“When are you thinking of retiring?” I am used to this question by now. It usually comes up an hour into a meeting with a client prospect for our investment company, often after a shuffling of papers and downward glances. “And what is your plan for succession at the company?”
At first, I used to be surprised. Did I look that old? I’d reply that I had no near-term plans to retire and that we had a very strong team of younger executives, including the current president, whom I had designated as my eventual CEO replacement. Then I cycled through a range of reactions: annoyance with the inquiry; concern that women are still not considered as “committed” as men, even when we’re CEO; and wanting to better understand why people felt compelled to ask me about retirement.
It turns out that I am not the only one who’s wondered about this. I informally surveyed 280 business leaders, all over 55 years old, the majority of whom work for small to mid-sized firms in the U.S. I found that 30% had been asked about retirement, primarily by clients or prospects. Both men and women were queried about retirement, generally starting by age 60, across all industry groups. Many said they believed the question was seeking reassurance.
The fact is that CEOs tend to be the face of their organizations, especially at small to mid-sized companies, where they may work with the most important clients, and when they are the founder. Prospects may have been drawn to the company specifically because they heard about the CEO. So it is entirely reasonable that customers planning their future with you would want to know about any upcoming retirement plans.
CEOs have to anticipate this concern and be proactive in addressing it. The growth of your business may depend on how well you can ensure clients that the company will be fine under your successor’s leadership. The further away you are from retirement, the longer you can handle that client’s needs; but the closer you are to departure, the more you need to convince them that your colleagues are as good, if not better, than you. (And if you’re nowhere near retirement, you should simply state that you love your job, have numerous initiatives underway, and look forward to fulfilling them in collaboration with colleagues and clients.)
Failing to communicate succession plans clearly with clients, workforce, and shareholders can result in internal chaos, loss of current and future business, and decline in stock value. As CEO, it’s your duty to be mindful about client concerns and carefully consider your tenure, transfer of responsibility, retirement timing, and appropriate communication. Failing to do this may put your firm and your ultimate successor at risk.
Here’s an action plan that may help:
If you are the CEO of a small to mid-sized company, you need to begin thinking about your own transition many years before retirement. That includes deciding when you will retire and at what pace you will divest your current responsibilities.
From there, you can decide whom to move tasks to, whether you have the right people in place, and, if not, how to attract and train the next generation of leaders. Only at that point can you begin to implement these reassignments.
With this plan in place, you’ll have a more thorough response to any questions about when you will retire and who will succeed you. When it comes to timeline, you can always offer a range (4-6 years from now, for example) or explain that you intend to be fully active for many more years than that.
What clients want to hear next is reassurance about the team you have in place to take on more of your responsibilities. Reinforce how much confidence you have in your people. Within a year of your retirement, introduce your core team to prospects and clients, and highlight their achievements with the firm. Many CEOs prefer gradual transitions, and this requires thoughtfully explaining which roles you will retain for the longest period of time. That way, your team fully understands and can articulate these plans to others. Since more than one person may be in contention for the CEO role, try to clarify that choice as soon as possible, to avoid internal stress and bitterness.
Client prospects care when you’re going to retire. That’s a nod to your reputation. But it requires a careful and honest description of both how long you can provide your expertise and how well you have assembled, led, and nurtured a management team with even better skills than you could offer. You don’t have to wait for the question to come up before speaking to this.
Youngme Moon, Mihir Desai, and Felix Oberholzer-Gee discuss how much Uber is worth as it prepares to go public, before debating China’s controversial Social Credit system. They also share their After Hours picks for the week.
You can email your comments and ideas for future episodes to: firstname.lastname@example.org.
HBR Presents is a network of podcasts curated by HBR editors, bringing you the best business ideas from the leading minds in management. The views and opinions expressed are solely those of the authors and do not necessarily reflect the official policy or position of Harvard Business Review or its affiliates.
It has been a year since the #MeToo movement went viral. Since then, the Equal Employment Opportunity Commission (EEOC) has experienced a 13.6% increase in the number of sexual harassment charges it has received. The EEOC’s counterpart state agencies have seen even greater increases. While some business leaders have seized this moment to make important changes in how they address harassment in their workplaces, others do not yet see the urgency in addressing the problem. In fact, in a meeting we had last month with a group of senior HR directors, some of the most urgent questions were: “How do I make my CEO pay attention to this issue?” and “How do I convince my CEO that we need to invest sufficient resources in preventing harassment?”
In June 2016, the EEOC issued a first-of-its-kind report on harassment in the workplace. The suggestions and tips in that report still stand, but the past year has shown us just how difficult it is for HR directors, general counsel, compliance officers, and D&I directors to make the business case for harassment prevention to their leadership. Many of the people in these roles know—as we do—that stopping and preventing workplace harassment is not only a moral imperative, it is also sound corporate strategy.
In the past fiscal year the filing of sexual harassment cases by the EEOC more than doubled, and monetary damages paid by employers increased from $47 million to $70 million in EEOC cases. These statistics do not include the costs of sexual harassment cases brought by private plaintiff attorneys or other forms of harassment investigated or litigated by the EEOC or private attorneys, such as harassment as a result of race, national origin, religion, disability, or age. Adding the costs of these cases further increases the financial liability for companies that fail to prevent harassment.
Damage awards and litigation costs are not the only financial consequences of corporate failure to stop and prevent workplace harassment, though. Employees who are harassed, as well as those who work with harassed employees, suffer adverse physical and mental health consequences, resulting in absenteeism and higher medical costs. Harassment reduces the productivity of both harassed employees and the unit in which the harassment occurs. Harassed employees may leave if they are able to, and employees who witness unchecked harassment may also leave. Because almost 70% of harassment incidents are never reported to the employer, talented and highly-skilled employees may leave without employers knowing that their business has suffered as a result of workplace harassment.
Reputational harm can also be devastating to an employer’s business. Companies in which it is known (even without media coverage) that harassment occurs in their workplaces are less likely to attract talented employees and may lose customers and clients. If workplace harassment becomes public, the harm to the company’s reputation may be significant and long lasting.
For example, numerous companies — from Wynn Resorts to Fox News to Mike Isabella’s restaurant conglomerate to Uber — have seen stock prices, advertising revenue, sales numbers, and consumer loyalty fall as a result of negative harassment-related publicity. Boards of directors have faced shareholder derivative suits for failing to investigate and correct allegations of harassment. Some businesses, like Fidelity, have taken critical steps to correct and prevent harassment as soon as they have learned about it. Our hope is that other organizations and companies will begin to take proactive steps, before they find themselves in the press.
Unfortunately, as we heard at the HR meeting, many employers have still failed to implement the best and most effective measures to prevent workplace harassment. Traditional training that is focused on legal definitions and prohibitions of unlawful conduct is necessary but insufficient to prevent large judgments against a company and to prevent future misconduct. Written policies are often overly legalistic, not disseminated effectively, and poorly implemented. Typical corporate reporting and investigative policies and procedures lack crucial components that would make them most effective. Harassers, especially “superstars” within an organization, are often protected rather than punished, and individuals who report the misconduct of those employees may suffer unlawful retaliation. As a result, employees may be afraid to come forward and corporate leaders are unaware of the full extent of harassment in their workplaces.
To stop harassment effectively and to prevent its recurrence, employers need to create a culture of respect and inclusivity, where people feel safe when reporting misconduct, and where there are clear and immediate consequences for having engaged in harassment. Managers need to be taught skills regarding how to respond to harassing behavior in its infancy, before it rises to the level of illegal conduct, and how to respond when an employee makes a complaint. Non-supervisory employees need to be told what behavior is unacceptable in the workplace, and they must be taught skills on how to intervene when they observe harassing behavior. Leaders need to clearly and repeatedly set forth their values and expectations and hold people accountable when they contravene those expectations.
In its report, the EEOC issued a roadmap for such a proactive harassment prevention program. Sixteen months — and thousands of sexual harassment claims later — it’s clear how desperately such a roadmap is needed. Walking down this road will not just keep employees safe. It will also help businesses avoid the financial and reputational damage that comes with ignoring harassment prevention.
What working parent hasn’t felt guilty about missing soccer games and piano recitals? When there are last-minute schedule changes at work or required travel to a client site, it’s normal to worry that you’re somehow permanently scarring your little one.
But how does our work affect our children’s lives? About two decades ago, in a study that surveyed approximately 900 business professionals ranging from 25 to 63 years old, across an array of industries, Drexel University’s Jeff Greenhaus and I explored the relationship between work and family life and described how these two aspects of life are both allies and enemies. In light of the deservedly increased attention we’re now paying to mental health problems in our society, it’s worth taking a fresh look at some of our findings on how the emotional lives of children — the unseen stakeholders at work — are affected by their parents’ careers. Our findings help explain what’s been observed since our original research about how children are negatively affected by their parents being digitally distracted, also known as “technoference,” and by the harmful effects of stress at work on family life.
Most of the research on the impact of parental employment on children looks at whether or not mothers work (but not, until very recently, fathers); whether parents work full- or part-time; the amount of time parents spend at work; and the timing of parental employment in the span of children’s lives. Our research went beyond matters of time, however, and looked, in addition, at the inner experience of work: parental values about the importance of career and family, the psychological interference of work on family life (that is, we are thinking about work when we are physically present at home with our family), the extent of emotional involvement in career, and discretion and control about the conditions of work.
All these aspects of parents’ careers, we found, correlate with the degree to which children display behavior problems, which are key indicators of their mental health. We measured them with the Child Behavior Checklist, a standard in the child development research literature that has not been used in other research in organizational psychology. Unfortunately, to date, the specific effects of parents’ work experiences (not time spent at work) on children’s mental health has still not been a priority for research in this field. It should be, for this is yet another means by which work can have important health consequences. Here are some of the highlights of what we observed.
For both mothers and fathers, we found that children’s emotional health was higher when parents believed that family should come first, regardless of the amount of time they spent working. We also found children were better off when parents cared about work as a source of challenge, creativity, and enjoyment, again, without regard to the time spent. And, not surprisingly, we saw that children were better off when parents were able to be physically available to them.
Children were more likely to show behavioral problems if their fathers were overly involved psychologically in their careers, whether or not they worked long hours. And a father’s cognitive interference of work on family and relaxation time — that is, a father’s psychological availability, or presence, which is noticeably absent when he is on his digital device — was also linked with children having emotional and behavioral problems. On the other hand, to the extent that a father was performing well in and feeling satisfied with his job, his children were likely to demonstrate relatively few behavior problems, again, independent of how long he was working.
For mothers, on the other hand, having authority and discretion at work was associated with mentally healthier children. That is, we found that children benefit if their mothers have control over what happens to them when they are working. Further, mothers spending time on themselves — on relaxation and self-care — and not so much on housework, was associated with positive outcomes for children. It’s not just a matter of mothers being at home versus at work, it’s what they do when they’re at home with their non-work time. If mothers were not with their children so they could take care of themselves, there was no ill effect on their children. But to the extent that mothers were engaged in housework, children were more likely to be beset by behavior problems.
Traditional roles for fathers and mothers are surely changing since we conducted this research. But it’s still the case that women carry more of the psychological burden of parental responsibilities. Our research showed that taking time to care for themselves instead of on the additional labor of housework strengthens mothers’ capacities to care their children. And fathers are better able to provide healthy experiences for their children when they are psychologically present with them and when their sense of competence and their well-being are enhanced by their work.
The good news in this research is that these features of a parent’s working life are, at least to some degree, under their control and can be changed. We were surprised to see in our study that parents’ time spent working and on child care — variables often much harder to do anything about, in light of economic and industry conditions — did not influence children’s mental health. So, if we care about how our careers are affecting our children’s mental health, we can and should focus on the value we place on our careers and experiment with creative ways to be available, physically and psychologically, to our children, though not necessarily in more hours with them. Quality time is real.
Some of the worst corporate disasters of the past two decades were heralded by whistleblowers: Sherron Watkins raised the red flag internally at Enron, Cynthia Cooper let management know of major accounting problems at WorldCom, and Matthew Lee brought problems to his management team at Lehman Brothers. The whistleblowers weren’t able to halt their companies’ declines and—in some cases—faced punishment for calling attention to internal misdeeds. Looking at these examples, it would be easy to say that whistleblowers have little impact on how companies both conduct themselves and weather corporate storms. But that’s not the case.
In 2018, NAVEX Global, the leading provider of whistleblower hotline and incident management systems, provided us secure, anonymized access to more than 1.2 million records of internal reports made by employees of public U.S. companies. Our analysis revealed that whistleblowers—and large numbers of them—are crucial to keeping firms healthy and that functioning internal hotlines are of paramount importance to business goals including profitability. The more employees use internal whistleblowing hotlines, the less lawsuits companies face, and the less money firms pay out in settlements.
Our conclusions are in many ways counterintuitive to how many executives manage complaints. Many companies continue to ignore—or misuse—whistleblower hotlines, and most don’t know what make of the information that is provided through them. Even when firms want to support whistleblowers, managers don’t know what to make of reported level of internal reports. Are more internal reports of problems a signal of widespread troubles within the firm? Research on external whistleblowing events, by Robert Bowen, Andrew Call, and Shiva Rajgopal finds that more external reporting events is associated with increased future lawsuits and negative performance. Does this finding on external reporting hold true for internal reporting events? Or do more reports instead reflect employees’ trust in management and a communication channel that allows management to more effectively prevent public disasters before they occur?More whistles blown are a sign of health, not illness
We found that firms actively using their internal reporting systems face fewer material lawsuits and have lower settlement amounts than firms ignoring—or minimally using—similar information. While all firms are likely to have some frequency of issues, firms where these are reported early are more likely to address them before they become larger problems resulting in costly litigation.
We measured activity from the perspectives of employees and managers, assessing both the number of internal reports filed and the amount of information provided in each report. We also measured the number of times reports were accessed and reviewed by management. We found that a one standard deviation increase in the use of an internal reporting system is associated with 6.9% fewer pending lawsuits and 20.4% less in aggregate settlement amounts.
We also found that higher use of internal reporting systems is not associated with a greater volume of external reports to regulatory agencies or other authorities. This suggests that a higher volume of internal reports does not imply that problems at the company are more frequent or severe. Instead, internal reports indicate open communication channels between employees and management and a belief that issues raised will be addressed. At the same time, when employees do report externally, it reflects management’s failure to address issues internally.Types of firms that actively use internal whistleblower hotlines
While the use of internal reporting systems, proxied by the number of reports filed, has increased over time, how those systems are used varies substantially across firms and industries.
What types of companies are actively using internal reporting systems? We saw a few common characteristics in our research. Using an index developed by Lucian Bebchuk, Alma Cohen, and Allen Ferrell in 2009, we found that firms with more powerful management—e.g., firms with governance protocols that limit shareholder power relative to firm leadership—are less likely to actively use their internal reporting systems. Fast-growing companies are also less likely to use their internal reporting systems, as are firms that show signs of potential earnings misstatements. Firms that are more active in using their systems tend to be more profitable (as measured by return on assets) than firms that are less active users of their systems.
We found that companies that more actively use their internal reporting systems can identify and address problems internally before litigation becomes likely. Significantly, our analysis shows that a one-standard-deviation increase in the use of an internal reporting system is associated with 3.9% fewer pending material lawsuits in the subsequent year and 8.9% lower aggregate legal settlement amounts. Over a three-year period, a one standard deviation increase was associated with 6.9% fewer lawsuits and 20.4% lower settlement amounts. Avoiding lawsuits is important for reasons beyond just the direct financial costs of legal defense and settlements. Although settlement costs can often be in the hundreds of millions of dollars, the hit to brand reputation and stock price can easily exceed all other out-of-pocket expenses. We found that in addition to reduced legal exposure, firms that more actively use their internal reporting systems are typically more profitable and have been in business longer.What this means
In our discussions with compliance officers at firms, many executive leadership teams stated a “goal” to have zero reports. This is not hard to accomplish if you simply don’t make your employees aware of the system or comfortable using it. There is evidence that this is often the case: In 2014, Bruckhaus Deringer found that nearly 30% of managers in their survey reported that their company actively discourages whistleblowing.
Other executives seem to understand that having few or no reports signals a poorly used system, but they also seem to think that going beyond the industry average number reports is a sign that the firm has more problems than they should.
Our research provides strong evidence that neither of these assertions are true: high usage is more often a sign of a healthy culture of open communication between employees and management than a harbinger of real trouble. After all, all large organizations face a large amount of common, unavoidable, and unobserved problems. Internal reporting systems simply make those problems visible to management.
Managers should view hotlines as a critical component of traditional audit mechanisms and board of director meetings. The reports seem to be a valuable resource to identify and quickly address concerns arising within the firm. And regulators are on the hook, too. Given what we learned about how companies with strong internal reporting systems fair, regulators might rethink the recent prioritization of external over internal whistleblowing and provide greater incentives for companies to implement their own effective solutions.
Caitlin Rosenthal, assistant professor of history at UC Berkeley, argues there are strong parallels between the accounting practices used by slaveholders and modern business practices. While we know slavery’s economic impact on the United States, Rosenthal says we need to look closer at the details — down to accounting ledgers – to truly understand what abolitionists and slaves were up against, and how those practices still influence business and management today. She’s the author of the book, Accounting for Slavery: Masters and Management.
Stan Lee hated to see an idle artist. The renowned comic book writer and publisher, who died this week at 95, thought idle talent was bored talent, and bored talent was easy to lose to the competition. It also personally bothered him that the people in his employ might be scrambling to earn enough money. So Stan made sure to provide continuous employment, sometimes to the detriment of the company.
In one famous anecdote, Stan doled out more assignments than the company needed—and didn’t bother to tell boss Martin Goodman about the extraneous inventory. He stuffed the extra comic books into a closet, intending to use them when the time was right. When Goodman saw the closet, he ordered Lee to fire everyone in the bullpen. Lee followed his boss’s orders. But he still felt it was a mistake—he needed to assign the extra stories, he argued, in order to invest in his people.
I studied Lee for my book, Superbosses. As I explained in HBR, a superboss isn’t just a really good boss. They don’t just build an organization or surpass a revenue target; they identify, train, and build a new pipeline of talent. The way Jon Stewart’s Daily Show launched the careers new comedians, or Alice Waters launched the careers of new chefs. Through spotting, nurturing, and developing talent, superbosses — like comic book superheroes — have an outsized impact.
Keep talent busy was just one of the lessons I took from Lee’s example. A second, but equally important lesson, was don’t censor talent. Lee preferred to let his talent sort out the creative details. He remembered working on a comic strip that used the word pogo stick in the punch line. The editor felt that pogo stick wouldn’t resonate with rural audiences, and he instructed Lee to change the gag so that the punch line had the word roller skates instead. It deflated the joke, but Lee changed it anyway. The strip was eventually dropped, and Lee said, “this type of censorship, to me, is almost indecent.” When you hire an artist to do a job, you let them do the job. Lee elaborated, “It seems to me that if a person is doing something creatively, and he feels that’s the way it ought to be done, you’ve gotta let him do it.”
Lee put his words into action years later when the Hulk, a Marvel franchise, became the subject of a popular primetime television show. He was amazed to see how the creative team transformed the Hulk for this new medium, and he was glad to stay out of their way. “I learned a helluva lot about TV from Ken Johnson during the many discussions we had about how to best adapt The Incredible Hulk to television. The success of that show, under Ken’s direction, proves beyond any doubt how important it is to put creative projects in the hands of truly creative people.” Lee enjoyed being fairly hands off as a boss, and extended that courtesy even to younger staffers, who more-traditional bosses might have said were too green.
A third lesson I took from Lee’s example: give credit where it’s due. It sounds so straightforward, but in reality, it’s very rare. One way Lee gave credit was by creating a credits page, written in a chatty tone. The credits page was unique in comics; up until then the artists drawing and inking the panels had remained anonymous. The credits might read something like this: “Written with Passion by Stan Lee. Drawn with Pride by Jack Kirby. Inked with Perfection by Joe Sinnott. And lettered with a Scratchy Pen by Artie Simek.” He also talked about the staff frequently in his monthly newsletter The Bullpen Bulletin. These shout-outs occasionally changed or shaped the careers of the people in his department. For instance, in the middle of his career, artist Jack Kirby was nicknamed the “King of Comics” by Stan Lee, and Stan reported that he was the “artists’ artist.” To this day, Kirby is known as the King of Comics, or “King Kirby.” This kind of publicity was not only good for the artists, but made it possible for a young reader to become particularly devoted to their favorite artist. It branded certain artists as Marvel artists, enabled readers to feel another level of intimacy with the product, and allowed Lee to promote the careers and further the professionalization of the field, another passion of Lee’s.
Finally, Stan Lee’s example is a reminder to dream big. There’s no better way to motivate the best people. “We’re trying to elevate the medium,” he once said. “We’re trying to make [comics] as respectable as possible.” Lee felt that comic books had the power to make important social commentary, to be incisive and satirical and smart. He believed that a day would come when an intelligent adult wouldn’t be embarrassed to be seen walking down the street with a comic strip, and he constantly pushed toward that goal. He suggested that comics should be studied at the college level, saying, “If people are going to study movies, TV, opera, ballet, concert, sculpture, painting, and other media, they might as well study comic books because comic books are just as profound and strong a factor in shaping, and moving, and molding people’s thoughts.” He argued there was no reason comics shouldn’t be seen as viable art. That attitude drew the best artists to want to work with him.
Why is it easier to see the best solution to other people’s dilemmas than our own? Whether it’s about someone deciding to pursue a new job, or ask for a raise, or someone simply mulling over which ice cream flavor to choose, we seem to see the best solution with a clarity and decisiveness that is often absent when we face our own quandaries.
People have a different mindset when choosing for others: an adventurous mindset that stands in contrast to the more cautious mindset that rears when people make their own choices. In my research with Yi Liu and Yongfang Liu of East China Normal University in China and Jiangli Jiao of Xinjiang Normal University in China, we looked at how people make decisions for themselves and for others. We were interested in the process and quantity of information a decision maker uses when choosing for others versus choosing for the self. We wanted to know: Is more information searched in the process when people choose for others versus for themselves, and does the way they evaluate that information change based on whom they are choosing for?
To test our hypotheses, we performed eight studies with over a thousand participants. Throughout the series of randomized tests, participants were given a list of restaurants, or job options, or dating profiles — each with detailed information and then participants were asked to make choices for themselves or for someone else based on that information.
What we found was two-fold: Not only did participants choose differently when it was for themselves rather than for someone else, but the way they chose was different. When choosing for themselves, participants focused more on a granular level, zeroing in on the minutiae, something we described in our research as a cautious mindset. Employing a cautious mindset when making a choice means being more reserved, deliberate, and risk averse. Rather than exploring and collecting a plethora of options, the cautious mindset prefers to consider a few at a time on a deeper level, examining a cross-section of the larger whole.
But when it came to deciding for others, study participants looked more at the array of options and focused on their overall impression. They were bolder, operating from what we called an adventurous mindset. An adventurous mindset prioritizes novelty over a deeper dive into what those options actually consist of; the availability of numerous choices is more appealing than their viability. Simply put, they preferred and examined more information before making a choice, and as my previous research has shown, they recommended their choice to others with more gusto.
These findings align with my earlier work with Kyle Emich of University of Delaware on how people are more creative on behalf of others. When we are brainstorming ideas to other people’s problems, we’re inspired; we have a free flow of ideas to spread out on the table without judgment, second-guessing, or overthinking.
Upon reflection, these results should feel familiar. Think about the most recent time you asked for a raise. Many people are initially afraid to ask (employing a cautious mindset); however, these same people are often very supportive in recommending to others (such as their friends or colleagues) that they ask (employing an adventurous mindset). When people recommend what others should do, they come up with ideas and choices and solutions that are more optimistic and action-oriented, focus on more positive information and imagine more favorable consequences. Meanwhile, when making their own choices, people tend to envision everything that could go wrong, leading to doubt and second-guesses.
How can this research be applied? First, we believe that it suggests that everyone should have a mentor, or a blunt friend who can help people see and act on better evidence.
We should also work to distance ourselves from our own problems by adopting a fly-on-the-wall perspective. In this mindset, we can act as our own advisors—indeed, it may even be effective to refer to yourself in the third-person when considering an important decision as though you’re addressing someone else. Instead of asking yourself, “what should I do?” ask yourself “what should you do?”.
Another distancing technique is to pretend that your decision is someone else’s and visualize it from his or her perspective. This can be very easy when thinking of famous exemplars, such as how Steve Jobs would make your decision. By imagining how someone else would tackle your problem, people may unwittingly help themselves.
Perhaps the easiest solution is to let others make our decisions for us. By outsourcing our choices, we can take advantage of a growing market of firms and apps that make it increasingly easier for people to “pitch” their decisions to others. For example, people can have their clothes, food, books, or home decor options chosen for them by others.
Our research underscores a basic human desire: we want to feel like we’ve made a difference. We are wired for connection with others and an interesting part of making decisions for other people is that it is possible to have a bigger impact. Since managers and leaders are tasked with making decisions for others on multiple levels—everything from daily minutiae to personnel conflicts to long-term strategic planning—our results point the way to helping these employees find greater degrees of creativity, effectiveness, and fulfillment in their work.
Last month, a rebel attack in Beni, the epicenter of the ongoing Ebola outbreak near the eastern border of the Democratic Republic of Congo (DRC), once again halted the efforts of response teams working to contain the virus. With over 10 major episodes of violence since the outbreak was declared in August, insecurity and community mistrust has made it difficult to gauge the true extent of Ebola’s spread. Though the outbreak could still be limited, cases appear to be increasing — especially in Beni, where cases have doubled in recent weeks — with 80% of new infections arising among people with no link to “known transmission chains” (where everyone who is infected is known and you can track who has been exposed with some accuracy). This means that we might only be seeing the tip of an iceberg of hidden transmissions and the outbreak could spiral out of control and spread into neighboring countries. Given this danger, the current strategy for containing the disease needs to be adjusted.
Eastern DRC has been home to one of the deadliest and most intractable conflicts in modern history; over 50 armed groups are still active in the region. Originally formed to protect their communities, many of these rebel militias have become entangled in the messy web of politics, shifting allegiances, and underhanded mining deals that fuel the conflict.
This backdrop and the inability of the government or international agencies to assure basic safety, much less basic needs, has entrenched a distrust of formal institutions in the population. These dynamics have been made more complicated by the fact that DRC is supposed to hold elections in December that have already been delayed twice since 2016.
Given that outbreaks can grow quickly and exponentially, definitive action is needed now.
The current plan for stopping this outbreak is based on contact tracing (the identification and monitoring of people who were exposed to Ebola-infected individuals for the 21 days during which they may develop infection) and “ring” vaccination (immunizing these contacts and those close to them with an experimental Ebola vaccine). This approach efficiently contained an Ebola outbreak in western DRC just a few months ago but requires a comprehensive and precise understanding of who is infected and who their contacts are — something that necessitates having unimpeded daily access to their communities for months.
That has not been possible this time around: Areas affected by violence have been inaccessible for days at a time. Therefore, while contact tracing and ring vaccination should continue where transmissions can be tracked, mass vaccination of larger portions of populations should be considered in areas where that is not possible such as Beni, which has a population of about 230,000. Expanding vaccinations in this manner could immediately halt the spread of the disease.
While such a mass vaccination sounds ambitious, the World Health Organization (WHO) and others have executed much larger national campaigns in over 40 low-income countries, including DRC, where millions of children were immunized against polio or measles within a single week. These campaigns were also implemented successfully during conflicts in Somalia, Afghanistan, and Liberia. Though a mass-vaccination effort targets an entire population, it need only reach the proportion required for “herd immunity” — immunizing enough people so that the virus cannot spread. Early studies of the Ebola vaccine found that it might be possible to achieve herd immunity by vaccinating as little as 42% of the population.
To be successful, the mass vaccination effort would require the buy-in of the communities and the Ebola response teams being able to securely access the areas in question for the day or two it would take to immunize everyone. Promisingly, a recent study showed that even communities with high levels of distrust appear to be open to vaccination.
Anthropologists are already on the ground working tirelessly to engage community leaders and armed groups. In areas not amenable to outreach, a neutral “white helmet” security force, ideally drawn from the African Union or other countries without past involvement in the DRC conflict, should be deployed with the sole mission of securing vaccination efforts. It should be made abundantly clear to the population that this force has no allegiance to any political or institutional actors and is there only to deter violence against responders. At the end of the day, communities and militias do not want their loved ones to die from Ebola and would respect such a presence if they were reassured its mission is strictly medical.
Mass vaccination will also require an adequate supply of the Ebola vaccine. Its manufacturer, Merck, has committed to maintaining a supply of 300,000 doses at all times. Doing so could become difficult if vaccination efforts are expanded, but at the current juncture, the number of people who would need to be vaccinated in order to stunt the outbreak still appears to be within the range of existing stockpiles. Nonetheless, production of the vaccine should be increased and the bottlenecks to doing so should be assessed and cleared to ensure an adequate supply.
It’s true that the Ebola vaccine is still experimental and its health risks are not yet fully known. However, for people living in areas where everyone who is infected is not known, the heightened risk of unknowingly contracting a fatal Ebola infection may, at this point, outweigh the potential danger posed by the vaccine.
After the West African Ebola epidemic spiraled out of control, many wondered why more aggressive measures were not taken sooner. We may be at a similar make-or-break point in this outbreak.
A small percentage of U.S. companies — including PwC, Fidelity, and Aetna — have stepped up to help their employees cope with the education loans weighing them down by offering them cash to help them reduce their debts. While I applaud them, one downside of their approach is simply giving their workers cash raises their income taxes, diminishing the impact of their efforts.
To address this dilemma, Abbott, where I lead Human Resources, took a different approach. We introduced a program last August to contribute 5% of pay to a tax-deferred 401(k) plan for full- and part-time workers who direct at least 2% of their pay toward paying down their student loans. The Internal Revenue Service reviewed — and ruled favorably on — the 401(k) plan structure we came up with to make this possible.
In addition to the tax issue, our program — called Freedom 2 Save — helps tackle another problem: two-thirds of millennials aren’t saving for retirement. For every decade a person delays saving for retirement, the amount he or she ultimately needs to save doubles. Unless they start putting aside money now, many graduates will have to work into their 70s.
Over 10 years, an employee with a starting salary of $70,000 could earn $54,000 in his or her 401(k) account — assuming a 6% annual return and yearly pay increases of 3% — without contributing a dime toward retirement. Thanks to the power of tax-deferred investment returns, that amount could grow to hundreds of thousands of dollars by the time he or she turns 60.
Freedom 2 Save offers Abbott a number of benefits. We believe that it will easily pay for itself by helping us retain employees — a big deal in an era where millennial turnover alone costs businesses more than $30 billion every year. (Ninety percent of young workers say they’d commit to a company for five years if it gave them some loan relief, and workers with student debt stay at their jobs 36% longer if employers help pay off loans.) In addition, it will help take a load off of workers burdened by debt who say the resulting stress negatively impacts their job performance.
Americans are carrying a record $1.5 trillion in student loan debt, a sum that has more than doubled in the past decade and now surpasses our nation’s level of credit card debt. The typical graduate leaves school owing about $40,000. Many face larger burdens. About 2.5 million Americans have debt loads in excess of $100,000.
So far, 400 Abbott employees have signed up for the Freedom 2 Save program. Once it is well-established, we anticipate thousands will take advantage of it.
Although we’re the first company to work with the IRS to structure a program like this, it’s possible that more companies will be able to do something similar with time. (An employer group has asked the IRS commissioner to expand the ruling it gave us to all companies.)
There are no easy or universal solutions to America’s student debt crisis. But as employers, we are in a unique position to come up with innovative benefits that have a tangible positive impact on employees’ lives. By increasing our ability to recruit and retain the best people, such efforts are highly worth it.
Mark was always one of the smartest kids in his class. He’s done well in his career, but when he checks Facebook, he sees people he outperformed at school who have now achieved more. Likewise, there are colleagues at his firm who have leapfrogged him. Sometimes he wonders, “What am I doing wrong?”
Sound familiar? You might relate to Mark yourself, or have an employee or loved one who struggles with similar feelings. Raw intelligence is undoubtedly a huge asset, but it isn’t everything. And sometimes, when intellectually gifted people don’t achieve as much as they’d like to, it’s because they’re subtly undermining themselves. If you’re in this situation, the good news is that when you understand these foibles you can turn them around. Here are five I’ve seen smart people particularly struggle with:
1. Smart people sometimes devalue other skills, like relationship building, and over-concentrate on intellect. Very smart people sometimes see their success as inevitable because of their intellect, and don’t see other skills as important. For example, an individual who finds workplace diplomacy difficult might write this off as an irritation rather than as a core skill required for their role. Similarly, they might see it as critical for a secretary to be personable, but not an executive. Therefore they don’t invest time and effort in developing these skills.
These views don’t come out of nowhere. Most people have a natural bias towards wanting to capitalize on their strengths and, conversely, would prefer to avoid thinking about areas in which they’re not naturally as strong. Bright kids typically receive a lot of reinforcement throughout their early lives that their intelligence is valuable. They grow up being told they’re smart, and during their schooling, experience that success comes more easily to them than to others. It’s easy to understand why, as a result, they would continue to focus on their intellect as a adults.
But in most workplaces, you need more than raw intelligence to get ahead. And only focusing on your greatest strength, rather than also addressing your weaknesses, tends to be self-sabotaging.
Solution: Use your strengths to overcome your weaknesses. If you’re good at learning you can simply learn the skills that don’t come as naturally to you. You don’t need a personality makeover, you just need a game plan and a genuinely constructive attitude. For instance, identify three specific workplace diplomacy behaviors that would improve your success in that area.
2. Teamwork can be frustrating for very smart people. When someone grasps concepts quickly and has high standards for their own performance it can create difficulties when working with others who take longer to process information and pick up concepts. If a person felt held back at school by being in a class with less smart kids, this frustration with teamwork can develop early — you know what this feels like if you routinely did most of the work on group projects, or got scolded for daydreaming during a class that was moving too slowly for you. These feelings can get re-triggered throughout life. When people develop an emotional raw spot as a child, they often have outsized internal reactions when that raw spot is rubbed in their adult life.
Smart people also sometimes find it difficult to delegate because of a sense they can do a task better (regardless of whether this is actually true.) This is especially likely for those who have a perfectionist streak.
Solution: Be self-compassionate about your internal reactions and understand where they come from, but also learn to genuinely appreciate what diverse minds bring to a team.
3. Smart people often attach a lot of their self-esteem to being smart, which can decrease their resilience and lead to avoidance. If a lot of your self-esteem rests on your intelligence, it can be very difficult to be in situations that reveal chinks in your armor. That might be working with people who are even more skilled or intelligent, or receiving critical feedback, or taking a risk and failing. Any situation that triggers feeling not- smart is experienced as highly threatening. The smart person may even seek to avoid those situations, which ultimately holds the person back.
Solution: Take an objective view of the benefits of working with people who are, in some respects, smarter than you. If you’re surrounding yourself with smart people, you’re doing something right. Remember, iron sharpens iron. Develop relationships with people who you trust to give you help constructive feedback. The more you become accustomed to receiving critical feedback from people who believe in your overall talents and capacities, the easier it will become.
4. Smart people get bored easily. Being smart is not exactly the same as being curious, but if you have both these qualities you might find yourself becoming easily bored with executing the same behaviors over and over. Some types of success stem from creativity, but other types come from becoming an expert in a niche and performing a set of behaviors repeatedly. If you’re smart, curious, and have a love of learning, you might find you quickly lose interest in anything once you’ve figured it out. The execution side of performance might bore you, and you’d rather constantly be learning new things. This can end up being less lucrative than finding a niche and repeating the same formula, but that might seem too boring or unchallenging to you.
Solution: Try taking a 30,000-foot view of when it’s worth tolerating some boredom to collect easy wins when it comes to your overall success. Instead of attempting dramatic change, decide when tolerating short periods (a few minutes or hours) of boredom could have a very beneficial impact on your success. For instance, devoting 5 hours a week to an activity that’s monotonous but lucrative. Additionally, make sure you have enough outlets for your love of learning across the various domains of your life, including your work, hobbies, physical fitness, understanding yourself etc.
5. Smart people sometimes see in-depth thinking and reflection as the solution to every problem. Bright people are accustomed to succeeding through their thinking skills, but can sometimes overlook when a different approach would be more beneficial. For example, the smart person might attack every situation by trying to think it to death (over-researching every decision and ruminating over every mistake) when other approaches would be more fruitful.
Solution: Notice when thinking becomes an unhealthy obsession. Consider when strategies other than thinking are more likely to result in success. Experiment with taking breaks to get unstuck, and allow yourself to learn by doing rather than through exhaustive advance research. Expand your range of skills for reaching insights so that you’re not the person who sees every problem as a nail because their only tool is a hammer. Finally, whenever you find yourself ruminating (doing negatively toned overthinking), disrupt it by doing a few minutes of an absorbing activity (such as a puzzle). This can be a surprisingly effective strategy for breaking out of negative thinking.
Which of these five patterns do you identify with the most? Try rank-ordering them. Are there colleagues or other people in your life who seem to fall into these traps? Try to let go of any sense of shame or judgment — it’s not necessary or useful for overcoming these habits. For any of the tendencies you personally relate to, know that even longstanding and deeply psychological patterns can be turned around with the targeted, practical, problem-solving approach I’ve outlined here.
We bring you three stories about parental leave, from listeners whose experiences with it changed them, for better or for worse. They talk about having to fight for more time off, go back to work before they were ready, care for sick babies, and try to hide their exhaustion and stress. Ultimately, they’re stories about how inadequate leave policies hurt families and companies.
The challenge of running a sustainable enterprise has taken center stage among shareholders. Last year, for example, Russell 3000 companies received 144 shareholder proposals requesting action on social and environmental issues. Meanwhile, in a survey of 89 institutional investors by Callan, 43% of respondents said they incorporate sustainability factors into their investment decisions — up 21 percentage points from 2013.
The dilemma for directors, however, is determining what aspects of sustainability, or ESG performance, should have priority — and should be linked to pay incentives. The UN, for example, has outlined 17 broad Sustainable Development Goals for 2030. Progress is measured with 169 targets. The goals include eliminating poverty, offering affordable and clean energy, achieving gender equality, protecting ecosystems, increasing responsible consumption and production, and much more. Meanwhile, a number of business organizations have created their own sustainability measures, including the Sustainability Accounting Standards Board, Sustainalytics, Bloomberg, and MSCI. And at many companies, sustainability efforts are measured with well over 10 internal metrics.
Compensation committees often start by tying bonuses and long-term incentives to goals related to compliance and risk management. That approach pleases some stakeholders, but it may put the focus on issues far removed from the company’s core mission. For example, measures of regulatory fines gauge only a company’s environmental “hygiene,” which may reduce risk but doesn’t incentivize executives to increase the company’s broader environmental impact.
What’s a better approach? Have bonuses depend largely, or solely, on executives’ success in tapping big strategic opportunities related to sustainability. By pushing the top team to go on the offense strategically, this change brings the work of advancing sustainability from the periphery of the business to its heart.
Though not all businesses today are in a position to implement big strategic initiatives based on sustainable thinking, the opportunities to pursue them are growing fast. According to a survey by the UN and Accenture, 63% of executives believe that sustainability will cause major changes in their businesses in the next five years. And if that shift ends up determining which companies thrive in the future, then it’s likely that incentive goals must apply to bold business opportunities.
One major heavy-equipment manufacturer, for example, has 14 sustainability goals. Only one of them, however, stands out as big and strategic, with the prospect of significant returns: remanufacturing products and components, which can save customers money, extend product life cycles, and reuse materials. A logical measure for this goal — a measure to tie incentives to — would be growth in revenues from remanufacturing and rebuilding, or the percentage of revenues or profits derived from both.
By limiting the number of sustainability goals in its incentives, companies can wield huge power to change leaders’ behavior. An auto executive’s bonus might depend on advancing the company’s electric vehicle, connected and autonomous vehicle, or ride-sharing business. A financial services firm’s executives might be rewarded for the percentage of affordable capital that’s allocated to worthy sustainable projects, such as renewable energy or sustainable agriculture.
Boards should demand entirely new kinds of strategic thinking from management, the kind of thinking that not only makes the company more sustainable but also aids suppliers and customers in becoming so. If you’re a food company, can you produce healthy products that address the growing rates of obesity, diabetes, and heart disease? If you’re in agriculture, can you devise rice strains that grow in less water and yield more for farmers? If you’re in health care, can you improve care quality for the employees in the companies you insure?
To take this approach to heart, boards should ask several questions:
- Where does the company have a unique opportunity to differentiate?
- Does the company have the core competencies, or can it acquire them, to take advantage of the opportunity?
- Is there an adequate return on investment over the long term to justify moving forward?
As a sign that many executives are thinking along just these lines, a recent McKinsey survey of retailers and consumer goods manufacturers found that almost half of those undertaking sustainability initiatives were pursuing new business or growth opportunities.
That doesn’t mean companies should abandon traditional strategies for reducing costs, mitigating risks, and preserving a “license to operate.” And when those strategies are core to the business, incentive plans should link bonuses to fulfilling them. If you need water for beverages — think Coca-Cola or PepsiCo — a bonus for preserving water sources would be strategic. If you need ore bodies to mine — think Rio Tinto or Teck Resources — a bonus for top-tier environmental protection would make sense. If you need to demonstrate appropriate labor practices — think McDonald’s, Dunkin’, and Nestlé — a bonus based on mitigating risks might be critical (as would a provision for clawing back bonuses if the risks are not discovered until after harm is done).
Directors should, of course, continue to monitor and disclose many other aspects of ESG performance. In fact, they should insist on seeing ESG metrics in corporate or individual scorecards — assuring that executives act responsibly, mitigate risks, and comply with regulations. The compensation committee can then use its discretion to adjust pay after the fact for sustainability performance in these areas. Alternatively, sustainability performance can be addressed in the objectives of individual executives or business units, rather than being used in company-wide objectives.
As with all targets for executive incentives, directors need to choose carefully to avoid unintended consequences. Do new targets motivate undesirable trade-offs? If executives hit sustainability targets at unacceptable cost, safeguards are needed to make payouts contingent on meeting core financials. Directors should remain focused, however, on isolating a limited number of sustainability goals that deliver the most value. And that value should be of such scale that it will energize executives to go after it, in turn yielding the biggest reward for shareholders, other stakeholders, and society.
In any team or organization, some individuals are consistently more likely to come up with ideas that are both novel and useful. These ideas are the seeds of innovation: the intellectual foundation for any new products and services that enable some organizations to gain a competitive advantage over others. However, organizations are often unable to put in place the right processes, leadership, and culture to turn creative ideas into actual innovations, which causes even their most creative employees to underperform. This mismanagement of innovation is further exacerbated by the fact that managing creatives tend to require special attention and consideration. Indeed, decades of psychological research suggests that creative people are quite different from others when it comes to personality, values, and abilities. In light of that, here are eight evidence-based recommendations to get the most out of your creative employees and to stop them from underperforming:
- Assign them to the right roles: No matter what industry or job people are in, they will generally perform better when you can maximize the fit between their natural behavioral tendencies and the role they are in. This is why the same person will excel in some roles but struggle in others. Thus, if you want your creative employees to do well, you should deploy them in tasks that are meaningful and relevant to them. In fact, research shows that while creative people are generally more likely to experience higher levels of intrinsic motivation, they also perform worse when not intrinsically motivated. There is therefore a higher cost and productivity loss when your disengaged employees are creative; but the benefits of engaging them are also higher.
- Build a team around them: It’s been said that there are “no statues of committees,” but innovation is always the result of coordinated human activity — people combining their diverse abilities and interests to translate creative ideas into actual innovations. Just try managing a team full of creatives and you will see that very little gets done. In contrast, if you can surround your creative employees with good implementers, networkers, and detail-oriented project managers, you can expect good things to happen — such are the benefits of cognitive diversity. Whether in sports, music, or regular office jobs, creatives will thrive if they are part of a team that is able to turn their ideas into actual products and services, freeing them up from implementation.
- How Senior Executives Find Time to Be Creative Leading a Brainstorming Session with a Cross-Cultural Team You Can Teach Someone to Be More Creative
- Reward innovation: You get what you measure, so there’s no point in glorifying creativity and innovation if you then reward people for doing what they are told. Paying lip service to innovation will frustrate your creative employees, who will feel underutilized if you show indifference to their creative ideas and imaginations. Conversely, if you actually incentivize people to come up with new ideas, to think outside the box, and to devote some of their energy to improving existing processes, products, and services, you will notice that even those who are not naturally creative will attempt to do things differently and contribute to innovation.
- Tolerate their dark side (but only up to a point): Everybody has a dark side, defined as his or her undesirable or toxic behavioral tendencies. Research has shown that creative individuals are naturally more irritable, moody, and hard to please. Furthermore, because of their imaginative disposition, creatives may come across as odd or eccentric, and they often specialize in making simple things complex, rather than the other way around. However, these non-conformist and individualistic tendencies also provide some of the raw ingredients for creativity: it is usually those who are likely to question the status quo and defy existing norms and traditions that push the most for innovations to happen. As the artist Banksy recently posted on Instagram when he made one of his art works self-destruct at a recent auction (just after the buyer spent over $1.3 million on it): “The urge to destroy is also a creative urge”. In contrast, if you only hire people who are well-behaved and do what you tell them, you can forget about innovation! However, it should be needless to say, no matter how creative employees are, there is no excuse for misbehaving or harming other employees and the organization.
- Challenge them: Few things are more demotivating than being asked to do very easy and unchallenging work, and this is especially true when employees are creative. Data show that in the U.S., 46% of employees see themselves as overqualified for their jobs. This makes it critical to push your employees beyond their level of comfort. Failing to do so will significantly increase disengagement, turnover, and poor psychological health. Investigating this issue, researchers found that situational factors can mitigate these effects. Organizations that provide their most talented people with personalized development plans and mentoring opportunities, and that promote a culture of support and inclusion, will benefit from increased creative performance. Providing such opportunities may be a heavy lift for some organizations, yet failing to do so will risk losing their creative talent to competitors.
- Apply the right amount of pressure: It is often said that necessity is the mother of invention — if a problem must be solved within a given timeframe, it probably will. Yet research shows that working in high-pressure environments can harm an employee’s well-being and in turn reduce their productivity. Yet, when it comes to maximizing one’s creative output, applying some pressure can be a good thing: indeed, scientific evidence indicates that there is an optimal amount of pressure to drive creativity. Not enough pressure will lead to a lack of motivation, and too much of it will create stress that inhibits one’s ability to think creatively. Managers must get this balance right and induce a moderate (optimal) amount of pressure by first defining resource boundaries and expected output, and then clearly communicating their support for the creative process.
- Promote cognitive diversity: When organizations look to hire new employees, their “fit” with the culture is often an important selection criterion, and there is good reason for this (see again point 1). Evidence suggests that employees whose psychological profile and skills match the organization’s culture and mission are more motivated and productive. Yet, if organizations are pursuing innovation, they should in fact promote cognitive diversity amongst their teams. Specifically, leaders should build teams whose members have compatible, yet significantly different, psychological profiles. This is because teams that are cognitively diverse are more likely to view problems differently and produce better decisions. This rule also applies to leaders: if you want leaders to drive any sort of transformation or entrepreneurial activity, you are better off hiring moderate misfits than perfect fits!
- Be humble: With narcissism on the rise, humility is an underrated virtue in today’s society. Narcissists often become leaders thanks to their charisma, charm and confidence, which helps them attract followers and persuade others that they are more competent than they actually are. Yet such leaders are rarely more creative, even when they manage to come across as innovative to others. In fact, leaders who want to produce a creative team should practice humility. A recent study found that a leader’s humility was a significant predictor of a team’s creative output, as they evoke feelings of safety, trust, and cooperation among their followers. To practice humility, leaders should become more willing to publicly admit their mistakes and limitations and become more forthright in displaying appreciation and giving credit where it is due (Elon Musk should take notes).
As individuals are increasingly turning to self-employment and entrepreneurship, organizations are at risk of losing the talent needed to drive growth and fend off disruption. The ability to successfully manage and retain creative talent is therefore critical. While stories of innovative and revolutionary breakthroughs speak of their organic and mythical origins, the reality is that turning creative ideas into an actual reality is hard — and it requires great leadership. Fortunately, there is enough evidence to help leaders develop an effective strategy to not just manage, but also leverage, their creative employees.
When the FDA issued its first approval for a gene therapy for an inherited disease nearly a year ago—a cure for a type of blindness—it was heralded as breakthrough, a moment decades in the making. With dozens of other genetically engineered therapies moving through clinical trials, the long-promised era of personalized, gene-based medicine seemed to be at hand.
But there was a catch: the one-time treatment, Luxturna from Spark Therapeutics, costs $850,000.
In a recent Goldman Sachs research report about the promise of gene therapies, analysts asked a question that gets to the heart of a growing dilemma for the healthcare sector: “Is curing patients a sustainable business model?” As this first wave of genetic treatments hits the market, industry leaders face a stark choice. These therapies could save or change lives, but they come at unprecedented cost. Indeed, Novartis recently said that its life-saving gene therapy for spinal muscular atrophy would be “cost-effective” at $4 million to $5 million – hinting at the pricing the company has in mind. As the use of these expensive drugs grows, there seems to be no way traditional insurance models will be able to pay for them without breaking the bank or requiring patients to assume a big chunk of the cost.Insight Center
- The Future of Health Care Sponsored by Medtronic Creating better outcomes at reduced cost.
Consider what happened to Amsterdam-based UniQure. In 2016, the company had to pull its gene therapy for potentially fatal fat-processing deficiencies from the E.U. market. With a $1 million price tag, limited data on efficacy and just 700 potential patients in Europe, health systems were unwilling to pay for treatment. Biopharma companies now have 58 gene therapies and gene-modified cell treatments in Phase III clinical trials, with about 35 expected to be FDA-approved by 2022, out of about 1,000 candidates in the total pipeline. These new therapies could face a similar fate if prices can’t be brought down. Something has got to give.New business models
Our research on major innovations finds that when disruption occurs, technologies don’t replace technologies; systems replace systems. Put another way, product classes with fundamentally new performance profiles can’t be dropped into an existing business model and expected to work. The business model — how value is created, captured, and delivered — needs to be reinvented to support the new proposition.
When it comes to gene therapies, there’s a growing recognition that harnessing breakthrough science to cure diseases simply isn’t enough. Some industry innovators are creating novel payment models that share the risks and costs in ways that may help jump-start new markets and cure more patients. Some of these new models are already being rolled out — and others are more theoretical. But they illustrate the levers companies can pull in order to make therapies more affordable and accessible.
As Spark CEO Jeffrey Marrazzo says, “We are striving to bring the same level of innovation to the delivery of, and access to, this product” as the company did in developing the treatment. To this end, Marrazzo has led an effort to develop a new business model under which Spark gets paid only if the cure is successful and endures over the long term, and payments for successful treatment are made in installments. Such a model will be more attractive to insurers as it eliminates the risk of paying for failed treatment, and it benefits Spark by increasing insurers’ willingness to pay for the expensive therapy. In addition, Spark will issue rebates to the payer if a certain measured outcome—in this case quality of vision—is not reached over time, with markers set at 1 month, 3 months, and 30 months.
Spark has entered into such a contract with Harvard Pilgrim Healthcare and is also negotiating with the Centers for Medicare and Medicaid Services (CMS) to put in place a model where payments can be spread out over years and only continue if the cure appears to be permanent.New financial instruments
But such value-based models may not be enough. Part of what makes the economics of curing patients challenging is that the average U.S. consumer switches health plans every two or three years, due to job changes or their employer switching insurance plans. No payer wants to foot the bill for a lifelong cure only to lose the patient and let the next payer “free ride” on that investment.
Enter the concept of a “HealthCoin,” an approach that incentivizes insurers to reimburse for preventative measures and costly one-time treatments by generating credit that they can trade like a bond. At scale, and perhaps enabled by blockchain technology, HealthCoin solutions could help “securitize” measurable improvements in health, providing a transparent way to value small things like effective behavior change and big things like curative gene therapies. That value can then be passed from one stakeholder (such as an insurer) to another.
The solution was first proposed in a 2016 paper by University of Washington researcher Anirban Basu, with Pfizer researchers Prasun Subedi and Sachin Kamal-Bahl, as a way for ensuring that payers can capture the value they create.
For instance, the authors suppose, what if a genetic cure for Type 2 diabetes was developed? “The annual medical and indirect costs associated with the prevalent cohort of diabetes are approximately $218 billion in the United States alone,” the authors write. To overcome the free-rider problem—where an insurer could wind up covering the full one-time cost of a cure for a patient who then moves to another payer—the new payer would be required to purchase the HealthCoin of the patient. But since that bond would still retain value over years, they could resell the HealthCoin at a later date, recouping most or part of the cost.Annuity-based models
Other payment systems are even more theoretical, though inspired by existing related models. For instance, consider the true case of Alex, a 30-year-old professional living in Boston. Recently, Alex used the 23andMe service for an analysis of his DNA and the test found an elevated genetic risk for Alzheimer’s. “This is a terrible, scary disease,” Alex said. Knowing what he now knows, Alex started donating money to a foundation supporting Alzheimer’s research, in the hope that a cure is found by the time he might need it later in life.
This willingness to pay well in advance of need leads to the idea of an annuity-based business model. People in their 30s or 40s could pay small monthly premiums in order to fund development of new treatments, and if such therapies prove successful, they’d collect dividends, not in the form of preferential access to the therapies but as an impact investor, like those who invest in cleantech companies.
Such a model might be a hybrid of condition-specific “venture philanthropy” funds (like the Juvenile Diabetes Research Fund’s T1D Fund, which invests in products and therapies for treating Type-1 diabetes) combined with rare-disease risk pools in single-payer systems. In Canada and the UK, for instance, the Canada Drug Insurance Pooling Corporation and the UK Cancer Drug Fund spread the impact of high-cost drug claims across all payers while also raising money from donors and dedicated government funding.
It’s unlikely that there will be a one-size-fits-all business model for curative gene therapies; the particulars of each drug, disease, patient profile, and health system will determine the types of innovation required to get transformative therapies to patients in need. But for the genetic revolution to truly pay off for patients as well as biopharma companies, leaders must put their innovation horsepower into creating new business models while they develop and test the therapies themselves.
It finally happened: You got the buy-in to launch a (much-needed!) working parents’ network in your organization. You’ve sent out the blast announcement and secured a small budget. The kickoff cocktail party drew a crowd of parents eager for advice — and curious about this new resource. You’ve done everything needed to get this thing up and running. But as the energy and excitement from that first event fades, you’re left wondering: Now what?
And you’re not alone…because if you’re spearheading the effort to build a working parents’ group, two things are dead-certain:
1) The work you’re doing is important, necessary, and welcomed; and
2) There’s no template for it. No playbook, no best practices, no roadmap to success.
As a full-time consultant on working-parent issues, I’ve seen this dynamic play out time and time again. At their start, corporate working-parent affinity groups are greeted with enthusiasm. But what these groups should be doing longer-term — what value they should be providing their members, how their leaders should steer and contribute to the effort, and what types of events and services they should offer — is frustratingly hard to see, or agree on. As a result, network momentum — and credibility — can fizzle out quickly. As one of my clients, a VP in a technology firm, told me recently, “Getting the parents’ group launched was easy. But now our meetings consist of working moms and dads sitting awkwardly in a conference room, talking about how hard it all is. There’s so much goodwill, but nobody really knows how to make this thing work.” And when the working parents’ network itself isn’t working, it sends an unintended, negative message: This organization and working parenthood don’t go together.
Fortunately, there’s a fix that any network leader, in any sized company, and in any industry, can use: A set of simple, practical techniques and approaches that can help turn your working parents’ network into an asset — one that improves overall morale and retention, and that provides tangible, practical benefit to individual employees, too. Take the following steps before and after your network is launched, and you’ll develop a network with a large following and with powerful, positive impact.
Build up from what works. Don’t spend time intuiting and hypothesizing what the network should do; scale up what’s already working. Every organization has an existing working-parent network — organic and unseen, perhaps, but functional. Maybe there’s an email chain through which new parents in the marketing department swap out gently used baby gear, and maybe Mary over in finance has a reputation as an “on top of it” mom — and ends up mentoring and informally coaching a disproportionate number of colleagues as a result. In ID-ing these kinds of under-the-radar peer-to-peer relationships, you’ll discover a lot about what employees want and need, how those needs can be met, and who can help meet them. This helps you build an agenda, or plan of action based on a proven approach. Make that email chain an Intranet page or Slack channel, available to all working moms and dads throughout the company. And then rope Mary in as a featured speaker at an early network event — and ask for her ideas on where you should focus future programming.You and Your Team Series Working Parents
- How Working Parents Can Feel Less Overwhelmed and More in Control How Busy Working Parents Can Make Time for Mindfulness The Best Ways Your Organization Can Support Working Parents
Be assertively inclusive. Working parents come in all packages. They’re male, female, biological, adoptive, gay, straight, from every conceivable background, and from all parts and levels of the organization. And as network lead it’s your job to make sure that every single one of those parents gets the message, loud and clear, that “You are welcome here. This if for you.” Start by ensuring the group’s leadership is demonstrably diverse; prospective members will want to “see themselves” in the network’s composition. Make sure to keep communications demographically neutral: In emails, for example, specify that “this group/seminar is open to every interested working parent at [organization name].” And don’t be afraid to get personal: walk down the hall and invite that single, adoptive dad of a 16-year old to join you at the group’s next meeting. Remember: The broader and deeper your network is, the stronger it will be.
Align it to the organization’s mission — and DNA. At Kramer Levin, a leading law firm, the Working Parents Affinity Group features seminars on how to navigate legal issues important to new parents, like drafting a will. At Dana-Farber Cancer Institute, the “mission of the Working Parents Group is to improve conditions for the working parent” — just as the mission of Dana-Farber itself is to improve conditions for everyone touched by cancer. In these organizations, the working parents’ groups feel like natural and essential outgrowths of core operations. They’re easy for working parents to align themselves to and for senior leaders to get on board with.
Keep your figureheads relatable. In an effort to generate maximum visibility and “street cred” for a new network, you may have enlisted a working mother or father at the very top of the organization to serve as public face of the effort, or to speak at an early event. But if that person makes an enormous amount of money, has a large in-office team and three nannies on call at home, they’re going to be hard for most employees without those resources or advantages to identify with. Try tapping a broader pool of sponsors and speakers, ones who can address the day-to-day challenges most of your parent-colleagues are living. If you are fortunate enough to have the advantage of a C-suite supporter, help sensitize him or her to what’s really on other parents’ minds: Finding good day care, being able to work from home when their child is sick, figuring out how to save for college.
Have a curriculum that puts parents in control. At the network’s outset, and at the beginning of each year following, have a clear view of what you want members to learn — and be able to do for themselves. Whether it’s “to better manage time,” or “find greater flexibility,” or any other key working-parent skill, organize your events and programming around teaching it. Without that focus and narrative thread, the network’s activities risk becoming disjointed; you may end up with a “grab bag” of events and activities, each of which seemed like a good idea at the time, but which together don’t provide the punch of a more curated, planned-out effort.
Use internal experts and select “friends of the firm” as your faculty. The best way to create a rich and relevant curriculum on a limited budget? Use resources on hand. Have Rob from finance lead a seminar on tax-law changes that affect working parents, or on how to set up a college savings account. Ask someone on the IT support team to do a session on “the best apps and tech hacks for parents and caregivers.” Ask the outside law firm who your organization does a lot of business with to send over a Trusts & Estates partner to speak about how to set up wills and life insurance trusts. Scope the range and depth of expertise around you and bring it to bear for your membership.
Stay in the solutions frame. Working parenthood can be overwhelming, and it’s a natural tendency for working mothers and fathers to connect over — and take comfort in — comparing notes about challenges and pain points: Exhaustion, difficulties with their kids’ schools, long to-do lists, lack of flexibility. But as network lead, your job is to help move people forward: To help them find the ways to cope, to effectively manage through what they’re facing and to feel more empowered and positive while doing it. In other words, your job is to keep the network events, dialogue and members in the “Solutions Frame.” Do so by focusing group discussions — whether in person or online — around alternate approaches, hacks, and fixes. Start a network email thread on “best advice for back-to-school season,” or organize a group discussion on “effective ways to talk to your boss about flexibility.” You’ll be unearthing specific, actionable advice that helps fellow parents find new ways to handle common challenges.
Use it to help amplify other resources and benefits. It may be HR’s job to provide and manage your organization’s benefits offerings — parental leave, flexibility programs, family health care plans, and the like — but it’s the network’s mission to help keep those benefits accessible and top-of-mind. Hold a panel session for expectant fathers about what taking parental leave really involves from men who have already taken it. Lucky enough to have corporate back-up daycare? Organize a tour of the center your company has contracted with: have parents meet the care providers, help them with the enrollment paperwork, and walk them through what the drop-off process looks like. “Believe it or not” says Lindsay Bell, founder and CEO of Bell Family Company, a leading provider of corporate backup- and emergency childcare, “many families that already have these benefits don’t actually know how to start using them. To help them do so, organizations need to work closely with moms and dads — to educate and inform.”
Keep all events on “working parent time.” Make gatherings short, and if possible, hold them outside of the morning and evening working-parent crunch times; the 30-minute brown-bag lunch can be your most powerful format. And always distribute summary notes to those who couldn’t make it, or had to leave early. (Remember, the network is about working parents giving each other a hand!)
Working parenthood is a gigantic challenge for those living it day-to-day — but it’s also a major challenge for organizations, too. People drive performance and they need to feel in control and supported. Luckily, with some advance planning and the right approach, you can create a working parents’ network that will help get them there.
A new study out by Spencer Stuart shows an insane number of chief marketing officers who’ve been fired during 2018. But frankly, it’s not a surprise. I served as CMO for Deloitte Consulting and then Starwood Hotels & Resorts, and when I have coached executive teams through transformations, I’ve seen many teams at an impasse with their CMO.
There are lessons we can learn by exploring why so many CMOs get fired—and they can be useful to any executive working to navigate the radically interdependent world of business today.
Although the role of a CMO has been evolving and expanding, people on executive teams still seem to think the CMO must have expertise in every element of her role. In most cases that is a prescription for failure. Success comes, rather, by embracing a role as the facilitator of growth for the business and the four most important levers of that growth:
Brand: This is the traditional role of the CMO: the architect of the brand strategy and the one who establishes the brand’s position within the marketplace and relative to the competition. The CMO is the curator of the creative. She lays out the road map: where the brand has been, where it is going, and how it is going to move in that direction.
Product marketing: For this, the CMO pulls all of the analysis and insights from all of the customer-facing resources of the organization to support and co-design specific solutions with the product organization.
Data and analytics: This has been a fast-emerging competency, and one which is sometimes antithetical to the traditional role of the creative CMO. This role is more rigorous, more focused on numbers, and more focused on data sources—many of which didn’t even exist a few years ago.
Sales support: This has sometimes not been the purview of the CMO at all, but has been taken up and led by the sales team alone. This area is measured by the generation of leads and the support of the field marketing organization, which in turn directly supports and enables the sales organization. In many cases, the incapacity to successfully support the sales operations has been the downfall of a CMO. That is because of the simple truth that revenue and sales always win. In some instances, the sales organization ignores marketing altogether and takes over, leaving only the corporate brand to the marketer.
When faced with the evolving demands of the role, many CMOs steadfastly cling to the one thing they know best. Too often this is a co-creation with the CEO who hired them. For instance, when a refresh of a brand is called for, a CEO will often pursue a CMO from a big brand. After completing an expensive, celebrated brand reboot, everyone finds that the CMO is still beating the drum of “more money for bigger brand.” This just when market pressures are suggesting the CMO should shift to sales support and product marketing.
I have also seen CMOs who have been extraordinary at generating leads, but then struggle with transforming the brand. Because the CEO happens to have a strong point of view, they are reluctant to step up within the executive team and say what the CEO needs to hear. They fear that if they do, they invite trouble. I have also often witnessed a tug of war between the CMO and CEO, particularly in founder-led organizations where the brand is, in essence, a slice of that CEO’s perception of themselves.
What can we learn from watching the pattern of why CMOs get displaced? I see four big lessons:
1. Recognize your responsibilities. You may prefer spending time and energy on one or two of the areas outlined in your job description—the ones you feel especially good at. Nonetheless, you are responsible for all of them. This means that you must learn to successfully facilitate and orchestrate all of these critical areas, not necessarily accomplish them yourself. Most likely, if you try to achieve all of these competencies yourself, it will be your downfall. You don’t have to provide all of the leadership and direction in all of these areas. With good orchestration, the solutions will come from others. This may be a little galling, depending on the size of your ego. But a friend of mine used to say that in golf, nobody draws pictures on the scorecard. That’s because how you got there is irrelevant—what’s most important is that you got there.
2. Build a “team” around your role. So, who is on your team? It’s not the people who report to you. Rather, if you are a modern CMO, your “team” (in quotes deliberately) may include the chief product officer, the head of sales and sales support, the chief strategy officer, those responsible for data and analytics, and the most creative people in the company who have a sense of the brand. Oh, and of course the CEO themself.
Real success as an executive isn’t based on your direct reports—it’s based on your ability to build your “team” and then lead without formal authority and control.
I have more than one CMO friend whose job is on the ropes. One of them hits the ball out of the park in lead generation and field marketing support, and may even be effective at data analytics. But she is incompetent at co-creating innovative product solutions and strategies. This wouldn’t be a fatal weakness—if she were able to collaborate with the chief product officer to fulfill this part of her role. A lot of executives are in this position, unaware that what they lack isn’t a requisite skills, but the ability to partner with C-suit colleagues who possess it and can fill that gap.
3. See no boundaries. I’m working with too many organizations in which one executive or another is consistently seeking to increase their authority and control. These people often feel frustrated by running into boundaries. Here’s what I tell them: There are no “boundaries” in the growth of an organization, inside or outside the company! Boundaries don’t exist for bold and effective innovators—people who can see big possibilities, enlist talent, and navigate networks to make things happen. All that exists is your willingness to engage the individuals who will execute the most powerful solutions inside of your organization and out to the customer base. This is the definition of the organization design of the future.
4. Overcome the dynamics within your team. I have often seen CMOs fail and then blame the dynamics within the executive team. We have coached many sales organizations through transformations, and we inevitably find ourselves brokering negotiations between the head of sales, head of product, head of marketing, or others who are not enabling salespeople to deliver great solutions. It doesn’t matter who you think is getting in your way as a leader of growth, your job is to facilitate the transformation.
So what happens if the CEO, the head of sales, or the chief product officer is getting in your way? I don’t care. Sorry to be a downer, but it doesn’t negate your responsibility. Your job remains the same. These people are still members of your team. Recognize that you have a mix of individuals within your organization who need varying degrees of coaching, cajoling, and encouragement. Your job is still to enlist and engage your peers—without authority—and even to work with your CEO to achieve the growth your role and vision demands.
Sure, it’s easier to sit back and point fingers. “It’s the founder’s personality that’s getting in the way.” Or “It’s the head of sales’ ego and her disinterest in working collaboratively.” Truthfully, this is self-indulgent. Get over yourself and ask yourself what you can do. How can you reach out and enlist your team members with generosity and authenticity to co-create an extraordinary solution? How can you lead?
Sure, you can be “right,” but you can also be fired. Just ask the CMOs who’ve been pushed form their jobs so far this year.
It was the last race of the ski season. My son Daniel, 10 years old, was at the starting gate in his speed suit, helmet and goggles, waiting for the signal.
“3… 2… 1…” The gate keeper called out and he was gone in a flash, pushing off his ski poles to gain momentum. One by one, each gate smacked to the ground when he brushed by. As he neared the end, he crouched into an aerodynamic tuck to shave a few milliseconds from his time. He crossed the finish line —48.37 seconds after the start — breathing hard. We cheered and gave him hugs.
But he wasn’t smiling.
48.37 seconds put him solidly in the middle of the pack.
I had coaching ideas. Ways I could help him get faster. While I am an executive and leadership coach, I coach skiing on the weekends and I was a ski racer myself at his age. But I held back my feedback, hugged him again and told him I loved him. That’s what he needed in that moment.
Later though, I asked him how he felt about the race.
“I never get in the top 10.”
This is delicate terrain — coaching your own kids — and I chose my words carefully.
“I have two questions for you,” I said. “One: Do you want to do better?”
If the answer is “no,” then to attempt to coach would be a fool’s errand (a mistake I have made in the past).
“Yeah” he said.
“Here’s my second question: Are you willing to feel the discomfort of putting in more effort and trying new things that will feel weird and different and won’t work right away?”
He was silent for a while and I let the silence just hang there. Silence is good. It’s the sound of thinking. And this was an important question for Daniel to think about.You and Your Team Series Improving Yourself
I believe — and my experience coaching hundreds of leaders in hundreds of different circumstances proves — that anyone can get better at anything. But in order to get better — and in order to be coached productively — you need to honestly answer “yes” to both those questions.
Maybe you want to be a more inspiring leader. Or connect more with others. Maybe you want to be more productive or more influential. Maybe you want to be a better communicator, a more impactful presenter, or a better listener. Maybe you want to lead more effectively, take more risks, or become a stronger manager.
Whatever it is, you can become better at it. But here’s the thing I know just as clearly as I know you can get better at anything: you will not get better if 1) you don’t want to and 2) you aren’t willing to feel the discomfort of doing things differently.
One senior leader I worked with became defensive when people gave him feedback or criticized his decisions. He wanted to get better, he told me, and he was willing to feel the discomfort. So I gave him very specific instructions (learned from my friend Marshall Goldsmith): Meet with each member of your team and acknowledge that you have struggled with accepting feedback and tell them that you are committed to getting better. Then ask for feedback — especially ways you can be a better leader — and take notes. Don’t say anything other than “Thank you.”
“It took every restraint muscle in my body not to get into a conversation about their comments,” he told me afterwards. “Especially because I felt they misunderstood me at times. It was beyond uncomfortable. And I messed up a few times and had to apologize. But I did it — and they haven’t stopped talking about what a welcome change it’s been.”
Learning anything new is, by its nature, uncomfortable. You will need to act in ways that are unfamiliar. Take risks that are new. Try things that, in may cases, will be initially frustrating because they won’t work the first time. You are guaranteed to feel awkward. You will make mistakes. You may be embarrassed or even feel shame, especially if you are used to succeeding a lot —and all my clients are used to succeeding a lot.
If you remain committed through all of that, you’ll get better.
I now ask those two questions before committing to coach any CEO or senior leader. It’s a prerequisite to growth.
I sat silently with Daniel for long enough that I thought he might have forgotten my question. Sitting in the discomfort of that moment, I realized that this was a new behavior for me too. I’m used to jumping in and trying to help him. Now, I was sincerely asking him whether he wanted my help. I was honestly OK with whatever answer he gave me — and it felt a little weird. But the more I settled into the silence, the more comfortable I got with just sitting with him — which I found I loved doing.
Finally, he spoke up.
“I think so” he said, “but it’s the end of the season. Can we talk about it at the beginning of next season?”
“Sure,” I said, “I’ll ask you again then.”
In health care today, the conversation around transparency centers on the consumer. The consumer is empowered to ask for treatment options and costs, potential treatment risks, realistic outcomes, and much more. Health care providers must respond with as much information as possible to ensure appropriate care is delivered, quality and safety are top of mind, and patients and their care team can make thoughtful care decisions.
I believe it is impossible to have complete transparency with patients without first developing a strong culture of internal transparency — among all team members, at all levels, on all issues — throughout the health care organization itself.
When team members are open and honest with each other, without fear, it leads to mutual trust, collaboration, and sharing of best practices across disciplines. Patients are the ultimate beneficiaries.Insight Center
- The Future of Health Care Sponsored by Medtronic Creating better outcomes at reduced cost.
Shining a Light: Safer Health Care Through Transparency, a 2015 report by the National Patient Safety Foundation’s Lucian Leape Institute, states that “if transparency were a medication, it would be a blockbuster, with billions of dollars in sales and accolades the world over.” The report defines transparency as the free, uninhibited flow of information that is open to the scrutiny of others.
Barriers to internal transparency. A culture of internal transparency does not come about overnight. There can be many barriers, some of which can be quite complex. For example, employees may be reluctant to report safety issues or errors for fear of being reprimanded by their managers or shunned by their colleagues.
The Lucian Leape Institute report states that “from the quality and safety perspective, transparency is foundational for learning from mistakes and for creating a supportive environment for patients and health care workers.”
At Virginia Mason Medical Center in Seattle, for example, every employee is considered a safety inspector regardless of job or title. All our team members are expected and encouraged to file a patient safety alert whenever he or she sees anything that poses an immediate or potential safety risk. This level of internal transparency is necessary because leaders and team members cannot correct problems unless they know they exist.
Internal transparency is hindered when lessons learned aren’t shared freely across the enterprise. While many organizations have routine team huddles, it is critical to prioritize multidisciplinary huddles and encourage clinicians to break through silos by sharing information with their colleagues in other specialties and departments.
Providers are often hesitant to disclose mistakes to their patients even though a 2006 study in the Journal of General Internal Medicine concluded that full disclosure is associated with a lower likelihood of changing physicians, higher satisfaction, and greater trust.
Leaders must create a no-blame culture. The most effective way to build a culture of transparency begins with those in leadership positions. It is the responsibility of the leadership team to develop an atmosphere in which there is balanced accountability and continuous improvement and this is everyone’s shared duty. Leaders must lead by example.
A 2013 article in The Ochsner Journal, titled “Just Culture: A Foundation for Balanced Accountability and Patient Safety,” concluded that “a fair and just culture improves patient safety by empowering employees to proactively monitor the workplace and participate in safety efforts in the work environment.”
A new paradigm. When something isn’t working in health care, it can take a long time to change, but providers can reach their own unique breakthrough moment that serves as the catalyst for long-term transformation.
At Virginia Mason, we began nearly 20 years ago to create a culture in which our team members could believe zero-defect care is possible and have the tools to make this happen. We recognized that to achieve such a transformation, a paradigm shift was needed. Our management approach at the time was not nimble enough to keep up with the changing health care environment: We needed to eliminate wasteful elements from patient care, and we wanted to empower our employees to be stewards of patient safety, regardless of their job title.
To find an innovative way forward, we looked beyond our own industry because traditional approaches in health care management had not evolved much over the previous decades. In 2002, we implemented the Virginia Mason Production System (VMPS), a management method that employs basic principles of the Toyota Production System for eliminating waste (i.e., anything that lacks value from the patient’s perspective), improving quality and safety, and controlling cost.
This change did not happen easily. There were doubters and naysayers, as well as enthusiasts who were open-minded about exploring a new path. Some team members adopted a wait-and-see attitude. A few decided to leave our organization. There was a mix of optimism and a feeling of loss as it became clear that doing things as we’d always done them was no longer good enough.
By openly sharing information in employee forums and during one-on-one conversations over several months, we worked to help our team members understand that change was necessary for the future of the organization. We developed compacts with our physicians, board members, and leaders at all levels that clarified organizational expectations and what, in turn, they could expect from the organization. Our leaders — including department directors and managers — are required to practice VMPS methods and teach them to their teams. Completing a course in VMPS basics is an important part of the onboarding process for newly hired employees. The result is a safer environment for patients and staff.
I believe all of us in health care have a moral imperative to make health care better and more affordable. Safety is the foundation of quality.
In 2004, one of our patients, Mary McClinton, died because of an avoidable error while she was in our care. That mistake shook us to our core as an organization. It also served as an inspiration to create an environment that is safe for every patient and team member, and to be open with our patients, staff, and the community about our work to continually improve safety. To honor Mrs. McClinton’s legacy, we created an annual award that recognizes a team that improves quality and safety through innovation. Their projects are shared broadly across the Virginia Mason organization so everyone understands how patients and care givers will benefit from the award-winning initiatives. Members of Mrs. McClinton’s family attend the award ceremony that is named for her.
In the United States, we have more information than ever about how to provide appropriate, high-quality care and keep patients safe. Transparency with internal and external stakeholders is essential for quality, safety, accountability, and informed decision making. As the Lucian Leape Institute report explains, transparency between clinicians and patients, among clinicians and health care organizations, and between health care organizations and the public produces safer care, better outcomes and more trust among all the involved parties.
An all-star team is making headway with a new initiative that could alter the future of the organization. Spirits are optimistic and the team is successfully maneuvering through new, yet very promising, territory. Then, the results begin taking longer than anticipated to prove, and after too much time spent outside of their comfort zones, the team of high-achieving employees can’t seem to execute within the uncertain environment.
The team’s outlook shifts and it becomes clear that the group will not be able to weather the storm of uncertainty needed to realize this new organizational opportunity.
How could such a capable team fail?
At the heart of many organizations is a deeper problem that blocks transformation: product/function organizational structure. This structure works in well-understood environments, where maximizing delivery of a product or service is the goal, but transformative projects require the organization to return to a more malleable state. This challenge requires teams that are formed through a re-matching of resources and employee capabilities.Further Reading
- Leading Transformation: How to Take Charge of Your Company’s Future Innovation BOOK 32.00 Add to Cart
Transformation-capable teams are made up of people who are not only high performers, but who hold a unique balance of skills and mindsets that allow them to sustain focus, agility, and optimism in the face of uncertainty for prolonged periods of time. Ultimately, not all top-performing employees are equipped for this.
In our book, Leading Transformation: How to Take Charge of Your Company’s Future, we highlight certain capabilities to search for and cultivate while building a transformative team. Specifically, there are three unique characteristics that will play critical roles as a team takes on a breakthrough initiative.Negative capability: being comfortable with uncertainty
The term “negative capability” was coined by the poet John Keats while describing writers like Shakespeare who were able to work within uncertainty and doubt. Keats was describing the ability to accept not having an immediate answer and to remain willing to explore how something may evolve before there is a clear outcome.
In the modern context, negative capability can be thought of as the ability to be comfortable with uncertainty, even to entertain it, rather than to become so anxious by its presence that you have to prematurely race to a more certain, yet suboptimal, conclusion. Whereas many people cannot stand the fuzziness of uncertainty, those who demonstrate negative capabilities can facilitate the exploration of new terrain and the discovery of an adjacent possible opportunity.
Individuals with negative capability remain curious and focused even when your project is far from the end goal. Chances are, they will even find this point of the project enthralling, rather than overwhelming, which is exactly what you want. They will also be able to suspend judgement about an end result and stay open to many possible outcomes, rather than become fixed early on to one version of success.Chaos pilots: leading and executing in unfamiliar territory
In 1991, Danish politician and social worker Uffe Elbæk took out a $100,000 personal loan to open an unusual business school called Kaospilot. The vision of the business school was inspired by a previous project of Elbæk’s, where he observed a new skill set in students for navigating uncertain problems and saw the opportunity to teach these skills to business leaders who needed to do the same. Chaos pilot is a perfect label for a specific persona needed on a transformative team.
Chaos pilots are people who can creatively lead a project through uncertainty. They have negative capability, but they also have other critical skills, such as the ability to create structure within chaos and take action. Leaders who are chaos pilots are able to drive a team forward on a project even as the environment around them fluctuates.
Although it may sound glamorous to be such a person, being a chaos pilot is hard — they are the colleagues working on ambiguous projects and frequently getting beat up in the process. People who aren’t capable of being chaos pilots quickly flounder when the environment around the project gets shaky.
Chaos pilots often care more about creating meaningful change than about climbing a corporate ladder or getting another star on their charts. Finding chaos pilots to join you can be challenging and requires observation and experimentation, though there are a few fertile places to look for good candidates.
For example, look for people who are getting mixed performance reviews, but who are still highly prized by the organization. Often, these people are getting mixed reviews because they make those around them uncomfortable — because the potential candidates often challenge the status quo — but they continue to succeed, because they perform so well.Divergent thinking, convergent action, and influential communication
Finally, there are three neuropsychological traits to seek while building a transformative team. These three traits — divergent thinking, convergent action, and influential communication — all play a crucial role to succeeding in innovation and transformation. While many individuals hold one or two of these skills, finding a person with all three is more challenging, yet optimal.
The first of the three, divergent thinking, is the ability to uniquely connect new information, ideas, and concepts that are usually held far apart. People with this skill can match dissimilar concepts in novel and meaningful ways and uncover new opportunities that others may overlooked.
Convergent action, the second trait, is the ability to execute on these new ideas in order to create something tangible. Though many people can come up with great ideas, it is often those with convergent action who will move that new concept from idea to product. Last, having the ability to communicate ideas in a coherent, compelling, and influential way is paramount. This trait will inspire other leaders and decision-makers to believe, support, and act on a novel idea or opportunity.
Similar to how many transformative business opportunities are found in unlikely places, the same is true about where you may find the best-suited team members to drive forward a promising new initiative.
Each organizational project represents a moment of potential transformation, and each successful project helps an organization self-correct away from becoming a calloused machine executing on routine, and instead become what they need to survive: a malleable organization capable of capturing new opportunities.