Tag Archives: HBR

Why All Business Has to be More Social

Are trends favoring social businesses over classic “greed is good” businesses? Is all business social business? Or, every day, more business is social? I think so. I hope so.Define_Social_Entrepreneurship

I first heard the term “social venture” in the late 1990s. Back then, social ventures were the odd exception to the norm, making money while making things better for their employees, their community and rest of the world. They sold devices to sanitize drinking water in the developing world for small profits. They sold technology to develop clean energy. They sold goods that protected the health of the less privileged in the developing world.

It’s been about two years since Harvard Business Review published “Every Business Is (or Should be) Social,” an article by Deborah Mills-Scofield. She wrote:

All businesses are social. All companies have people as customers, employees and suppliers. At some point in deciding which supplier to use, in engaging your workforce, and in getting your product into users’ hands, relationships with people matter. Improving their experiences always improves the outcome for your company.

It’s not just random change. It’s progress.

It’s not that people running businesses are more ethical or moral than they used to be. It’s because of changes in rewards and penalties for good or bad behavior. Social and technological changes are real factors.
The big change started with the Internet in the 1990s. Websites gave businesses a new and different way to reach the world. Before the World Wide Web, businesses had essentially only two ways to reach out to get people to know, like and trust them. They could pay for advertising. Or they could go through the media with public relations, events, articles, speaking opportunities and the like.

The second option depended on getting through gatekeepers: editors, event managers, producers and so forth. By the middle-to-late 1990s, businesses could generate their own website and online options to attract people and help them get to know, like and trust them.

Then came blogging. Millions of people started their own blogs. Experts established their expertise by writing and publishing blog posts and articles. The gatekeepers ceded power to the general public, the readers, search engines and the quality of content. Authors, consultants and assorted business experts established themselves independently of gatekeepers.

The finishing touch was social media. Facebook, Twitter, LinkedIn and other social sites offered publishing for the masses, billions of opinions expressed as likes, follows and comments.

The result of these trends is what we call transparency.

In his book “The Age of the Customer,” small business advocate Jim Blasingame suggests that we’ve passed a tipping point. “You don’t control your brand,” he says, “your customers do.” And that is a shift in centuries of business reality, he adds.

And it’s because of the accumulated power of the customer as publisher in millions of tweets and updates.

Transparency means bad business behavior is more likely to result in damage to the brand. Big corporations still want to spin information toward their favor, but it’s more difficult to do.

United Airlines took a huge hit in brand image when a customer posted a video on YouTube complaining about treatment of a guitar. Clothing brand Kenneth Cole took a huge hit when its founder tweeted that riots in Cairo were caused by his firm’s new spring fashion line. When Volkswagen cheated on emissions tests, the world knew. When General Motors misplayed product recalls, the world knew.

Transparency also means that good business behavior matters more, too.

Markets care about business stories. A new local business is more effectively able to compete against big national brands because buyers know the local firm’s story and care about it. Clean energy businesses are finding buyers willing to pay more for renewable energy than fossil fuel energy. People pay more for healthy food than mass-produced food. People care about genetically modified foods, and local foods. Some customers prefer local coffee shops to Starbucks. Chain restaurants are less attractive to some than local restaurants.

As we look at business today and trends, shouldn’t all businesses be conscious of their impact on employees, customers, the environment, the economy and the world?

Isn’t it a sign of progress that when so many businesses have a social conscience that we drop the distinction between social business and just plain business? Shouldn’t good behavior be a business advantage?

I’m happy to report that I think it’s happening. Slowly and in stops and starts, progress is being made. All business should be social business.

(Note: republished with permission from my monthly column in the Eugene Register Guard Blue Chip magazine.) 

Real Cases: Paths Female CEOs Took to the Top

This is interesting: Harvard Business Review just published some research on how large-company female CEOs reached the top. The authors looked at the career paths of 24 women who head Fortune 500 companies.

Executive women

They do say they were testing the standard assumption that these women took “the most competitive business tracks, like investment banking and management consulting.”

It turned out, however, that the standard assumption wasn’t particularly accurate.

Most women running Fortune 500 companies did not immediately hop on a “competitive business track.” Only three had a job at a consulting firm or bank right out of college. A larger share of the female CEOs—over 20%—took jobs right out of school at the companies they now run.  These weren’t glamorous jobs.  Mary Barra, now the CEO of General Motors, started out with the company as college co-op student.  Kathleen Mazzearella started out as a customer service representative at Greybar, the company she would eventually become the CEO of more than 30 years later. All told, over 70 percent of the 24 CEOs spent more than ten years at the company they now run, becoming long-term insiders before becoming CEO. This includes Heather Bresch at Mylan, Gracia Martore at Gannett, and Debra Reed at Sempra Energy.

Even those who weren’t promoted as long-term insiders often worked their way up a particular corporate ladder, advancing over decades at a single company and later making a lateral move into the CEO role at another company.  This was the experience of Patricia Woertz, CEO of Archer Daniels Midland (ADM), who built her career over 29 years at Chevron.  And it was the experience of Sheri McCoy, who became CEO of Avon after being passed over for the CEO role at Johnson & Johnson, where she worked for 30 years.

I was glad to read that the authors conclude with some inspiration for women executives:

… the notion that regardless of background, you can commit to a company, work hard, prove yourself in multiple roles, and ultimately ascend to top leadership. These female CEOs didn’t have to go to the best schools or get the most prestigious jobs. But they did have to find a good place to climb.

And, by the way, 24 women CEOs for 500 big companies? Too bad. It should be about 250, shouldn’t it?

(This was originally published on Planning Startups Stories)

Oh No! Microbreaks Are Productive, Real Breaks Aren’t

What, no coffee break? This feels vaguely like the idea that so-called grazing all day is better than three good meals and nothing else. Clearly, I’m way too old-fashioned. I just discovered that traditional coffee breaks do nothing for productivity. 

And I do mean traditional. The idea brought me quickly to this old number, from a musical that debuted in 1961, which was made into a 1967 movie, and is now a hit revival. This is a piece of history. It’s from decades before Starbucks. What happened to coffee at your desk? Before we discuss micro breaks let’s consider what we’re losing: (The YouTube number here is from How to Succeed in Business Without Really Trying. Or you can click this link to see it on YouTube.)

The microbreak idea is from Boost Your Productivity with Microbreaks, and HBR Ideacast from earlier this month. Portland State professor Charlotte Fritz studied the problem of productivity and breaks. It turns out that what works for me — the quick walk, the change of pace, a non-business phone call — doesn’t actually work that well. 

Microbreaks are a term that me and some colleagues came up with to describe all the little things that we do during somewhat unofficial breaks during the workday. … going to the water cooler, chatting with a colleague, checking in on your family … we were looking at these microbreaks, thinking about them in terms of recovery at work. So, the little things that keep us energized throughout the workday that aren’t bigger breaks. 

And what they discovered was not what you’d expect (or at least not what I expected):

….the work-related tasks, and specifically tasks that were associated either with learning something new, realizing the meaningful pieces about your work, or connecting positively with others at work, those were the ones that seemed to be related to feeling energized at work.

Not that anybody actually takes old-fashioned coffee breaks. Do you? Don’t we all grab the coffee (or tea, or Pepsi (yech)) quickly and sip it in the morning while we deal with email, blog posts, Twitter, and the business morning routine? So I think Starbucks is safe. 

And the study doesn’t say productivity depends on working all day every day without stopping. There is this comforting note: 

this was the first study that ever looked at it that way, so we need to be a little bit cautious with our interpretation. But with regard to those microbreaks, yes, going for a walk and so on, going outside for fresh air, that wasn’t related to energy at work. However, I would say, maybe it’s because we were just specifically looking at shorter breaks, microbreaks. However, during a lunch break, I would still encourage people to go for a walk, go outside, and get some sun in.

And this one too:

we do know by now that vacations are good for us. So, definitely again for well-being and health, helps reduce burnout and so on. We do find that they’re good for us. But we also find that the effects fade out relatively quickly. So, within two or three weeks after we come back from vacation, all the positive effects have pretty much faded out. What that suggests is that, rather than taking one long break per year, it would be good to take vacations, maybe a week, like five to six days long or something, or even maybe just long weekends several times per year to recharge.

Amen to that. 

Double Your Productivity with Real Focus

According to the emails and comments, Tony Schwartz’ post The Magic of Doing One Thing at a Time on the Harvard Business Review is getting a lot of attention this morning. He says: vision

Tell the truth: Do you answer email during conference calls (and sometimes even during calls with one other person)? Do you bring your laptop to meetings and then pretend you’re taking notes while you surf the net? Do you eat lunch at your desk? Do you make calls while you’re driving, and even send the occasional text, even though you know you shouldn’t?

I recognize that behavior. That’s often me. Tony follows with:

The biggest cost — assuming you don’t crash — is to your productivity. In part, that’s a simple consequence of splitting your attention, so that you’re partially engaged in multiple activities but rarely fully engaged in any one. In part, it’s because when you switch away from a primary task to do something else, you’re increasing the time it takes to finish that task by an average of 25 per cent.

That reminds me of the “good-ol’ days” in the 1980s when I was writing books and doing consulting. I would lock myself in with a project. I’d focus and get two and sometimes three hours straight concentrated productivity on one thing. All I had to do, back then, was take the damn phone wire out of the phone. I’ve always been a procrastinator, but this concentrated focus was my remedy. Wait until deadline, then dive in. Full force.

Today it takes putting the computer to sleep too.And — much  it also takes a lot of discipline. I confess. I don’t think I’ve managed to focus that well for years.

(Image: bigstockphoto.com)

In Planning, Not All Metrics Are Created Equal

This is an important point. More and more I’m focusing on metrics as a vital component of any useful business planning process, but then I read Entrepreneurs: Beware of Vanity Metrics from Harvard Business Review, which warns of …

… the curse of vanity metrics, numbers which look good on paper but aren’t action oriented: website hits, message volume, or “billions and billions served.” They look great in a press release, but what do they accomplish?

Metrics are magic, or at least that’s what I’ve written in a number of places, related to business planning. But maybe I should have written good metrics, or valid metrics. Metrics as measurement become accountability, which becomes management. Build the metrics into your planning process, and you have better management, better steering, and better teamwork. Not just dollars, but metrics you can track, and metrics that are specific to different jobs, functions, and goals.

Good metrics might be sales, costs, expenses, trips, seminars, ads placed, publications, leads, presentations, posts, tweets, retweets, calls, minutes per call, incidents per serial, and so on. You need things you can track.

But vanity metrics happen all the time. Those are the numbers that look good but come after the fact, without a direct link to cause or performance. I’ve used vanity metrics often enough to know. When preparing a presentation, find a number that looks good, and pretend that it shows progress.

Cool … but is that what you were aiming for?

(Image: 3DDock/Shutterstock)

It Was Easier to Lay Off 5 People than Fire One

During in the recession of 2001, I let 5 people go in a single day. Our sales were down, but we held on, for too long, hoping things would turn up in time to save the jobs. They didn’t.

Letting people go is the hardest thing a small business owner does.

But from that hard time I discovered something surprising. It was easier to let 5 people go, all on the same day, than to fire one person separately.

When it’s 5 at once, they don’t feel like they’ve failed. They don’t suffer that personal failure that comes when it’s one person at a time. They know it’s the economy.

When it’s one person, there’s no way around the sense of failure. No matter what the circumstances, or what the words, it hurts.

The hardest thing I’ve had to do was fire somebody who was honest and hard working but had to go anyhow, for good reasons. That was way harder than letting 5 people go on the same day.

We went from 36 people before the 2001 recession to 24 at the worst of it. Most of that decline was through attrition, but there was that one hard day.

I’m glad to say that Palo Alto Software seems to be weathering the current recession without laying off any employees, this time around. We’ve actually taken a couple of new people on. That’s a credit to the new management team, not to me.

What reminded me of this was Bob Sutton’s Layoffs: One Deep Cut Versus Lots of Little Cuts, on his blog. He refers there to a fascinating discussion, in video, of his recent Harvard Business Review article on Good Bosses in Bad Times.