Abraham Lincoln: Leadership Lessons

Today we celebrate President Abraham Lincoln's birthday.    In honor of the great 19th century leader, I thought that I would take a look at one important leadership lesson pertaining to him.    Doris Kearns Goodwin spoke to Harvard Business Review several years ago about her research on Lincoln.  She talked specifically about how he made the decision regarding the Emancipation Proclamation:

For example, for months Lincoln let his cabinet debate about if and when slavery should be abolished. Finally, though, he made up his mind to issue his historic Emancipation Proclamation to free the slaves. He brought the cabinet together and told them he no longer needed their thoughts on the main issue—but that he would listen to their suggestions about how best to implement his decision and its timing. So even though some members still did not support Lincoln’s decision, they felt they’d been heard. And they had been. When one cabinet member suggested that Lincoln wait for a victory on the field to issue the proclamation, Lincoln took his advice.

I take two key lessons away from this example.  First, Lincoln appears to have led a decision-making process that most advisers felt was fair, i.e. he not only gave them voice, but made them feel that their views had been considered genuinely and thoughtfully.   Second, Lincoln still gave them room to have input after he had made the final decision.  However, he didn't give them an opportunity to undo the decision or revisit the choice.  Instead, he brought them back into a dialogue about how to best implement his decision.  It turns out that they had a good suggestion regarding the relationship between his political move and a battlefield victory in the late stages of the Civil War.   Many leaders could use the time of announcing a decision to pivot the conversation with their team, away from WHETHER to do something to the issue of HOW to do it.  In that way, you can give them voice once again, and you can make others truly own the implementation process.  

Read More

How Things Go Viral

Over the past few years, I've become a fan of Wharton Professor Jonah Berger's research.   He now has a book out titled, Contagious:  Why Things Catch On.   Fast Company has profiled his book, and they offer a summary of the basic steps he has outlined for making something go viral.  Berger refers to it as the STEPPS method: 

• Social Currency: We share things that make us look good (even if that means pictures of our cat).
• Triggers: Easily memorable information means it's top of mind and tip of the tongue.
• Emotion: When we care, we share.
• Public: Built to show, built to grow.
• Practical Value: News people can use.
• Stories: People are inherent storytellers, and all great brands also learn to tell stories. Information travels under the guise of idle chatter.

I'm really looking forward to reading the book.  I'll put together another blog post once I'm done with the book.

Read More

Collegiate Athletic Success as Advertising: Is it Effective?

Harvard Business School Professor Doug Chung has written a new working paper titled, "The Dynamic Advertising Effect of Collegiate Athletics."  He explores the impact that athletic success impacts the quantity and quality of a university's applicant pool.  Here's an excerpt from the abstract to his paper:

I estimate the impact of athletic success on applicant quality and quantity. Overall, athletic success has a significant long-term goodwill effect on future applications and quality. However, students with lower than average SAT scores tend to have a stronger preference for athletic success, while students with higher SAT scores have a greater preference for academic quality. Furthermore, the decay rate of athletics goodwill is significant only for students with lower SAT scores, suggesting that the goodwill created by intercollegiate athletics resides more extensively with low-ability students than with their high-ability counterparts. But, surprisingly, athletic success impacts applications even among academically stronger students.

The findings surely will provoke some interesting debate.   Note that Chung finds that going from good to truly great in NCAA football, for instance, can cause applications to rise by nearly 20%.   It takes a significant move in other areas of a university to achieve a similar impact.  For instance, Chung estimates that a college would have to reduce tuition by nearly 4% to get the same rise in applications, or it would have to recruit higher-paid, higher-quality faculty.  What's interesting about this analysis is that some will say that the cost of athletic success outweighs the positive effect on applications.   That's potentially true.  However, Chung shows that there is a cost to other ways of driving applications higher as well... so it's not immediately clear what methods are most cost effective to increase application quantity and quality.  Of course, we have to remember that athletic success can be very difficult to achieve, and it can be fleeting at times.  Schools may spend a great deal of money and never get to the "great" level required to get this type of increase in applications. 

Read More

Planet Fitness: Making Money in a Tough Industry

I ran across this excellent article by Judith Ohikuare in Inc. magazine.  The article is titled, "The Secret to Planet Fitness's Success."  Here's a quote from the company's CEO in the article:

It's very, very difficult to make money in the fitness industry. In order to thrive, you really have to have a niche and sell it. You've either got to be at the high end or at the low end; otherwise, you're not in at all. We're at the very low end: Members have access to a great club for 10 bucks a month, and I don't see that changing. We keep it as simple as possible, so that there are as few areas to disappoint as possible. When we started out, we included perks that everyone else had, such as day care and yoga classes, but none of that made sense for us.

Having read that quote, now check out the commercial below, a creative follow-up to the famous "I lift things up and put them down" ad which I featured on the blog awhile back. (Thank you to student Meredith Soper for pointing me to this commercial).   What you see is a company that is clearly trying to identify its niche... and clearly specifying what it is not (and who it does not seek to target).  In a very tough industry, leaders must pay particular attention to the clarity of their target market and the boundaries of their strategy.  Making clear choices becomes all the more important when you have fewer potential profits because of an unattractive industry structure (such as in the fitness center industry).  

Read More

Business Plans: useful or not?

Over the past few years, we have heard a great deal of conversation about the inadequacy of traditional business plans.   The lean start-up movement has argued that we should focus on developing a basic business model, testing out our ideas, and then refining them through a process of enlightened trial and error.  We should not over-emphasize a lengthy, drawn-out planning process.   The lean start-up movement emphasizes the notion rapid prototyping.   This approach has many merits.

Source: getaliff.blogspot.com

On the other hand, I think we can go too far in diminishing the importance of a business plan.   Dwight Eisenhower once said, "Plans are useless, but planning is indispensable."  In other words, the process of thinking through an issue and developing a strategy can be very useful. 

The mistake that many people make though is becoming too wedded to that original business plan.   A process of research and analysis can be productive, but it must lead quickly to a rapid prototyping phase.  We have to take action, and learn from that action.  However, we can't just leap without any spade work. 

For the Wall Street Journal, London Business School Professor John Mullins has written a great column exposing some of the many problems with traditional business plans.  For those interested in learning more about this topic, I strongly suggest reading his essay. 

Read More

Oreo: The Power of a Nimble Social Media Strategy

By  now, many of you have heard of Oreo's social media grand slam during the Super Bowl.  While all of us sat through that lengthy delay due to the power outage, Oreo's social media team unleashed the tweet heard round the world.   The tweet read:  "Power out, No problem."   The tweet included the photo shown here.

15,000 people retweeted that simple message.   More than 20,000 people "liked" it on Facebook.   Oreo's Instagram followers mushroomed from 2,000 to 36,000.   

Forbes reports on the most interesting part of the story - namely, how they managed to engineer such a rapid and highly creative response.  Apparently, Oreo's brand team had set up a "command center" at advertising agency 360i’s offices in New York City.    All of Oreo's advertising agency partners set up shop together at those offices, with Lisa Mann, an executive from Oreo's parent company on the  phone.   Mann explained how they moved so quickly:  “Because everyone was together, they had everyone in place to jump on a real-time marketing opportunity, which was, how would Oreo see the blackout? And Oreo saw the blackout as an opportunity to dunk in the dark.”

What a terrific story!   I love the fact that preparation yielded such a great result.  They knew that the Super Bowl represented a unique opportunity.  While so much attention is focused on the television ads, social media represents a huge opportunity at low cost.  With the blackout, everyone took to Twitter.  The volume of tweets exploded.  That posed a challenge for many firms though. How do you stand out when the Twitter world suddenly became so crowded.   Being prepared and ready to move so quickly turned out to be a tremendous advantage.   

Notice that Oreo did not try to be controversial or outlandish.  They stayed true to the brand.  So many social media and television advertising efforts associated with the Super Bowl yield poor results, because they emphasize being funny or controversial at the expense of communicating an authentic and consistent message about the brand.  Think about some of the ads you saw this weekend.   How many times did you think to yourself:  While that ad was funny, I'm not sure I know what it has to do with that product or brand.  

Read More

Peripheral Knowledge & Breakthrough Innovation

My former graduate school classmate, Martine Haas (now a professor at Wharton), has written a new paper exploring how peripheral knowledge might impact breakthrough innovation.  Haas describes peripheral knowledge as information and ideas that may not seem pertinent to a particular task, that are outside of that technical domain.   Haas argues that that peripheral knowledge drives innovation through two mechanisms:  transplantation and perspective shifting. Haas defines transplantation as "the direct transfer of artifacts, technologies or practices from peripheral domains into core domains, with or without some modification."    Perspective shifting means that " expertise or experience in a peripheral domain leads work group members to see a problem in a core domain differently, thus revealing new solutions." 

Haas and her co-author, Wendy Ham, go on to argue that having more one person exploring a peripheral knowledge domain can be helpful, but of course, that takes scarce attention away from the specific task at hand.  In short, it's a balancing act:  How much time should we spend focusing narrowly on the task at hand versus moving outside of that area to explore potentially, but perhaps not very useful, topics? 

One last challenge:  Which peripheral domain will be most useful?  Well that's a tough one.  It's difficult to know in advance.  However, I do think groups can be purposeful about peripheral knowledge accumulation.  At leading design firms, they think carefully about related domains that are worthy of exploration.  They examine industries or products that might be in some way analogous to their current project, and then they explore those areas.   Stepping back at the start of a project to think about potentially useful peripheral knowledge could be a key step in an innovation team's work. 

Read More