Showing posts from 2016

The Overview Effect

The Overview Effect is a cognitive shift in awareness reported by some astronauts and cosmonauts during their spaceflight.

As Edgar Mitchell of Apollo 14 has said: "You develop an instant global consciousness, a people orientation, an intense dissatisfaction with the state of the world, and a compulsion to do something about it. From out there on the moon, international politics look so petty."
Viewed from the moon, or even from space, about 300 miles above the earth's surface, our planet takes on a new perspective. Largely blue, borderless, and hanging like a fragile sphere with the infinite space in the background, with a paper-thin atmosphere that nurtures life - just think about it, in an universe comprised of millions of galaxies, billions of stars, countless planets, an unknown number of black holes, this planet of ours is the only one known so far that has life on it.
As Stephen Hawking has said so profoundly: "The solar system is not even a speck in the univers…

What Drives Team Success?

Ever wondered what distinguishes exceptional teams from others?

Psychological safety.

Coined by Harvard Professor Amy Edmondson, psychological safety has been found to be at the heart of great teams. She defines psychological safety as "ashared belief that the team is safe for interpersonal risk taking" and explains that psychologically safe environments exude "a sense of confidencethat the team will not embarrass, reject, or punish someone for speaking up."

It is important to remember that psychological safety is not the same as trust.

"Trust is the expectation that other people's future actions will be favorable to one's interests. Psychological safety refers to a climate in which people are comfortable being (and expressing) themselves. Although both constructs involve a willingness to be vulnerable to others' actions, they are conceptually and theoretically distinct. In particular, psychological safety is centrally tied to learning behavior, while …

The Teal Paradigm

Gallup's employee engagement survey for 2015 highlights the following:

A mere 32% of employees said they were "engaged" at work (engagement has remained flat since 2000).
A majority of employees (50.8%) were "not engaged."
Another 17.2% were "actively disengaged."
In reporting these figures the Gallup organization notes:
"Engaged employees are involved in, enthusiastic about, and committed to work. Employee engagement is strongly connected to business outcomes. Engaged employees support the innovation, growth, and revenue that their companies need. Yet, most U.S. workers continue to fall into the not engaged category. These employees are not hostile or disruptive. They show up and kill time, doing the minimum required with little extra effort to go out of their way for customers. They are less vigilant, more likely to miss work and change jobs when new opportunities arise."
Aon Hewitt defines engagement as the psychological state and behavioral ou…

What's Your Story?

Managers are fond of PowerPoint. Every presentation is full of data, facts, figures, charts, and graphs. This fascination with packing presentations with everything under the sun on a given topic is in sharp contrast to available evidence as to how the human brain functions. In numerous controlled studies, where one group is asked to prepare a short (one minute) presentation with data and facts, and another group is asked to make the same presentation in the form of a story, audiences exposed to the story had a 67% higher retention rate than audiences exposed to data and facts.

Jennifer Aaker is the General Atlantic Professor of Marketing at Stanford University's Graduate School of Business. She is the author The Dragonfly Effect: Quick, Effective, and Powerful Ways to use Social Media to Drive Social Change.
"It is clear from our research that, in contrast to what you may think, promoting a personal goal is inherently social. To be successful, you must translate your passion …

Irrational Decisions

Microsoft recently acquired LinkedIn for $26.2 billion in cash. Analysts have noted that the acquisition may turn out to be another flop because of the premium paid, LinkedIn's unprofitable assets, and the absence of any clear path for leveraging the target company's capabilities. Consider these points:
Microsoft's buyout price of $196 per share values LinkedIn at 91 times the EBITDA over the last twelve months. To place that in perspective, Microsoft paid 46.7 times EBITDA for Skype and 40.7 times EBITDA for aQuantive. The latter has been a failure and nobody knows the value created by Skype. Put another way, Microsoft has paid $250 per average monthly visitor, and $60 for each of LinkedIn's 433 million registered users. Compare this with the $42 that Facebook paid for each of the 450 million active users of WhatsApp when the latter was acquired for $19 billion.Last year (2015), LinkedIn lost $166 million on revenues of $2.99 billion. The net loss shows a poor trend, w…

The Age of Inequality

This post is a continuation of the previous one and is a result of some questions that I have received. It is quite astonishing that a glaring divide exists between our ideals, our beliefs, and the grim reality. Chauncey Alcom, writing in Fortune yesterday quotes a thirty-year research study (1983 - 2013) of the Corporation for Enterprise Development and Institute for Policy Studies to show that Black families in America would need hundreds of years to amass the same amount of wealth that whiteshave now. The study concludes that the average wealth of white families has grown by 84% - three times the rate of African-American families and 1.2 times as fast as Latino-American families. Juxtapose this statistic with the projection that whereas Americans of color will outnumber white Americans by 2043, the wealth divide is expected to double by the same year. A 2015 study of global wealth by Allianz called America the "Unequal States of America" for its position as the country w…

Why Are We So Angry?

We are living in a kind of time-warp. If the International Monetary Fund is to be believed, the world has never been more prosperous than it is today. A World Bank policy paper of 2012 claims that billions have moved out of extreme poverty. Really? The paper admits that 1.2 billion people still (in 2012) live on less than $1.25 per day and yet tries to argue that extreme poverty is on the decline. Here's the grim reality: About 10% (600 million) of the world's population lives on less than $1 per day. Nearly 50% live on less than $2 per day. And yet, we are expected to believe that billions have moved out of extreme poverty.

Next, look at the turmoil going on in different parts of the world. Nationalist tendencies are being exhibited in various forms. It appears as if the gains of global economic integration that have evolved over the last three decades may be lost. I consciously avoid using the term "globalization" because even at its zenith (as reflected in Thomas…

Demographics, Productivity, and Innovation

The relationship between the demographics of a nation and its ability to innovate and be highly productive is a fascinating subject for discussion. Since innovation is central to growth, and productivity could well separate the winners from the losers, the people profile of a nation may provide valuable clues as to the potential for sustained growth.
Ruchir Sharma is the Head of Emerging Markets and Global Macro at Morgan Stanley Investment Management. His latest book, The Rise and Fall of Nations: Forces of Change in the Post-Crisis World (2016; W.W. Norton & Company, Inc.) analyzes the cycle of crisis, reform, revival, and complacency that appear to characterize most economies. The circle of life as he calls it appears to be a simplified version of the Tytler Cycle in History. Written primarily from a business investor's perspective, the book attempts to simplify the complexities surrounding economic theories into a set of ten rules. It makes for good reading although some o…

Reinventing Performance Management

At the best of times, performance management tends to be a sticky business. Whatever the method used, some employees are likely to be disgruntled and some likely to feel they did not receive a fair deal. Contrary to popular understanding, most ratings reveal more about the rater than they do about the ratee. Mount, Scullen, and Goff (2000) refer to this phenomenon as the "idiosyncratic rater effect." This effect accounts for nearly two-thirds of the variance in ratings while actual performance accounts for only one-fifth of the variance. A recent survey of executives found that 58% believed that their current performance management approach drives neither employee engagement nor high performance. It should come as no surprise, therefore, that many organizations have said goodbye to multiple objectives, backward-looking assessments, yearly reviews, and even 360-degree feedback tools.

It is one thing to find that existing systems are no longer useful in a fast-changing world.…

Using Your Whole Brain

For as long as one can remember, a debate has raged about left-and right-brain thinking. The right side of the brain has been associated with creativity while the left side has been associated with analysis and rational thought. An entire industry has spawned to "test" people about their proclivity and to place them in neat boxes in phenomena as serious as careers and personality.

Well, it is time to say goodbye to such stereotypes. With a little effort, we can make better use of our brains, and can excel in whatever we do. And you have the empirical research of scientists at the American Institute for Behavioral Research and Technology to be confident of the outcomes. Consider this: 74 city employees in Orange County, California, were subjected to a series of simple techniques. After eight months, the employees improved their capacity to generate new ideas by 55%, brought in additional revenues of $600,000 and saved $3.5 Million through innovative cost reductions.

Before yo…

The Future of American Growth

Robert J Gordon is a distinguished macroeconomist and economic historian at Northwestern University.  His latest work is aptly titled "The Rise and Fall of American Growth", a masterly treatise of 762 pages (2016, Princeton University Press). Filled with data, charts, and graphs, the book is as well-researched as one can ever expect from a scholar of such eminence.

The central thesis of Gordon's work is elegantly simple: for seven centuries, starting at 1300, the growth rate was fairly constant at around 0.2% per year (refers primarily to Britain and its colonies). When the USA became the dominant force in the global economy, the level shot up to 2.0% thanks mainly to some of the most wonderful inventions of the last one hundred years - electricity, centralized water supply and sanitation, the internal combustion engine leading up to the automobile, mass transportation systems, chemicals and pharmaceuticals that conquered many diseases, and the sociological impact of wo…