of channels for help and expect faster responses, it has become more challenging to provide customer service. Bottom-line pressure restricts what companies are able to provide without breaking the bank. Our research shows that customer service that shows empathy can drive a lot of value, and there are some simple best practices to turn aggrieved customers into loyal advocates. First, surprise customers by responding quickly, so that they feel someone is watching out for them. Even a simple acknowledgement to buy time to diagnose the customer’s issue can drive future revenue. Second, don’t shy away from responding to unhappy customers, even if you can’t immediately resolve their issue. Finally, even small gestures such as having agents sign their names or initials creates immediate value for your business.

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16 января, 13:05

How Georgia State University Used an Algorithm to Help Students Navigate the Road to College

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Yenpitsu Nemoto/Getty Images As AI continues to develop, a major test of its potential will be whether it can replace human judgment in individualized, complex ways. At Georgia State University, we investigated a test case where AI assisted high school students in their transition to college, helping them to navigate the many twists and turns along the way. From the perspective of an AI system, the college transition provides intriguing challenges and opportunities. A successful system must cope with individual idiosyncrasies and varied needs. For instance, after acceptance into college, students must navigate a host of well-defined but challenging tasks: completing financial aid applications, submitting a final high school transcript, obtaining immunizations, accepting student loans, and paying tuition, among others. Fail to support students on some of these tasks and many of them — particularly those from low-income backgrounds or those who would be the first in their families to attend college — may succumb to summer melt, the phenomenon where students who intend to go to college fail to matriculate. At the same time, providing generic outreach to all students — including those who have already completed these tasks or feel confident that they know what they need to do — risks alienating a subset of students. In addition, outreach to students who are on-track may inadvertently confuse them or lead them to opt out of the support system before they might actually need it. Previous efforts to address summer melt have included individual counselor outreach or automated text-message outreach. Both strategies allowed students to communicate with advisors one-on-one and significantly improved on-time college enrollment. However, scaling these strategies requires significant staffing of human counselors to address the specific questions and personal needs of each student. Insight Center The Risks and Rewards of AI Sponsored by SAS Assessing the opportunities and the potential pitfalls. Artificial intelligence (AI) could dramatically change the viability of providing students with outreach and support if it can be tailored to address their personal needs. In collaboration with Georgia State University (GSU), we tested whether “Pounce,” a conversational AI system built by AdmitHub and named for the GSU mascot, could efficiently support would-be college freshmen with their transition to college. Pounce features two key innovations. First, the system integrates university data on students’ progress with required pre-matriculation tasks. Thus, rather than providing generic suggestions, Pounce matches the text-based outreach that students receive to the tasks on which data indicates they need to make progress and therefore may need help. For example, only students who did not complete the FAFSA would receive outreach from Pounce. These students could learn about the importance of applying for financial aid and receive step-by-step guidance through the process if they chose to.  Those with completed FAFSA forms would never be bothered with these messages. In this way, the system provides students with individualized outreach. Second, the Pounce system leverages artificial intelligence to handle an ever-growing set of student issues, challenges, and questions (e.g., When is orientation? Can I have a car on campus?  Where do I find a work-study job?). The system can be accessed by students on their own schedule 24/7.  It can efficiently scale to reach large numbers of students, and it gets smarter over time. Through an experimental study, we found that students planning to go to GSU who received Pounce outreach completed their required pre-matriculation tasks and enrolled on-time at significantly higher rates than those who received GSU’s standard outreach. Pounce reduced GSU’s summer melt by 21%. These impacts mirror previous summer melt interventions but with far fewer staff. Beyond the success of this trial at GSU, the work has broader implications for the use of AI within institutions. First, AI can change an organization’s relationship with its employees, clients, or customers from reactive to proactive. Summer melt represents a process that most colleges and universities address reactively.  Their data systems note whenever students have lost track of one of the countless required bureaucratic steps and deadlines: paying bills, registering for classes, applying for financial aid, and on and on. Schools know which students have completed which requirements, but lack knowledge about what fiscal, behavioral, or informational barriers block further progress. An AI system can figure out which students need a simple reminder, further identify who needs detailed instructions, and provide a mechanism for others to reach out with questions.  Thus, a thoughtfully designed AI system can allow an institution to become proactive instead of waiting for problems to arise. For Pounce, or any other AI system designed for human idiosyncrasies, handling this range of needs is essential. Second, somewhat paradoxically, we found that AI-enabled communication systems can also make students more proactive. As Pounce pinged students with questions and reminders, the outreach primed students to think of and ask other questions that had been on their minds. Thus, the system provided students with a nudge to ask whatever they may have been worrying about and opened a new channel of communication. A key goal for an educational system — and most companies — is encouraging students (or employees) to take proactive steps to solve small challenges before they become big problems.  Thus, a collateral benefit of support from Pounce was that as students were primed about certain tasks, they became more agentic in tackling other important tasks to prepare themselves for college. Third, institutions that are savvy about using individualized data proactively and who create more proactive constituents can pursue core goals more effectively and efficiently.  When institutions reach out to their employees, clients, and customers to make them better at completing tasks essential to their roles, the improved performance, in turn, can help the institution. Pounce helped GSU students manage a number of distinct tasks more successfully. This support boosted student enrollment (and therefore revenue) for the institution and likely engendered goodwill among students — who we suspect were happier to receive support to hit deadlines than to be assessed penalties for missing them.  By spending less time and effort getting students matriculated at GSU, Pounce freed the institution’s and the students’ resources to enable greater focus on teaching and learning goals. Combining data integration with artificial intelligence in the form of virtual assistants, such as Pounce, holds promise for sectors like education that rely heavily on communication. Of students who completed high school in 2014, for example, 68% — some two million individuals — transitioned directly to postsecondary education. The matriculation process and its corresponding challenges remain reasonably consistent over time. Thus, artificially intelligent systems such as Pounce have the potential to provide these transitioning students with personalized support to stay on track while not burdening universities with excessive costs or demands for staff time. Rather, this system minimizes the need for staff to respond to common questions, so that they can instead devote their time more fully to those issues that only humans can solve. Further, AI systems that can be responsive to human changes in wants, needs, and feelings show substantial promise well beyond higher education.  Just about any company with an on-boarding process to orient new employees will face similar tasks in which some employees need assistance while others feel confident that they can manage on their own.  Businesses which have customers or clients with idiosyncratic needs may similarly benefit from AI systems that can tailor outreach and respond to incoming queries.  In such cases, individualized, proactive outreach to support employees or clients is likely to make these constituents more proactive in ensuring that their own needs and questions are addressed.  Thus, the foundation for a proactive feedback loop will be established — a genuinely intelligent move for any institution.

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15 января, 15:00

How the Best Restaurants in the World Balance Innovation and Consistency

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pchyburrs/Getty Images The restaurant industry is notorious for being competitive, risky, and low-margin. This is no less true for the world’s most acclaimed high-end restaurants. Despite being able to charge hundreds of dollars for a meal and being fully booked months in advance, top restaurants often still have a hard time turning a profit. And they face an even greater challenge: maintaining flawless consistency, while simultaneously being innovative and cutting-edge. While cooking is seen as creative, high-end cooking is mainly about constant, rigorous repetition, in a highly controlled and hierarchical environment. To receive three Michelin stars – the highest rating given by the prestigious Michelin Guide – restaurants must deliver a consistently flawless experience over many visits. This means achieving precise standardization and strong quality control. For example, at The Fat Duck in the UK (which has had three Michelin stars since 2004, except in 2016 when it closed for refurbishment, and where I worked on the innovation side), cooking temperatures are systematically controlled to 0.1°C, and most recipes are specified with up to 40 steps for a single component on a plate. Each cook is highly trained and selectively recruited, yet he or she will only be tasked with producing a few components, and will practice hundreds of times under direct supervision before achieving the necessary level of craftsmanship. The preparations, produced by small teams or individual cooks, are progressively assembled, with sous-chefs (akin to middle managers) controlling the quality at every step. Before the final dishes are served, the head chef personally tastes a sample from each batch, maintaining control over every single aspect. However, this kind of rigorous repetition would seem to stymie innovation – by limiting opportunities to learn from mistakes, to quickly prototype, or to search for new ideas – and innovation is another critical dimension for success in the high-end restaurant world. For instance, it’s a main consideration for the similarly influential 50 Best Restaurants of the World list, which occasionally leads it to rewards different restaurants than Michelin. For example, Noma obtained the top spot in the 50 Best for its reinvention of Nordic Cuisine, while it was only granted two Michelin stars; and Paul Bocuse’s restaurant, the oldest restaurant with three Michelin stars (keeping the ranking for over 40 years), has served virtually the same menu for decades and has never made the 50 Best list. Of course, consistency and creativity aren’t mutually exclusive. A handful of extraordinary restaurants have managed to deliver both the flawless standards of three Michelin stars and the innovation demanded by the 50 Best list – and they’ve managed to leverage this acclaim to achieve growth. In my work studying and consulting with innovative companies, I’ve found that this balance is best achieved through dedicated time and space for research and experimentation, as well as a thorough process for both iterating on and standardizing new inventions. Let’s consider an example. The first restaurant to achieve both lists was El Bulli in Spain. With only one Michelin star in 1987, the restaurant decided to try something new. Since the business was particularly slow during the winter, its owners, Ferran Adrian and Juli Soler, decided to close shop 2-5 months a year to travel and search for new dish ideas. In 1990 they gained a second Michelin Star, and in 1994, they became the first high-end restaurant to invest in a development team and a lab. Akin to an R&D facility for a large restaurant chain or fast-moving consumer goods (FMCG) brand, their lab hosted a small team of chefs, and occasionally other professionals, such as food scientists, designers, or engineers, in a mixed kitchen and office space. Unlike test kitchens of large chains or FMCG products, the team would work in R&D during the winter and then resume restaurant operations during the summer. And instead of concentrating on cost reduction, shelf life, or replicability, they would focus on the creative process and the customer’s experience. Three years later, El Bulli rose to three Michelin Stars, and when the first edition of the 50 Best guide was released in 2002, they earned the top spot, positioning Spain as one of the main gastronomic destinations in the world. The company grew through consulting for other companies, opening new business lines (e.g. books and cooking gadgets), developing brand partnerships, and opening more restaurants. Though the main restaurant closed in 2011, they subsequently reopened it as the ElBulli Foundation (a sort of think tank), while the other restaurants and business lines are still operating today. Other restaurants, like the Fat Duck and El Celler de Can Roca in Spain, also set up fully fledged test kitchens before attaining the top ranking in both guides. Like at El Bulli, the chefs working in these labs divide their time between the restaurant operation and R&D projects aimed at improving the customer experience. The projects range from developing new techniques and ingredients to designing final dishes and products. Some labs even partnered with universities to carry out research projects and explore subjects as varied as sensory perception, sustainability, narrative theory, and nostalgia. For example, a popular dish by The Fat Duck Group called The Meat Fruit (a surprisingly realistic looking “mandarin,” made of delicate mandarin jelly and chicken liver pate) was inspired by a recipe from the 15th century that was researched by historians at Hampton Court. And a seafood dish called Sound of the Sea (enhanced by sea-like sounds coming from an iPod nano hidden inside a seashell) came from collaborations between the lab and an experimental psychology laboratory in Oxford called The Crossmodal Research Laboratory. Although these efforts were expensive, the labs provided the capacity for numerous projects that generated revenue, like The Fat Duck’s partnership with Waitrose (a UK-based supermarket), and helped attract a wide community of collaborators that led to numerous innovations. But while a dedicated lab expands a restaurant’s capacity for R&D, innovation more importantly has to be embedded in the DNA of the organization. High-end restaurants that cannot afford a team and space solely devoted to R&D still make innovation a key value alongside consistency. Whether or not they have a lab, all the top spots in both the Michelin and 50 Best list implement processes to encourage creativity and learning beyond the leadership or lab team, as well as processes to generate, prioritize, refine, and standardize ideas. At The Fat Duck, a conceptual dish is developed each month by one of the restaurant cooks for the whole team to taste, while Italian restaurant Osteria Francescana (ranked #1 in the 50 Best in 2016 and with 3 Michelin Stars since 2012) holds frequent brainstorms and feedback sessions with the head chef and general kitchen staff. This collective culture of creativity multiplies the pool of ideas and softens resistance to new products and processes being adopted. Then after the ideas are collected, restaurants screen and prioritize them for development. Let’s look at how the Fat Duck Group (their parent company) does this. First, the company’s leadership agrees on the core concept for each of its business units (the restaurants and other commercial lines). Then a team – generally composed of the CEO, the company’s head chef, the head of R&D, and the head of the unit – generates a series of loose ideas that could become products or features of each customer experience. These ideas are then divided and assigned to the R&D team, the restaurant chefs for prototyping and testing, and in the case of consumer electronics (cooking gadgets), jointly to the business partner’s R&D and the internal R&D. This isn’t strictly top-down. The members of the R&D team also explore pet projects according to loose “areas of interests,” occasionally getting help from other employees. The company’s leaders know what these areas of interest are, but they only see specific projects if the results are promising. While many projects won’t reach a final customer, they are carefully logged on a searchable data base that is frequently used to improve and accelerate assigned projects. All the projects follow a specific development process, alternating between collective ideation or feedback and focused work by a small team. For restaurant dishes, the development team will quickly prototype and iterate through numerous versions of the dish and its components, either in the lab or if a lab is not available, in the main kitchen during slow hours. The trials can go over for months as numerous variations are tested in a race against seasonal ingredients. Once the results start to approach a finished product, the team will seek input from senior and junior chefs, as well as sommeliers, waiters, and other staff. After a few cycles of improvement, the project team will hand the recipes to the line cooks to prepare. At this stage, the objective is not to hand down a finished recipe and test the line cook capacity to produce it. Rather, the goal is to test the recipe’s written instructions. Both the line cook and the development team taste the result and, when problems are spotted, work together to improve the recipe until the results are reliable, consistent, and delicious. The head chef oversees each project from the early stages, and decides when to serve a first taste to regular customers for further feedback. This process reduces cultural clashes between departments, improves the quality of outputs, and bridges the gap between a raw idea and consistently producing a finished product at scale. The most highly acclaimed restaurants imbed creativity and learning across the organization by creating spaces and processes for both collective input and focused development. They show that a culture of precision and attention to detail can co-exist with constant re-invention, and by leveraging this core competence to achieve prestigious rankings, partnerships, and associated businesses, generate growth.

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15 января, 14:00

How to Create Executive Team Norms — and Make Them Stick

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Stacey Oldham/Getty Images Have you ever been on an executive team where things just clicked? You had a common goal, communication flowed easily, and everyone was willing to put in the long hours for a final push. Looking back, you wish you could replicate and carry forward that same secret sauce on every team, especially the teams that you struggle with. You know the ones. The groups where everything is harder, where you revisit decisions, move slowly, are confused about the direction, and dread the politics. While many factors contribute to the best and worst teams, one practice has consistently helped my clients: having an agreed-upon set of group norms and, more importantly, a set of practical steps to follow those norms. Group norms are a set of agreements about how members will work with each other and how the group will work overall. These agreed-upon behaviors allow the team to increase its collective performance through healthy debate and clarity of purpose and roles. You and Your Team Series Building Good Habits Break Bad Habits with a Simple Checklist Sabina Nawaz Make Learning a Lifelong Habit John Coleman Why New Personal Productivity Efforts Don’t Stick Maura Thomas and Shawn Thomas Having a set of norms that an executive team consistently follows helps team members be clearer about each other’s intentions, increases trust, saves time, decreases backbiting and politics, and sets a clear operational compass for the rest of the organization. When employees observe their senior executives behaving in intentional, transparent, and consistent ways, they’re inspired to follow them and adopt those norms themselves. To create your own executive team norms and put them into practice, follow these five steps: Identify successful norms based on your past experience. Think back to a team where things worked well and then identify one to three norms that contributed to that success. When I ask executives to do this, they often say that a consistent cadence of communication or being fully present in conversations helped things work smoothly. Break down the norms into behaviors. Once you have an abstract list of norms, turn them into measurable behaviors. For example, one norm might be to encourage equal participation in meetings. As a team, ask yourselves what equal participation in meetings looks like. A behavior then might be that for key issues, you will go around the room and solicit input from everyone, starting with the person who’s spoken the least in that day’s meeting. Commit to five norms or fewer. Prioritize what you want to tackle first. It’s OK to start with just one norm, but don’t take on more than five at once. Focusing on fewer norms increases your chances of remembering them and practicing them regularly. Create a recurring plan. Too often executive teams spend time at an offsite coming up with well-crafted norms, only to fail to transfer them to the boardroom on Monday morning. Create a plan with owners and time lines for how you will follow through on each norm. Create a system of mutual accountability. Discuss how you will hold each other accountable if you don’t practice the norms you’ve agreed to. What will you do if, after repeated check-ins, there’s still no progress? What will you do if all but one of you follows through? What are other scenarios where things can stall or go off the rails, and how will you have the conversation to hold each other accountable? One team, for example, restricted the use of devices during their executive team meetings. If someone got distracted by their phone, they had to throw $5 into the “norm bucket.” At the end of the year, the team went out for drinks and donated the rest of the money to charity. In this case, creating a system to police a new behavior made it more comfortable — and even fun — to call each other out. To see this process in action, consider the executive team for a services company I’ll call Acme. During a retreat, the team outlined several challenges in how they worked together. One of these challenges was that their weekly executive team meetings had three dominant personalities who took up most of the airtime in discussions. The remaining six team members didn’t say much and were often interrupted when they did speak. Meetings failed to cover all agenda items and frequently ran over time. What’s more, the talkative executives assumed that silence from their peers indicated agreement and were later surprised when decisions weren’t executed smoothly. The quieter executives were frustrated that their more loquacious colleagues didn’t seek out their opinions. Actions took longer to execute and came with significant confusion among the direct reports of the executive team. To tackle this issue, one of the more talkative executives suggested they adopt a norm that would encourage equal participation, so that everyone could contribute more evenly. Once the norm was identified, the team brainstormed behaviors that would allow them to put it into action. Here’s the list they came up with: One business day before a meeting, the agenda owner provides brief background or possible outcomes, so attendees are clear about what will be discussed and have time to process the agenda items before the meeting. The owner of agenda items and decisions asks each team member if they have input during the meeting, even if just for concurrence. All team members must say something, even if it’s simply “agree.” Every team member is responsible for soliciting input from other attendees during meetings. Partway through a meeting, the meeting owner will directly ask for different points of view. The meeting owner deliberately changes the order of who speaks in each meeting to give different people a chance to voice their opinions first or listen first to other’s points of view. When I talked with each member of Acme’s executive team nine months after the retreat, they all mentioned that this norm was working well. Not only were they following the behaviors they’d outlined, they were also regularly checking in on progress against this norm. By increasing participation from each member of the team, decisions remained stable from meeting to meeting, people were clear on what others thought about contentious topics, and new ideas were benefiting from diverse and multiple viewpoints. Consciously agreeing on how you will work together and sticking to that agreement is essential to having a high-performing team — especially at the executive level. Not only will you create a high-functioning team capable of achieving extraordinary results, but you will also model creating such teams for the rest of your organization.

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15 января, 13:05

The 5 Things Your AI Unit Needs to Do

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Bogdan Dreava/EyeEm/Getty Images Not a day goes by without the announcement of the appointment of a new VP of Artificial Intelligence (AI), a Chief Data Scientist, or a Director of AI Research. While the enthusiasm is undeniable, the reality is that AI remains an early-stage technology application. The potential is vast, but how managers cut through the AI hyperbole to use its power to deliver growth? In our consulting work, we often encounter managers who struggle to convert AI experiments into strategic programs which can then be implemented. Michael Stern (not his real name), for instance, is the Head of Digital for a German Mittelstand office equipment company. Michael is used to starting new projects in emerging areas, but feels unable to fully understand what can AI can do for his business. He started a few experiments using IBM Watson, and these produced some clear, small tactical gains. Now Michael is stuck on how to proceed further. How can he create cross-functional teams where data experts work with product teams? And how will they pick project ideas that produce real ROI? Michael wonders if his firm even knows what new business models can be explored with their existing datasets — let alone which new ones might be made possible by AI. Insight Center The Risks and Rewards of AI Sponsored by SAS Assessing the opportunities and the potential pitfalls. Michael is not alone.  As more and more companies invest in AI-driven units, many newly appointed managers face these challenges – especially in companies with little or no previous experience with cognitive technologies. Part of the trouble: in many companies, the role of these teams is undefined. Very little research has been done to design the mission and scope of these new units. At the European Center for Strategic Innovation (ECSI), we examined numerous corporate AI initiatives among large organizations, and identified five key roles that can help AI units to develop the right mission and scope of work to succeed. 1. Scouting AI technology, applications, and partners. This role is about setting up a core team of “AI sensors” in charge of monitoring new trends, identifying disruptive technologies, and networking with innovative players — mainly startups. The automobile-parts supplier Bosch and the tech and engineering powerhouse Siemens are two prime examples of this. With a planned investment of $300 million, Bosch has established three AI corporate centers focused on IoT and other AI-related fields in Germany, India, and Palo Alto. Siemens, similarly, has included AI in the company’s list of innovation fields to be monitored through its network of innovation outposts with offices in California, China, and Germany. 2. Experimenting with AI technology and applications. This role is about understanding through quick, small AI pilots how to develop or adopt cognitive technologies to the company’s business and operational models. Although off-the-shelf AI tools and open-sourced systems are available, they have limited transformational potential compared to customized ones. At Deutsche Telekom, the development of its own AI solutions is an important priority. Instead of buying AI chatbots from vendors, Deutsche Telekom has its own developer teams. With the support of partners, they design, train, and fine-tune AI solutions for the company. Rather than concentrating efforts on a single big win, AI units and teams should embrace a portfolio approach to their experiments. The power of AI should be tested across functions and business areas. There are three types of experiments that are worth paying particular attention to: Experiments in the driver’s seat are typically conducted by the company’s AI unit or internal developer teams. In the last few years, Deutsche Telekom has tested internally three different AI-backed chatbots and virtual assistants to improve the company’s corporate and private customer services. Experiments with others in the driver’s seat involve joining forces with innovative players such as start-ups, research centers, and universities. In general, such experiments are focused on cutting-edge technologies or applications requiring in-depth expertise and skills that companies do not have. This is a common strategy among large organizations: Mercedes-Benz entered a partnership with the Computer Science and AI Lab of MIT; Associated Press collaborated with Automated Insight, a specialized AI firm; Deutsche Telekom partnered with the German Research Centre for AI, called DFKI. Experiments by learning from others are common among companies interested in pioneering AI technology and applications, but too premature for their industry. Observing others translates into funding ventures or start-ups innovating at the frontier of AI. This is the case at German insurance company Allianz, which funded Europe’s first global AI equity fund to position itself as a “pioneer in AI investments.” 3. Supporting business units in applying AI technology. This role is about building internal capabilities through a specialized network of AI experts who can support business units in the integration and application of AI tools and solutions (from basic data visualization and chatbots to the automation of entire processes like claims management). The success of AI applications lies not in the technology per se, but in the ability of a company to align it with its business and operational models. The Data and AI Lab is one of the most visible BNP Paribas’ AI efforts. The Lab is responsible for the development of AI tools that can improve the internal processes. At BNP Paribas, the AI team is in charge of accompanying and supporting business units all along the way, from the identification of potential applications to the experimentation and fine-tuning. It’s essential that these labs be tightly integrated into the organization, not in a far-off lab. Constance Chalchat, Head of Change Management at BNP Paribas says, “Data scientist teams need to work in close partnership with both the business and IT.” 4. Getting the entire organization to understand AI. This role is about the ability of the AI team to educate the organization on the opportunity to harness the power of AI. Why? Because AI is ultimately a tool. Organizations need to build solid foundations that enable people to actually use and secure value from AI technology. As passion for AI is rising to the top of large organizations, this applies also to the C-suite and Board. Executives need support to cut through the complexity of AI-driven discussions and find ways to extract value. Embedding AI in the company’s culture and core skills set can be done at two levels. First, internal communication initiatives can help raising awareness and acceptance of AI technologies, in particular those with a high transformative potential, while creating a common AI language and culture. Second, targeted education efforts allow building basic, standard capabilities of people, who are not AI experts in the organization. AirBnB is a prime example of this. By setting up an internal Data University, AirBnB is teaching employees data science with the goal of making the transition to a more AI-aware organization easier and faster. 5. Attracting and retaining talent. This role is about addressing the AI skills gap. A dedicated AI unit should work in close cooperation with the HR department to identify the right skills and capabilities required, and define strategies for talent retention. Companies are currently adopting different AI talent acquisition strategies. Edouard d’Archimbaud, Head of the BNP Paribas Data and AI Lab is gradually expanding his 25-member team. “We’re recruiting around ten people a year […] we’re very careful and only like to hire the right people,” he explained. Other companies have invested more significantly. This is the case of Airbnb that recently “acqui-hired” a team of seven data engineers from Changecoin, a start-up with deep knowledge of blockchain technology. The framework in action Sometimes these newly created AI teams will be investing time and effort in all the five roles. The challenges at other companies can be quite different. Plotting the five roles on spider graphs like the one shown here can help companies figure out where they are currently focused and where they may need to increase or reduce their efforts. They can, for example, compare what they are currently doing with what they should be doing, given their company’s strategic intent and their capability and organizational issues.   Each AI team should design its own spider-graph based on its existing context, goals, and constraints. Companies investing – or planning to invest – in AI units need to think strategically about where to focus their efforts. Winning the AI revolution isn’t about just the technology and the tools, it is about educating and getting your organization ready for the future.  In the same way as Amazon didn’t invent the technology that has made them a corporate titan, companies in the AI-age need to prepare their organization to be data-first in order to stay competitive in the long run. Plotting the five roles can help align the company’s strategic intent with the organizational context and constraints.

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12 января, 16:30

How Working Parents Can Feel Less Overwhelmed and More in Control

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Jeffery Coolidge/Getty Images Revise budget numbers. Parent/teacher conference Wednesday. Edit the marketing overview document. Finish summer camp applications. Give candidate interview feedback to HR. Grocery run — we’re out of everything. Start drafting quarterly forecast. Call the roofer for the estimate. Organize team strategy session. Schedule kids’ flu shots. Get back to Jayesh and Liu on IT plan. Get Tommy ready for math test tomorrow… If you’re a working parent, chances are excellent that at any given time, your to-do list looks like the one above — and that it stretches on, and on, and on — an endless, and eternally growing, list of deliverables. Is it any wonder that research shows that most working parents feel stressed, tired, and rushed? Or that when you look ahead, you feel more than a little overwhelmed? As a responsible person and a hard worker, you know how to dig in and get things done. And since becoming a parent, you’ve tried various strategies to keep the ever-more-intense pace: moving paper to-do lists onto your iPhone, reorganizing your Outlook “Tasks” section, spending more and more time logged into work each evening, cleaning up the endless queue of unread emails, sleeping progressively less each night. Yet you’re still haunted by the nagging sense of not getting enough done, of falling down in some way, of giving things that really matter short shrift — and feeling as if the wheels may come off the bus very, very soon. The problem isn’t in your organizational system or work ethic — it’s in how human brains are wired. It’s normal to feel overwhelmed, with so much to do and so many demands on you. But here’s the good news: There are simple and effective techniques for taming the overwhelmedness — things any working parent can do, starting today, to feel more competent, calm, and in control and to start shrinking that task list permanently. Here are four of the most powerful. Know your end game. Well-run organizations, and good managers within them, have a clear, compelling view of the future. They have a few strategic goals. They set revenue targets annually. They know what results will permit them to say “We succeeded.” With clarity on where they want to go, they have confidence in their decisions and take motivation from what lies ahead. As a working parent: Do you? Most of us working parents are focused on simply getting through the day, which — let’s be real — is daunting. Yet that very determination to hunker down and conquer today’s task list makes working parenthood feel even more overwhelming and relentless. Your task list owns you, rather than the other way around. Over 18 years (or more) of working parenthood, constantly feeling “I have a million things to do today” will be pretty disempowering and exhausting. By identifying the long-term, positive outcome of your working parenthood — by determining a specific picture of future success — you can begin to flip that equation. Knowing that your goal is to “serve as a vice president of this organization, while raising my children to be healthy, financially independent adults” provides a sense of self-determination, confidence, and motivation. You made the decision. The goal is reachable, and you can focus on the tasks that accrue toward it. Even on the busiest or worst of days, you have a fixed point on the horizon you’re moving toward — and you’ll know it when you get there. To be clear: There is no “working parent magic formula” — the definition of success is, and should be, different for everyone. “To lead this company as CEO, while partnering with my spouse to raise healthy, ethical kids” is just as valid as “to become financially successful enough to cover my kids’ full college tuitions — while never missing family dinners.” But by identifying a goal that is personal, positive, and future-framed and that covers what you want from your career and for your children, you move yourself away from feeling so frantic, and toward being in the psychological driver’s seat. Invest your time accordingly. Working parents who have a clear view of what they’re working toward are more able to prune their calendars of commitments that don’t align, and to spend time and energy on the things that matter and that provide real satisfaction. If your goal is “become a partner at this firm, be known as a leader in my local professional community, and raise my kids into well-adjusted adults who remain connected to their religious heritage,” then it’s important to go the extra mile at work, attend industry conferences in your city, and take your kids to Sunday school. But representing your firm at an international conference or attending every single football game isn’t, because they don’t align with your goal. With your working-parent vision clear, try spending spend 10 minutes each Friday doing a “forward calendar audit”: Look over next week’s Outlook planner or to-do list, identify the items that don’t fit with your goals, and commit to delegating or saying no to 5% of them. By making this a habit, over the course of 2018 you will be able to win back a significant amount of your own time, and increase your sense of satisfaction and control. Keep a “got it done” list. In the late 1920s, Russian psychologist Bluma Zeigarnik described what has since become known as the Zeigarnik Effect, which states that people remember, and fixate on, uncompleted or interrupted tasks significantly more than finished ones. It’s why hearing a few seconds of a song on the radio can leave you humming all day, trying to remember how the song ends, and why many TV shows end each episode inconclusively, so you’ll be left obsessing until you see how the plotline resolves. Uncompleted tasks torture us: They take up all our mental space and create enormous emotional noise and tension; when we don’t have closure, we get anxious. And for any working parent, with all the open items we have both at home and at work, that’s a lot of anxiety. Your task list is necessary, but regardless of how and in what form you keep it, it won’t help relieve this stress. If anything, it fuels it. The effective short-circuit is to keep a brief, informal list of completed (rather than undone) items, from both work and home. Write down this year’s finished projects, problems solved, your wins — whatever “win” means for you. Beat our quarterly numbers. Found Sasha a science tutor. Brought in the pharma account. Made it to Diego’s baseball game last week. Then look over this list and remind yourself of how much you’ve done — how much you’ve produced and accomplished, in both spheres. My clients and coachees report that even a single minute spent doing this helps them feel significantly less frantic and overwhelmed. In the words of one of my clients, “It makes me feel like I’m winning.” Make a habit of looking at the list, push out some of that constant “to-do” noise with “already done” confidence, and you’ll find yourself calmer and happier. Schedule a regular power outage. As a working parent, your to-do treadmill will never slow or stop, but you can choose to step off of it, briefly. Sometime in the next two days, set aside 20 minutes in which you turn off all devices, set aside your task list, and do nothing “productive” at all. Your job is simply to spend time in an activity you enjoy with your family. It could be eating dinner together, dancing the Hokey-Pokey with your toddler, or going on a jog with your teenage son. You’re a high-powered person in a high-powered career, but for these 20 minutes, the power is out. Even in such a short window of time, you’ll find that your stress will decrease, and your feeling of “having done something positive for my myself and my family” will go up. And even more important, during a crazy day, you’ll regain a sense of agency: You’ve taken an affirmative decision to do this, and made it happen on your own terms. There’s a reason so many major religions embrace the idea of a Sabbath, and why so many highly successful people make it a habit to take regular vacations: It works. Taking time to withdraw from the world and turn off from work centers us, making us more resilient and more productive. For working parents, finding meaningful flexibility and longer breaks can be hard. But even for the busiest of us, in the most demanding and time-pressed professions, 20 minutes off is doable. Working parenthood is demanding. It requires one person to do two challenging jobs well, and in an always-on world. As in any “extreme” job, some degree of fatigue, stress, and self-doubt — of general overwhelmedness — is inevitable. But the more you can set your own course, make affirmative decisions aligned to it, have confidence in your performance, and enjoy yourself along the way, the better off you, your career, and your family will be — this year and in the ones to follow.

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12 января, 15:00

Robo-Advisers Are Coming to Consulting and Corporate Strategy

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CSA Images/Printstock Collection/Getty Images Does a robot manage your money?  For many of us, the answer is yes. Online and algorithmic investment and financial advice is easy to come by these days, usually under the moniker of “robo-advisor.” Startups such as Wealthfront, Personal Capital, and Betterment launched robo-advisors as industry disruptors, and incumbents, such as Schwab’s (Intelligent Advisor), Vanguard (Personal Advisor Services), Morgan Stanley and BlackRock have joined the fray with their own hybrid machine/advisor solutions. It’s clear that robo-advisors and AI play an important and growing role in the financial services industry, but a question remains.  Will robo-advisors disrupt corporate capital allocation the same way they have personal capital allocation? And, will they shake up the trillion-dollar corporate consulting and advisory industry? Robo-advisors, which were introduced in 2008, are steadily eating up market share from their human counterparts much the way that Amazon and Netflix have taken share from Walmart and Regal Cinemas. A study by Deloitte estimated that “assets under automated management” (including hybrid offerings) in the U.S. will grow to U.S. $5 trillion to U.S. $7 trillion by the year 2025 from about U.S.$300 billion today. This would represent between 10% and 15% of total retail financial assets under management. At the end of 2016, Fitch Ratings estimated that all robo-advisors managed under U.S.$100B in assets, and predicts double-digit growth in assets under management over the next several years. Finally, A.T. Kearney predicts that assets under “robo-management” will total $2.2 trillion by 2021. Insight Center The Risks and Rewards of AI Sponsored by SAS Assessing the opportunities and the potential pitfalls. If AI-guided investing can work for a person, can it also work for a company?  Corporations buy and employ human advice from many wise advisors—consultants, lawyers, investment bankers—in the same fashion that investors did in the past. Corporate strategy is complex, and the advice is expensive.  However, the approaches advisors take are usually data-driven and guided by previous experiences.  This is just the sort of problem that can benefit from machine intelligence. This makes corporate strategy an enormous and untapped prize for “robos” and “AI-enabled” expert advice across the entire enterprise; this market is ripe for disruption much the way the financial investing industry was in 2008. Marketing and sales, manufacturing, recruiting (including people assessment), customer service, and support are all fields that can benefit from artificial intelligence according to McKinsey’s recent research. The reasons for this potential disruption now are many: There is an explosion in the amount of corporate data. In fact, it is doubling every 14 months and it will reach 10.5 ZB by 2020.  This data is both financial (revenues, profits, growth) and non-financial (customer sentiment, employee engagement, marketing effectiveness, product feedback, and partner ecosystems).  The availability of this data creates fertile ground for robos to provide algorithmic insights and recommendations that deliver highly predictive, error-proof, and low-cost advising. Companies are both operators and investors. Research by McKinsey shows that US companies allocate about $650B a year across all their activities—be it financial, physical, human, intellectual, or customer capital. However, they don’t have the tools or practices to best allocate capital, and as a result, 92% of companies allocate their capital the same way year over year. Just like individual investors, most corporations could probably use some help in making wise investment decisions. AI is growing exponentially in enterprises. By almost all accounts, companies at the digital frontier such as Google, Facebook, and Microsoft are investing vast amounts in AI—somewhere between $20 billion and $30 billion alone in 2016. Many established firms—a 2017 Deloitte survey suggested about 20% in the U.S.—are making substantial investments in AI as well. Further, venture capitalists are jumping in with both feet. $4 to $5 billion was invested by VCs in AI in 2016.  Lastly, private equity firms invested another $1 billion to $3 billion. These numbers represent more than three times as much as was invested in 2013. The costs of AI-enabled tools are falling, and availability is rising. Both proprietary tools, like IBM’s Watson, and open-source tools from firms like Google, Microsoft, and Amazon, are widely available. Cloud-based hardware is also increasingly available to any business at low cost. Companies in every industry can benefit from making more data and algorithm-based decisions in areas of internal operations and finance. Analytics are growing in every business function and industry. “Robo-advice” is a straightforward extension of these analytical tools. Each one of us is becoming increasingly more comfortable being advised by robots for everything from what movie to watch to where to put our retirement.  Given the groundwork that has been laid for artificial intelligence in companies, it’s only a matter of time before the $60 billion consulting industry in the U.S. is going to be disrupted by robotic advisors. For those who want to stay ahead of the curve, there are three strategies you can take: Build a pure-play solution: Several robo-advice companies started their offerings with machine-only advice. Their goal was to hit the lowest possible price point, and to appeal to “digital native” customers. However, as the companies providing hybrid advice have grown rapidly, most startups now also offer some level of human advice—typically for a higher fee. Only Wealthfront remains a machine-only robo-advisor. This suggests that corporate robo-advice providers should think carefully before abandoning the human component completely. At Vanguard, the Personal Advisor Services offering features advisors as “investing coaches” who are able to answer investor questions, encourage healthy financial behaviors, and be, in Vanguard’s words, “emotional circuit breakers” to keep investors on their plans. There are likely to be corporate equivalents of these functions. Create your own internal robo-advisory service: Companies could develop their own robotic or semi-robotic advice for key decision domains. This is in fact what cancer hospitals, for example, are attempting to do with IBM Watson in cancer care, and what customers of semi-automated machine learning platforms are doing for highly quantitative decisions (DataRobot is one example; Google’s new AutoML is another). However, developing a robo-advisor only for one’s own internal issues may be more difficult and expensive than many companies are willing to venture into. Further, it is decidedly outside the wheelhouse for most established firms, which brings us to the third option. Partner with or acquire an existing provider: In financial robo-advice, firms that were not first to market are now moving quickly to either partner with a startup or acquire one.  Examples include BlackRock, which recently acquired FutureAdvisor for a reported $150-200 million; JP Morgan’s recent partnership with Motif Investing, and UBS’ equity investment in SigFig. There are likely to eventually be a number of vendors of corporate robo-advice, though they are not widely available at this point. Regardless of which strategy you pursue, it seems likely that corporate robo-advisors are coming to many parts of the organization, just as software has spread through the value chain over the last two decades. Robo-advisors have the potential to deliver a broader array of advice and there may be a range of specialized tools in particular decision domains. These robo-advisors may be used to automate certain aspects of risk management and provide decisions that are ethical and compliant with regulation. In data-intensive fields like marketing and supply chain management, the results and decisions that robotic algorithms provide is likely to be more accurate than those made by human intuition. Finally, it is becoming clear that serious AI adopters with proactive business strategies based on it benefit from higher profit margins. In fact, a McKinsey survey suggests that these front runners report current profit margins that are 3 to 15 percentage points higher than the industry average in most sectors, and they also expect this advantage to grow in the future. In the next three years, these AI leaders expect their margins to increase by up to 7 percentage points more than the industry average. Of course, traditional consultants and other providers of corporate advice are unlikely to disappear. Like the human advisors that still complement robo-advisors in the investment world, they can provide a number of key functions. Here are several ways existing corporate advisors can complement their future robot partners: Integrate different online advice sources, and help clients and investment firms to understand what systems to use for what purposes. Human advisors could also, like hedge fund managers, analyze the results from machine-advised decisions and advise clients on whether changes are necessary in the algorithms and logic employed by the machines. Shift to providing advice on business models, not just strategy and operations. We suggested in a recent article that pure advice from even the most elite consultants would be put at risk by machine learning. However, our research as well as others’ suggest that consultants can focus on their clients’ business models rather than just strategy, operations, and best practices to insure their future growth, relevance and success. Deliver behavioral coaching. As corporate strategy advice is increasingly disrupted by algorithms and artificial intelligence, corporate advisors could coach leaders on the best approach to success using their EQ skills. As with behavioral coaches in individual investing, corporate coaches could, for example, dissuade leaders and boards from buying companies at the top of the market or selling when the markets crash. They can help them with change management as smart machines provide new insights at increasing speeds. While the details of adoption of automated advice from robo advisors in all industries are unclear, it is likely that the future will include automated advisors in many fields. They already exist in personal investing, driving navigation (Google Maps, Waze), matchmaking (EHarmony, Match.com), and healthcare (WebMD Symptom Checker). It seems only logical that they would extend into corporate strategy and finance. Financial services firms, financial advisors, and their clients were the first to witness substantial disruption, but they won’t be the last.  The days of only face-to-face discussions between client and consultant may not vanish altogether, but they shift from crunching the numbers to changing behaviors and nurturing relationships with clients.  As Ian Dodd, Director of legal analytics firm Premonition, said to the BBC, “The knowledge jobs will go.  The wisdom jobs will stay.”

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12 января, 14:00

Is Anyone In Your Company Paying Attention to Strategic Alignment?

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Pm images/Getty Images The best performing companies are often the best aligned. But who in your company is paying attention to how well aligned your strategy is with your organization’s purpose and capabilities? In my research and consultancy with companies, I observe that, oftentimes, no individual or group is functionally responsible for overseeing the arrangement of their company from end to end. Multiple different individuals and groups are responsible for different components of the value chain that makes up their company’s design, and they are often not as joined up as they should be. All too often, individual leaders seek — indeed are incentivized — to protect and optimize their own domains, and find themselves locked in energy-sapping internal turf wars, rather than working with peers to align and improve across the entire enterprise. So, who should be responsible for ensuring your company is as strategically aligned as it can be? The answer should not be “the CEO” or “the Chairman” or the equivalent. The job of aligning the modern corporation is too complex to be added on to the slate of someone whose job it is to consider hundreds of other things, no matter how talented or powerful they are. Consider for your own company: Practically, who at the enterprise level in your company is responsible for ensuring it’s as strategically aligned as possible? Is their focus and behavior consistent with this responsibility, or is it merely an addition to their overriding day job? Is it the responsibility of your company’s most senior managers, or should it be a more distributed responsibility? How much and how often is time devoted in your company to revisiting its core organizing principles and discussing how to build capability for tomorrow’s customer, versus focusing on today’s business? How is your company’s leadership making informed decisions about the arrangement of your company as a complex system of many moving and interconnected parts — including organizational capabilities, resources, and management systems — all aimed at fulfilling one overarching purpose? What frameworks and information do your leaders require to ask good questions, have better conversations, and make robust strategic and organizational choices? What capabilities do your enterprise-level leaders require to be effective at aligning your company to ensure it is fit for its purpose? Leaders I’ve worked with who take on the challenge of strategic alignment describe themselves as needing to be “multi-everything” in outlook and ability. Multi-everything in this sense means: multi-level: being capable of enterprise level thinking – from 50,000 feet down; multi-disciplinary: being “T-shaped,” or possessing generalist and specialist knowledge ranging across the business; multi-national: having no geographical or cultural bias in scope or decision making; multi-stakeholder: understanding the company from multiple perspectives and interests and, finally; multi-phased: choosing to think in the near, medium and long-term despite pressure for immediate results. If there are no obvious answers to these questions, then there is a good chance that nobody is paying enough attention to strategic alignment in your company. If that’s the case, you urgently need to address this gap in leadership focus and capability. Achieving sustainable competitive advantage through superior strategic alignment does not happen by accident – it happens by design, or not at all, and it requires a special breed of leadership, which I call enterprise leadership.   What Do Enterprise Leaders Do? Unlike mainstream ideas about personal leadership, which at their core are concerned with mobilizing people, enterprise leadership is concerned with mobilizing the resources of an entire company as a system of many moving and interconnected parts, of which people (or “human resources”) are just one element, and not even necessarily the most important for developing strategically important organizational capabilities. Enterprise leaders are not people leaders in the traditional sense; they are the system architects of their company’s long-term success. The purpose of enterprise leadership is to make strategic interventions to ensure the most important components of the company’s fundamental design align seamlessly. These components include the company’s business strategy (how the company is trying to win at fulfilling its long-term purpose), its organizational capabilities (what it needs to be good at to win), its resources (what makes it good enough to win, including its structures, cultures, people and processes) and its management systems (what delivers the day to day performance it needs to win). These critical components form a value chain through which companies perform their long-term purpose, more or less well. The value chain is only as strong as its weakest link. Principally, enterprise leaders are responsible for: Envisioning: Crafting a robust vision of what strategic alignment looks like at their company, and communicating that vision in a meaningful way to others, including investors, staff, business partners and customers. The vision outlines the essential principles that will guide the company’s detailed strategic planning, organizational design, operational priorities, and performance goals. Designing: Following those principles, enterprise leaders should carefully design each component of the company’s value chain to be highly complementary of each other, and supportive of the firm’s long-term purpose. Tweaks to the organization’s design may happen only episodically, but the leader’s concern with strategic alignment should be constant. The design and management of the company as a complex and adaptive system of many moving and interdependent components should be revisited regularly, based upon robust diagnosis, to ensure it remains fit for purpose despite changes in the external environment. The challenge is there is no one-size-fits-all choice of business strategy or related organizational design that results in superior strategic alignment. Organizational structures and cultures, for example, should be as distinctive as the strategies they support and make possible, which in turn depend upon the organization’s long-term purpose. For instance, to become more innovative, many companies are attempting to redesign themselves as agile, highly connected and open networks of teams and partners in which knowledge is highly dispersed. The cost to this is that network-based organizations are complex to manage and hard to control. For product-centric companies, where cost management is the strategic priority, the relatively simple, stable and closed-system hierarchy characteristic of “bureaucratic” thinking remains in principle the best organizational design. Who Are the Enterprise Leaders? The enterprise leadership role often falls to senior executives by default. In some companies embracing network-based working structures, the responsibility is also the domain of dedicated design teams. No one approach to enterprise leadership is better than the other. Japanese multinational, Ricoh, for example, has invested in building a highly networked internal design function within its 105,000 strong workforce operating across 200 countries, referred to as the Future Business Development Center. Its purpose is to operate at the enterprise-level and lead positive business transformation across all business lines and geographies in line with the long-term group strategy and future customer requirements. Built to harness rigorous design thinking capability, the diverse team consists of technologists, advisors, analysts and researchers—not simply career managers. The thinking is that to achieve superior strategic alignment in the face of increased business complexity requires harnessing the collective intelligence and energies of a purposeful team of enterprise leaders across the organization, and their extended internal and external support networks. Regardless of for whom it is a responsibility, enterprise leadership is essential to designing and managing ever more complex companies as highly capable systems, fit to meet the demands of customers and resist the disruptive maneuvering of competitors. Without it, the risk is that companies flip-flop between different strategies and unconnected organizational designs in endless rounds of reorganization or, conversely, mistakenly maintain the status quo and fall behind competitors in the rapidly changing marketplace. The best companies are the best aligned, but only when led by design.

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12 января, 13:05

Self-Awareness Can Help Leaders More Than an MBA Can

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Jessica Durrant/Getty Images Vincent Siciliano, CEO of California-based New Resource Bank, was brought in to turn things around and restore the bank’s founding mission, which is to “serve values-driven businesses and nonprofits that are building a more sustainable world.” Within a few years, Vince had the bank back on track, but not everything was going as well as it seemed. After the successful transition, the leadership team decided to take the pulse of the organization, and discovered low levels of engagement and displeasure with senior leaders. Vince was surprised, but he assumed the discord was left over from the many changes the organization had gone through, so he chose not to take action — time would heal all. A year later, the bank sent out another employee survey. This time, the results were more specific: Morale was a significant issue, and the majority of people, including members of the senior leadership team, identified Vince as the root cause. Vince was crushed, and oscillated between anger, indignation, defensiveness, and blame. He wondered, “How could they say these things about me? Don’t they understand how far we’ve come under my leadership?” He could have stayed in this negative mindset, wallowing in self-pity and searching for excuses. Instead, after being a successful high-achiever throughout his career, he decided to confront an uncomfortable truth: He wasn’t the great leader he thought he was. He was leading by the book and trampling over the concerns of others who were not ready to move so fast or didn’t understand the reasons for the changes he had implemented. In our conversation with Vince, he said: “My ego had run amok. I was leading from my head and not from my heart.” He realized that, despite all the skills he had developed through his years of management education and professional development, he’d never been directed to take a long look in the mirror and ask questions about who he was, what he valued, and what it really meant to be a leader. Since then, the bank’s teamwork and employee opinion scores have dramatically increased, and now there is a high-performing team that focuses on both relationships and results. Vince’s experience is not unique. Self-awareness is not part of the standard curriculum in most management education programs. The majority of MBA degrees focus on strategy and spreadsheets — the things Vincent excelled at. But this focus blinded him to what was happening in his organization. Approximately 40% of CEOs are MBAs. Many large-scale studies have found that leadership based solely on MBA-trained logic is not always enough for delivering long-term financial and cultural results, and that it is often detrimental to an organization’s productivity. In one study, researchers compared the organizational performance of 440 CEOs who had been celebrated on the covers of magazines like BusinessWeek, Fortune, and Forbes. The researchers split the CEOs into two groups — those with an MBA and those without one — and then monitored their performance for up to seven years. Surprisingly, the performance of those with an MBA was significantly worse. Another study, published in the Journal of Business Ethics, looked at the results of more than 5,000 CEOs and came to a similar conclusion. To be clear, we’re not saying MBAs are not useful in leading an organization. But if the linear MBA-trained logic becomes the sole focus — at the cost of other skills, like self-awareness and understanding others and the culture — the leadership approach is out of balance. That was the case for Vince. He had all the numbers right. His strategy was clear. But people didn’t like working with him and were increasingly unhappy. He was managing based on prevailing business theories, but he didn’t know or understand himself. Because he lacked self-awareness, people found Vince inauthentic. Subsequently, they weren’t keen to follow him or support his leadership. Luckily for Vince, he was open to change, and through a journey of mindfulness and self-awareness coaching , he was able to become more of the leader he wanted to be. Bill George, a professor of leadership at Harvard Business School, and former CEO of Medtronic, says that self-awareness is the starting point of leadership. Self-awareness is the skill of being aware of our thoughts, emotions, and values from moment to moment. Through self-awareness, we can lead ourselves with authenticity and integrity — and in turn better lead others and our organizations. We conducted a survey of more than 1,000 leaders in more than 800 companies in over 100 countries, and found that leaders at the highest levels tend to have better self-awareness than leaders lower in the hierarchy. This could be because stronger self-awareness accelerates the promotion process, or because, like Vince, we’re nudged toward enhancing our self-awareness as our leadership responsibility increases. Further Reading The Mind of the Leader Leadership & Managing People Book Harvard Business Review 30.00 Add to Cart Save Share Fortunately for all of us, self-awareness can be enhanced. Simple steps can be taken to complement one’s traditional leadership skills with it. Adopt a Daily Mindfulness Practice Research published in Nature Neuroscience has found that a short daily mindfulness practice leads to changes in the structure and function of the brain that enhance self-awareness. In our work with a global IT company from Silicon Valley, we found that even just five weeks of 10 minutes of daily mindfulness training enhanced the participating leaders’ self-awareness up to 35%. Mindfulness training enables you to expand your awareness of what’s happening in the landscape of your mind from moment to moment. It helps you to notice and regulate your emotions, and it helps you to better understand the behavior, reactions, and emotions of the people you lead — and in turn create better relations and lead for more impact. (If you are curious about trying out a mindfulness practice, we provide more guidelines here.) Take Regular Breaks When we come under pressure, we default to doing what we have always done. We resort to habitual thinking and behavior. There is not much awareness in that, and little space for understanding yourself or the people you lead. Taking regular short breaks, of even just one minute, gets you out of habitual thinking and behavior. It provides you space for awareness to arise and to see things clearer. An awareness break is a break where you do nothing. You don’t check the news, your phone, or social media. All of that just occupies the space of your mind and does not allow for awareness to arise. Rather, you need to put down your phone, turn away from your computer, and simply look out the window, close your eyes, or walk down the hallway and back. Pay Real Attention to What Others Say When we are busy, our brains default to pattern recognition. It wants simplicity. And when others talk to you, your brain will automatically look for what it has heard before and eliminate what is new. That way, as in Vince’s case, you won’t hear others’ concerns and opinions, and you won’t have the finger on the cultural pulse. You risk getting insulated in your leadership bubble, where your brain only really listens to your inner voice. To avoid the brain’s default pattern recognition, make an effort to listen with two ears wide open, and mouth shut, when you are with others. Also, ignore the inner voice of your mind that comments on everything you hear. Be open. Be curious. And question your assumptions.

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11 января, 17:46

If Retailers Want to Compete with Amazon, They Should Use Their Tax Savings to Raise Wages

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Enis Aksoy/Getty Images Walmart announced today that it is raising its starting wages in the United States from $9 per hour to $11, giving employees one-time cash bonuses of as much as $1,000, and expanding maternity and parental leave benefits as a result of the recently enacted tax reform. It is part of Walmart’s broader effort to create a better experience for its employees and customers. The new tax law creates a major business opportunity for other retailers as well — if their leaders are wise enough to take advantage of it. The U.S. corporate tax rate is dropping from 35% to 21%. Retailers, many of whom have been paying the full tax rate, are going to benefit substantially. Take a retailer that makes 15% pretax income. Assuming its effective tax rate goes from 35% to 21%, it could save the equivalent of 2.3% of sales. Specialty retailers with higher pretax income will save even more. Retail executives have a choice in how they use these savings. I believe the smartest choice — one that will help them compete against online retailers like Amazon — is to create a better experience for customers and to achieve operational excellence in stores. For most retailers, doing both requires more investment in store employees — starting with higher wages and more-predictable work schedules. My research shows that combining higher pay for retail employees with a set of smart operational choices that leverage that investment results in more-satisfied customers, employees, and investors. Retailers that do not provide a compelling draw for their customers may not make it. In 2017, according to Fung Global Retail and Technology, there were nearly 7,000 store closing announcements, the second-largest number since 2000. There were 662 bankruptcy filings in retail, according to bankruptcydata.com, up 30% from 2016. This year is expected to be even worse. What’s more, two of my MIT Sloan MBA students analyzed store openings and closings from 2015 to 2017, looking at department stores with more than 50 stores and over $100 million in revenues, and found a positive correlation between customer satisfaction, as measured by Yelp ratings, and the net change in the number of open stores. Many companies can no longer grow profitably just by adding stores — they need to get more out of their existing stores. Operational excellence makes that possible by ensuring that merchandise is in stock and well displayed, checkout is efficient, stores are clean, and employees are responsive to customers. Operational excellence also makes it possible to provide a better omnichannel experience by linking digital and brick-and-mortar channels. For instance, retailers are increasingly expecting in-store employees to serve customers who order online, by shipping products to those customers or enabling them to pick up their orders in the store. If that doesn’t work smoothly — that is, without operational excellence — it’s going to waste a lot of employee and customer time and convince customers they’re better off shopping online than in the store. Creating a great customer experience and achieving operational excellence both require a capable and motivated workforce. You need knowledgeable employees who are cross-trained to manage customers’ needs wherever they arise. You need employees who can empathize with customers, are empowered to solve customer problems, and can spot opportunities to improve operations. You also need a capable and motivated workforce that can embrace and leverage new technologies. Yet most retailers are far from having that kind of workforce. In 2016 the average employee turnover in retail was 65%. It’s hardly surprising, given that most retailers do not meet their employees’ basic needs, such as a living wage or a predictable schedule, let alone offer the conditions for motivation and engagement. In 2016 the median hourly wage of the country’s nearly 9 million retail workers was $10.37, below the poverty threshold for a family of four. Many retailers provide employees with their schedules only one or two weeks in advance, and might change them at the last minute. It is hard to focus on your work and empathize with customers when you can’t put food on the table or manage your life. If we assume that payroll is 10% of sales — which is not atypical in retail — and if retailers use half of their tax savings (about 1.15% of sales) to increase wages, employees’ hourly wages would increase by 11.5%, putting them slightly above the poverty threshold. That increase, along with more-predictable schedules, would signal the company’s higher commitment to its employees and help create a more stable workforce. Once a company has workforce stability, it can start working on other changes such as empowering and cross-training employees and engaging them in continual improvement. As other companies have found, those changes will improve service and productivity, which will improve profitability. In short, the initial investment in employees will — if followed up — more than pay for itself. Investing in store employees is not just the smart thing to do. It’s the right thing to do. “We didn’t want to build a low-cost business on the backs of employees,” Costco cofounder Jim Sinegal told my students last year. I don’t think he’s the only retail leader who feels that way. The tax cut offers executives a unique opportunity to combine their moral reasoning with competitive forces in the retail industry to create an organization that is stronger today and better prepared for tomorrow.

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11 января, 16:00

Why People Really Quit Their Jobs

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MirageC/Getty Images People don’t quit a job, the saying goes — they quit a boss. We’ve heard it so many times that when we started tracking why employees leave Facebook, all bets were on managers. But our engagement survey results told a different story: When we wanted to keep people and they left anyway, it wasn’t because of their manager…at least not in the way we expected. Of course, people are more likely to jump ship when they have a horrible boss. But we’ve spent years working to select and develop great managers at Facebook, and most of our respondents said they were happy with theirs. The decision to exit was because of the work. They left when their job wasn’t enjoyable, their strengths weren’t being used, and they weren’t growing in their careers. At Facebook, people don’t quit a boss — they quit a job. And who’s responsible for what that job is like? Managers. If you want to keep your people — especially your stars — it’s time to pay more attention to how you design their work. Most companies design jobs and then slot people into them. Our best managers sometimes do the opposite: When they find talented people, they’re open to creating jobs around them. Working with our People Analytics team, we crunched our survey data to predict who would stay or leave in the next six months, and in the process we learned something interesting about those who eventually stayed. They found their work enjoyable 31% more often, used their strengths 33% more often, and expressed 37% more confidence that they were gaining the skills and experiences they need to develop their careers. This highlights three key ways that managers can customize experiences for their people: enable them to do work they enjoy, help them play to their strengths, and carve a path for career development that accommodates personal priorities. Crafting Jobs for Enjoyment Many of us have unanswered callings at work — passions that we didn’t get to pursue in our careers. Whether we lacked the talent, the opportunity, or the means to make them our occupations, landing in a different career doesn’t make these passions disappear. They linger, like the professional version of the one who got away. And since we spend the majority of our waking hours at work, there isn’t always time to pursue these unanswered callings as hobbies. So we look for ways to bring our passions into our jobs. Personally, we know a lawyer who missed his dream of being a pilot and so sought out aviation cases, and a teacher who walked away from a music career but brings a guitar to class. But inside organizations, people often need support to craft their jobs. Managers can play a major role in designing motivating, meaningful jobs. The best go out of their way to help people do work they enjoy — even if it means rotating them out of roles where they’re excelling. A few years ago, one of Facebook’s directors, Cynthia, was leading a large team of HR business partners. She realized that she wasn’t spending her time doing what she enjoyed most: solving problems with her clients. She had taken on more responsibilities managing a large team because of her strength as a trusted adviser to some of Facebook’s key leaders. But once she was in the job, she realized it meant doing less of the work that energized her. With her manager’s support, Cynthia hired someone new onto the team, with the long-term vision of asking her to run the team and then moving back to an individual contributor role. Cynthia wasn’t just hiring a direct report; she was hiring her future boss. Once the new hire was ramped up, and it was clear that she enjoyed the organizational and people management elements of her job, she and Cynthia made the switch. Cynthia is now thriving, solving problems with the clients she loves so much, and her new hire is leading the team. Keeping Cynthia at Facebook was much more important to her manager than keeping her in a particular role. Too often, managers don’t know enough about what work people enjoy. It spills out in exit interviews — a standard practice in every HR department to find out why talented people are leaving and what would have convinced them to stick around. But why wait until they’re on their way out the door? One of us, Adam, has worked with companies in multiple industries to design entry interviews. In the first week on the job, managers sit down with their new hires and ask them about their favorite projects they’ve done, the moments when they’ve felt most energized at work, the times when they’ve found themselves totally immersed in a state of flow, and the passions they have outside their jobs. Armed with that knowledge, managers can build engaging roles from the start. Bringing in Underutilized Strengths In a world dominated by specialization, we’re long past the era of the Renaissance Man. Once in a blue moon we see one. Marie Curie won a Nobel prize for her pioneering work in physics, and then earned another in chemistry. Richard Feynman transformed electrodynamics, decoded Mayan hieroglyphs, and cracked safes in his spare time. Although few reach this level of accomplishment in multiple fields, many talented people are polymaths. At Facebook, our head of diversity is a former lawyer, journalist, and talk show host; one of our communications leaders used to sing in a rock band; and one of our product managers is a former teacher. Sadly, the narrow job descriptions that companies create stifle their ability to use the full range of their employees’ skills. Smart managers create opportunities for people to use their strengths. To see how that can play out, let’s consider Chase, who was recently working as a software engineer at Instagram. About six months ago, when his team went through rapid product iteration to introduce new tools and formats, Chase helped lead the team to exceptional results. But he finished the project drained from the extensive coding and cross-functional work — and started wondering whether there were other ways to contribute. Talking with his manager, Lu, he realized that while he had a strong technical background, where he really excelled was building prototypes to help prove concepts quickly and then iterating. But Instagram didn’t have any roles that blended this skill set, and Chase didn’t have a track record in traditional design work. Lu convinced the design team to take a risk and allow Chase to try a new role for a “hackamonth.” During that time, Chase partnered with Ryan, a product design lead, to quickly build several prototypes that tested novel ways of capturing and sharing. His success not only landed him in a brand-new role that leveraged his strengths but also created the conditions to build a broader team of collaborators with similar skills and interests. According to Lu, “A shift to this role was a no-brainer for Chase and a win for Instagram. All that was missing was the push to make this happen.” Creating new roles isn’t the only way to let people play to their strengths. In a connected world, a huge part of getting work done is seeking and sharing knowledge. Some estimates suggest that knowledge workers spend more than one-quarter of their time searching for information. It’s up to managers to help them figure out where to turn. As managers learn who knows what, they can connect the dots — or better yet, build a searchable database of experts. The goal is to put employees’ strengths on display so that people know whom to contact. Making It Possible to Lean In at Work and at Home In too many situations, opening a door in our careers means closing one in our personal lives. The special project that takes date nights away from our partners. The big promotion that takes weekends away from our kids. The new role across the country that takes us away from our families. At Facebook, our best managers work with people to minimize these trade-offs by creating career opportunities that mesh with personal priorities. Here’s an example. Shona, an agency lead, was coming back from maternity leave to a global role where time zones directly conflicted with her parenting. With her manager, Shona developed a prioritization plan for travel. For anything that was important but not essential, she worked with regional colleagues to set up meeting coverage. Shona’s manager also connected her with a mentor in a global role who guided her through her transition. In Shona’s words, “This deep level of support gave me the confidence to return to work fully present and also be there for my daughter.” Managers who give this kind of support find that their people not only deliver but also stay longer — they’re proud of where they work. People leave jobs, and it’s up to managers to design jobs that are too good to leave. Great bosses set up shields — they protect their employees from toxicity. They also open doors to meaningful tasks and learning opportunities — they enable their people to be energized by their projects, to perform at their best, and to move forward professionally without taking steps backward at home. When you have a manager who cares about your happiness and your success, your career and your life, you end up with a better job, and it’s hard to imagine working anywhere else.