Touchy Shoppers

Years ago, retailing expert Paco Underhill explained how shoppers, particularly females, did not like to be brushed or touched by others in the store.  When they did get brushed up against in crowded areas of the store, they tended to move on from the items they were examining.  The store often lost a potential sale.  Underhill developed this conclusion based on years of anthropological observation of customers in retailers around the world. 

Now, researchers have conducted a field experiment and confirmed Underhill's conclusions.  According to the Wall Street Journal, Brett Martin has published a new study that shows, "Getting touched by a fellow shopper—even an apparently accidental brush—makes consumers less likely to buy the product they're considering."  The effect proves more significant if a male shopper brushes up against a female consumer, just as Underhill suggested.  The study confirms that retailers need to think about the tradeoffs between utilizing floor space efficiently versus losing potential sales due to the "brush" effect.

The thing that I find fascinating about this study is that researchers felt compelled to conduct an experiment to prove Underhill's point.  It demonstrates a continued under-appreciation for qualitative observational field research... just one more thing that is maddening about academia!

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Do Friends Encourage or Discourage Us From Becoming Entrepreneurs?

Harvard Business School Professor Josh Lerner and his co-author Ulrike Malmendier have written a fascinating new paper about how our friends may affect our propensity to become entrepreneurs.  They studied a decade worth of students in the first-year curriculum at HBS.  Those students take all their first-year classes in the same section of 80-90 students.  Thus, they spend a great deal of time inside and outside of class with that group, and many of them become quite friendly.   Lerner and Malmendier examined the students' backgrounds prior to HBS as well as what they did after graduation.  Here is the abstract of their paper:

To what extent do peers affect our occupational choices? This question has been of particular interest in the context of entrepreneurship and policies to create a favorable environment for entry. Such influences, however, are hard to identify empirically. We exploit the assignment of students into business school sections that have varying numbers of classmates with prior entrepreneurial experience. We find that the presence of entrepreneurial peers strongly predicts subsequent entrepreneurship rates of students without an entrepreneurial background, but in a more complex way than the literature has previously suggested: A higher share of entrepreneurial peers leads to lower rather than higher subsequent rates of entrepreneurship. However, the decrease in entrepreneurship is entirely driven by a significant reduction in unsuccessful entrepreneurial ventures. The effect on the rate of successful post-MBA entrepreneurs, instead, is insignificantly positive. In addition, sections with few prior entrepreneurs have a considerably higher variance in their rates of unsuccessful entrepreneurs. The results are consistent with intra-section learning, where the close ties between section-mates lead to insights about the merits of business plans.

The finding regarding the "discouragement effect" proves rather surprising and perhaps disappointing to some observers.  However, the finding regarding intra-section learning proves much more encouraging (i.e. the reduction in entrepreneurship is entirely driven by a decrease in unsuccessful start-ups, suggesting that students may learning from peers how to sharpen their business plans). 

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Free Kindle Version of Book Today!

Apparently, my last book - Know What You Don't Know - is available free on Amazon's Kindle today!

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New version of Everest Leadership and Team Simulation released!

I'm very excited to announce that Harvard Business Publishing has just released a new, updated version of the Everest Leadership and Team simulation (Everest 2.0!) which we developed originally several years ago.  We are incredibly grateful to all the instructors who have adopted the simulation in the past few years, and who have taken time to offer us useful feedback.  We have tried to address many of the suggestions and ideas offered by faculty members and students.  We think you will really enjoy the upgrades! 

I'd like to thank the entire team that worked on the simulation as well.  I always enjoy working with my co-author, Amy Edmondson.   The team at Harvard Business Publishing is just terrific, led by Heide Abelli and Nicole Harris (Nicole, in particular, did much of the heavy lifting on the revision).  Finally, Michael Bean and his team at Forio do a terrific job of software development. 

By the way, for those who are interested, we have been working on a new simulation.  We have a fair bit of work left to do, but I'll post details once we are close to completion.

I've posted the official announcement about the Everest simulation from Harvard Business Publishing below, which contains a few details about the upgrades to the simulation. 

Harvard Business Publishing is pleased to announce that the Leadership and Team Simulation: Everest V2 is now available. This second release of the team-based simulation combines the proven learning objectives and storyline of the original with an updated user experience for both student and instructor.

Key Features:

• NEW Design—Updated visuals and navigation enhance the look and feel of the simulation while maintaining the principles of the original for continued ease of use.
• NEW Setup Options—Drag and drop functionality and the new auto-assign feature simplify and expedite team and role assignment.
• NEW Teaching Materials—The updated Teaching Note reduces simulation ramp-up time. A new Microsoft PowerPoint deck populated with your specific classroom results provides an effective and efficient tool for a classroom debrief session.
• NEW Performance Tracking—New debrief histograms offer role-by-role comparison of individual goal achievement across teams. Now you can also download results for multiple teams for more powerful results analysis.

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Traveling Interationally vs. Living Overseas

Many universities now urge or even require their students to travel internationally as part of their education.  In some instances, students go on very short trips abroad with faculty and other advisers.  For others, their global experience involves a semester or more of study abroad.   Some companies also require high potential employees to take an international assignment as part of their career plan.  Other firms don't require it, but managers travel extensively abroad as part of key assignments. 

I think it's important to consider the difference between traveling and living abroad.  As I write this blog, I'm in Tokyo teaching an executive education program.  It's my eighth year doing so.  Each summer, I spend a week or so here teaching senior managers from a variety of Japanese firms.  I began to contrast my experience here with the trips I've taken going all the way back to my childhood to visit family in Italy.  Here in Japan, I stay at a very nice hotel and eat at restaurants each day.  When I go to Italy, I stay with family members in their homes and on their farms.  I help out as much as they will let me around the house.  I go to the grocery store, gas station, and the park with them.   When I was a kid, I went for a whole month several times.  The experience differs dramatically.  Traveling overseas certainly exposes you to a culture, but it is not nearly as informative as living and breathing the culture day to day.  When you stay for longer, and live in a community, you experience the routines and the frustrations of daily life in a way that you do not when traveling for a short time in another nation.

Thus, I think students benefit greatly when they go abroad for a whole semester, and executives benefit when they take an overseas assignment.  Neither of these is always possible, and so, travel overseas certainly isn't a negative thing.  However, to gain a true understanding of what customers need and want in different regions and cultures, living in that environment can't be beat. 

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Does Google need an auteur?

The New York Times published an interesting article this weekend about Google and Apple. The article describes a theory outlined by blogger John Gruber at MacWorld Expo two years ago. Gruber argued that innovative firms need an auteur, someone like a film director who calls the creative shots... Like Steve Jobs does at Apple. The article suggests that Apple's auteur approach (Jobs as ultimate design arbiter) excels relative to Google's collaborative design process (many people weighing in on key choices).

I have two problems with this argument. First, I think it downplays the level of true collaboration at Apple, and discounts the true contribution of people such as Jonathan Ive. More importantly, though, I think we have to consider whether we should be generalizing based on observations of Apple. Perhaps it is a very unique firm that cannot be easily emulated. Moreover, perhaps it would be problematic to bet on the "lone genius" approach in a wide variety of other firms based on this auteur argument.

Recently, Bob Lutz made a similar argument regarding car design. He argued essentially that a dictator approach beats design by committee. However, that assumes a really capable dictator. What if the dictator is less than spectacular?

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Sharing Feelings, not Facts

In the Wall Street Journal this weekend, Jonah Lehrer writes about the research of Wharton Professor Jonah Berger. That research focuses on why people share certain types of information more than others. Berger's work focuses on how we tend to share information more frequently when it triggers emotions such as anger and awe.

We all know that organizations suffer when information is not shared within teams or across silos. Is it actually even more problematic if people are biased toward sharing emotionally charged information rather than "cold, hard facts" available to them? Does the bias toward sharing feelings over facts make the conflicts among silos even worse?

That's the downside one can examine based upon this research? What about the positive recommendations for action? Well, if we want others to pass along data we have shared with them, we might be well-advised to frame the information in a way that triggers feelings and emotions. It's not "just the facts" after all!

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