Workers on Tap: The On-Demand Economy

The rise of the on-demand economy poses difficult questions for workers, companies and politicians.

IN THE early 20th century Henry Ford combined moving assembly lines with mass labour to make building cars much cheaper and quicker—thus turning the automobile from a rich man’s toy into transport for the masses. Today a growing group of entrepreneurs is striving to do the same to services, bringing together computer power with freelance workers to supply luxuries that were once reserved for the wealthy. Uber provides chauffeurs. Handy supplies cleaners. SpoonRocket delivers restaurant meals to your door. Instacart keeps your fridge stocked. In San Francisco a young computer programmer can already live like a princess.

Yet this on-demand economy goes much wider than the occasional luxury. Click on Medicast’s app, and a doctor will be knocking on your door within two hours. Want a lawyer or a consultant? Axiom will supply the former, Eden McCallum the latter. Other companies offer prizes to freelances to solve R&D problems or to come up with advertising ideas. And a growing number of agencies are delivering freelances of all sorts, such as Freelancer.com and Elance-oDesk, which links up 9.3m workers for hire with 3.7m companies.

The on-demand economy is small, but it is growing quickly (see article). Uber, founded in San Francisco in 2009, now operates in 53 countries, had sales exceeding $1 billion in 2014 and a valuation of $40 billion. Like the moving assembly line, the idea of connecting people with freelances to solve their problems sounds simple. But, like mass production, it has profound implications for everything from the organisation of work to the nature of the social contract in a capitalist society.

Baby, you can drive my car—and stock my fridge

Some of the forces behind the on-demand economy have been around for decades. Ever since the 1970s the economy that Henry Ford helped create, with big firms and big trade unions, has withered. Manufacturing jobs have been automated out of existence or outsourced abroad, while big companies have abandoned lifetime employment. Some 53m American workers already work as freelances.

But two powerful forces are speeding this up and pushing it into ever more parts of the economy. The first is technology. Cheap computing power means a lone thespian with an Apple Mac can create videos that rival those of Hollywood studios. Complex tasks, such as programming a computer or writing a legal brief, can now be divided into their component parts—and subcontracted to specialists around the world. The on-demand economy allows society to tap into its under-used resources: thus Uber gets people to rent their own cars, and InnoCentive lets them rent their spare brain capacity.

The other great force is changing social habits. Karl Marx said that the world would be divided into people who owned the means of production—the idle rich—and people who worked for them. In fact it is increasingly being divided between people who have money but no time and people who have time but no money. The on-demand economy provides a way for these two groups to trade with each other.

This will push service companies to follow manufacturers and focus on their core competencies. The “transaction cost” of using an outsider to fix something (as opposed to keeping that function within your company) is falling. Rather than controlling fixed resources, on-demand companies are middle-men, arranging connections and overseeing quality. They don’t employ full-time lawyers and accountants with guaranteed pay and benefits. Uber drivers get paid only when they work and are responsible for their own pensions and health care. Risks borne by companies are being pushed back on to individuals—and that has consequences for everybody.

Obamacare and Brand You

The on-demand economy is already provoking political debate, with Uber at the centre of much of it. Many cities, states and countries have banned the ride-sharing company on safety or regulatory grounds. Taxi drivers have staged protests against it. Uber drivers have gone on strike, demanding better benefits. Techno-optimists dismiss all this as teething trouble: the on-demand economy gives consumers greater choice, they argue, while letting people work whenever they want. Society gains because idle resources are put to use. Most of Uber’s cars would otherwise be parked in the garage.

The truth is more nuanced. Consumers are clear winners; so are Western workers who value flexibility over security, such as women who want to combine work with child-rearing. Taxpayers stand to gain if on-demand labour is used to improve efficiency in the provision of public services. But workers who value security over flexibility, including a lot of middle-aged lawyers, doctors and taxi drivers, feel justifiably threatened. And the on-demand economy certainly produces unfairnesses: taxpayers will also end up supporting many contract workers who have never built up pensions.

This sense of nuance should inform policymaking. Governments that outlaw on-demand firms are simply handicapping the rest of their economies. But that does not mean they should sit on their hands. The ways governments measure employment and wages will have to change. Many European tax systems treat freelances as second-class citizens, while American states have different rules for “contract workers” that could be tidied up. Too much of the welfare state is delivered through employers, especially pensions and health care: both should be tied to the individual and made portable, one area where Obamacare was a big step forward.

But even if governments adjust their policies to a more individualistic age, the on-demand economy clearly imposes more risk on individuals. People will have to master multiple skills if they are to survive in such a world—and keep those skills up to date. Professional sorts in big service firms will have to take more responsibility for educating themselves. People will also have to learn how to sell themselves, through personal networking and social media or, if they are really ambitious, turning themselves into brands. In a more fluid world, everybody will need to learn how to manage You Inc.

The Economist. Click here for the link to the article.

19 Things You Should Never Say When You Quit A Job

Don’t gloat about your new offer, and never throw your colleagues under the bus.

There may come a time when you’ll decide to quit your job. And when you do, it’s imperative that you choose your words wisely.

“Whether you are quitting on good terms or bad terms, you don’t want to burn bridges,” says Dana Manciagli, a career expert and author of “Cut the Crap, Get a Job!” “The words you use when you inform your boss of your decision to leave can determine whether they will support you going forward. And you definitely want their support.”

She says people commonly regret what they say during their resignation because they are angry, nervous, or unaware of the consequences.

“There are two different scenarios that trigger a poor selection of words. One, the employee is quitting because they found another job,” Manciagli explains. “Many say disparaging things because they are going to ‘teach their prior company a lesson.’ Their ego is inflated and they are going to crap all over the company on their way out.” And two, the employee is quitting because their situation is bad, but they have no other job waiting. “These employees feel like the victim and are going to blame others, including their boss,” she says.

But the best “quitters” go out saying positive words, as painful as it may be, and talk about what they learned and what they will carry forward in their career. “And they use words that will get them hired back by the same boss at a later point in time, if needed,” she says.

To avoid burning bridges, Lynn Taylor, a national workplace expert and the author of “Tame Your Terrible Office Tyrant: How to Manage Childish Boss Behaviour and Thrive in Your Job,” suggests you take the time to write out your thoughts beforehand, “as your words will be remembered.” Highlight the positive aspects of working for your boss and the company, and why your move has to do with your career aspirations. “Pointing fingers or being negative about the reasons you’re leaving have no redeeming value.”

She says the moment you announce your resignation, your manager may feel a sense of shock or denial. “But that quickly turns into defensiveness and the onus is on you to counter that with the utmost diplomacy,” Taylor explains. “You can only benefit by keeping emotion out of the process, as no one has ever benefitted by burning bridges — or being anything less than humble when calling it quits.”

Here are 19 things you should never say when you’re resigning from a job:

“I’m leaving…today.”

Never quit without offering ample time for the company to complete the transition. “If you can offer more than two weeks, that reflects well on you, even though your company many not need it,” Taylor says. “Also find out during your conversation how and when your boss wants you to communicate your departure with fellow employees.”

“This is the worst company I have ever worked for.”

“You’re basically nailing the coffin shut on any opportunity to return to that company, or have the company be a positive reference,” Manciagli says. “There is no upside to bashing the company you are exiting. None.”

Instead you could say, “I believe I will be a better fit at another company.”

“You don’t know how to manage people.”

First, insults will get you nowhere. Second, it takes two people to be a great manager-employee team, Manciagli says.

You could say, “Although we both tried, our manager-subordinate relationship wasn’t where it could have been.” But best is to leave this out of the dialogue completely, she says.

“No one is happy here.”

Don’t try to suggest the ship is going down with you. “Even if it’s true, your coworkers won’t appreciate it, and you’re not their spokesperson,” Taylor says. “If they’re about to jump ship, that will be their task.”

“Other people are getting promoted, and I’m going nowhere, so I’m leaving.”

“It’s sad that the person who says this has not yet learned that their progress through the corporate ladder has virtually nothing to do with peers,” Manciagli says. “This is a person clearly not self-aware. They are taking no responsibility for their areas for improvement.”

“The product is not up to par.”

That won’t win you any points, even if you feel you are being constructive. “Once you’re parting ways, you’re already perceived as a turncoat, so you don’t want to suggest that you’ll be badmouthing their product or service in the marketplace,” says Taylor.

“I wasn’t compensated fairly.” / “This company’s pay is not market-competitive.”

Don’t make it about money. “A statement about your compensation, even though it may be true, will be perceived as a negative slam against the company in your future career endeavours,” Taylor explains. “This is a situation where you have to look at what you have to gain or, more specifically, lose by openly disparaging the employer’s choices, even if they led to your dissatisfaction.”

Manciagli agrees. “Unless you have done a statistically-sound market study, then you do not know if your pay was market-competitive.”

If you feel strongly about mentioning your salary, you could try: “I was fortunate enough to find a position that gives my family and I some more breathing room, financially.”

“I’m concerned about the company’s future.”

“Your vote of no confidence before you leave is like a block to the head before you smile and walk out,” says Taylor. You’re better off not sharing your misgivings and instead talking about the fact that you were seeking a different opportunity.

“He always blocked my progress on projects, and she was always rude and kept me out of the loop.”

Now is not the time to reveal issues you had with your coworkers, Manciagli says. “It’s too late. You are resigning.” This approach makes you look weak and blameful. “Just don’t do it. Talk about yourself only,” she suggests.

“I didn’t have enough to do.” / “I was always so bored.”

This statement shows a lack of initiative, and you’ll just be labelling yourself in their eyes as unmotivated. “Any blame placed on coworkers or your boss at this stage of the game is water under the bridge,” Taylor says. “Your best strategy is to be concise, professional, and show gratitude for the opportunity.”

“I kept my head down, did my job, and wasn’t rewarded in any way.”

News flash: Your paycheck and employment is your reward.

Manciagli says if you want more attention from your boss, such as thank-you emails or pats on the back, you should have communicated that. “Plus, excellence in our jobs is more than keeping our heads down. As a matter of fact, that strategy can backfire.”

“I already told my cube mates, so now I’m ready to tell you…”

No matter how bad your relationship is with your boss, you need to respect their position and tell them about your plan to leave the company before you share that information with anyone else in the office. “And you need them to support you at some level,” Manciagli explains. “There is never a good outcome from telling others before the boss. There is no such thing as a secret!”

Make your decision in private, with your family and non-work friends in confidence. Then, make an appointment directly with your boss, she says.

“I have a much better offer from a way cooler company.”

The last thing your soon to be ex-employer wants to hear now is how great your new employer will be. “Your best option is not to mention the company by name or discuss very much about them, other than the fact that they’re a better fit for xyz reason,” Taylor says.

“I couldn’t find you, so I’m leaving you a voice mail/email to let you know…”

Make every effort to meet in person when resigning. Something this important should not be left to an impersonal form of communication unless there’s no other option. After you’ve met in person, Taylor recommends sending your boss a polite and positive formal letter of resignation.

“Here’s what’s wrong with this job.”

Don’t offer unsolicited advice; it will appear haughty. “This is your opportunity to thank your employer for the training and opportunity,” Taylor says.

“I am definitely/definitely not open to hearing your counteroffer.”

First of all, don’t assume your employer will counter. And second, don’t announce your decision about whether you’re interested in hearing and considering it before they even initiate that conversation.

While experts tend to advise against accepting a counteroffer, it’s usually worth at least some consideration.

“Good luck. This is a sinking ship.”

This is a terrible thing to say. Manciagli says you should take the opposite approach, and leave off with something like, “I wish you and the company all the success going forward.”

Taylor says it can be challenging to refrain from saying these things and to stick to a script when parting ways with a boss. “Resignation is often the culmination of weeks, months, or years of pent-up frustration, and so it’s only natural that something will slip out that isn’t politically correct.” But if you remember to plan ahead, stay calm and dignified, and focus on preventing self-sabotage, it’s possible to avoid these phrases.

Business Insider

A personal approach to organizational time management

Improving the fit between the priorities of managers, their direct reports, and their supervisors—all the way up to the CEO—is a good place to start.

The biggest and most destructive myth in time management is that you can get everything done if only you follow the right system, use the right to-do list, or process your tasks in the right way. 

That’s a mistake. We live in a time when the uninterrupted stream of information and communication, combined with our unceasing accessibility, means that we could work every single hour of the day and night and still not keep up. For that reason, choosing what we are going to ignore may well represent the most important, most strategic time-management decision of all.

To illustrate, let’s look at the experiences of Todd,¹ the head of sales in a large financial-services firm and a direct report to the CEO. Todd had been struggling to change the way people approached the sales process. He wanted more measurement. He wanted people to target prospects that were more likely to bring in higher margins. He wanted people to be more strategic about which prospects to visit versus which simply to call. Finally, he wanted them to be more courageous about pursuing “stretch” prospects where the odds of success were low but the rewards would be high—and more willing to ignore prospects whose accounts weren’t likely to be particularly profitable.

“I’ve told them all this multiple times,” Todd said. “I’ve even sat them through a long training. But their behavior isn’t changing. They’re still selling the same old way to the same old prospects.”

Todd’s salespeople knew what he wanted from them and were able to do it. They also weren’t lazy; they were working long hours and were working hard. Rather, the problem was that Todd’s salespeople thought they could do it all. That’s why they resisted segmenting their markets or measuring the potential of each prospect before planning a visit: they didn’t want to miss any opportunities. Yet because their time was limited, they ended up missing some of the best.

If this problem bedevils salespeople in organizations like Todd’s, imagine its impact on senior executives. The scope, complexity, and ambiguity of senior leaders’ roles not only create near-infinite permutations of priorities but also make it more difficult to get real-time performance or productivity feedback. Is it any wonder that only 52 percent of 1,500 executives McKinsey surveyed said that the way they spent their time largely matched their organizations’ strategic priorities? (For more on this research, see “Making time management the organization’s priority^[1].”)

We don’t often place organizational problems (such as weak alignment between the priorities of a company’s strategy or poor collaboration among the senior team) in the domain of time management, which is generally seen as an issue for individuals. To meddle with someone’s to-do list or calendar feels like micromanaging. In addition, time management seems too simplistic a solution to a complex organizational challenge.

But in this case, the simplest solution may be the most powerful because most behavior-change challenges are simply about how people are spending their time. That’s precisely where individual time management and organizational time management need to intersect. The question is how. Here’s a straightforward approach.

Step one: identify up to five things—no more—that you want to focus on for the year. You should spend about 95 percent of your time on those things. Why five things? Why 95 percent of your time? Because getting things done is all about focus. If instead of spending 95 percent of your time on your top five, you spend 80 percent of your time on your top ten, you lose focus and things start falling through the cracks.

As an example, Todd’s five things might include the following:

1. Clarify and refine the sales strategy for higher margins.
2. Speak and write to spread the word to higher-margin prospects.
3. Visit higher-margin prospects and clients.
4. Develop and motivate a sales team that focuses on higher-margin clients.
5. Provide cross-silo executive leadership.

Your five things form the structure of your to-do list. Divide a piece of paper into six boxes, five labeled with one of your areas of focus and the sixth labeled “the other 5 percent.” That other-5-percent box is like sugar—a little might be OK, but no more than 5 percent of your day should involve activities that don’t fit into your five areas of annual focus.

Once you’ve defined your six boxes, populate them with the tasks from your overflowing to-do list. If there are tasks—and there will be—that don’t fit into one of your areas of focus, put them in the other-5-percent box. When I first started using a six-box to-do list, half of my tasks fell outside my top five. That changed within a day of using this to-do list as I learned to dismiss and delete the things that were distracting me from my strategic focus. (Of course, if the other-5-percent box is filled with mission-critical tasks that can’t be deleted and will take more than a few hours a week, that suggests your top-five priorities may not be right—a valuable realization.)

Step two: once you’ve created your own six-box to-do list, help each of your direct reports create his or hers. This is where alignment—not just of strategies but of actions—takes place. Each of your employees’ top-five things should come out of your top five. Your top five should come from your supervisor’s top five and so on, with every person’s top five ultimately traceable back to the CEO’s.

Clarifying priorities for daily action at the most senior levels of the organization is particularly important precisely because the most senior jobs are often the most complex and scattered. Ultimately, the CEO is responsible for everything that happens in the organization. But focusing on everything is a surefire way to accomplish nothing. So it is the job of the CEO—together with the board of directors—to identify just a few things that will take the highest priority for the entire organization.

In Todd’s case, his CEO had identified higher margins as one of his own top five. So Todd—who, remember, reported directly to the CEO—focused his top five on that. And Todd’s direct reports listed their own top five in line with Todd’s (exhibit).

Exhibit

How ‘management by six-box to-do list’ cascades priorities across an organization.

Step three: use these to-do lists to manage your employees more closely, without micromanaging. In one quick glance, you can look at their priorities, as well as the actions that they’re taking to move those top-five areas of focus forward. If they’re doing the wrong things, you can spot that immediately and guide them appropriately. And if they’re doing the right things, you can acknowledge them for that and help them succeed.

The power of this process lies in its simplicity and its concreteness. These are not top-five goals or top-five objectives. They form the structure of each person’s to-do list and translate, directly, into time spent on the job—which is the difference between getting something done versus simply declaring its importance.

In short, “management by six-box to-do list” encourages organizational transparency and strategic alignment. It also empowers executives, managers, and employees alike to push back when they’re asked to do too much work that distracts them from the areas of strategic focus. When people start doling out tasks that are not in the areas of focus, there’s a structure to bring the distraction into the open, to discuss it, and to make an intentional decision as to whether it’s worth accepting or resisting.

This approach takes the normal goal-setting process one step further, creating a much higher likelihood of follow through. Each day, managers and employees are connecting their day-to-day tasks with the organization’s priorities.

This is particularly useful in matrixed organizations, where people often have multiple dotted-line relationships to multiple managers, and in global organizations with cross-border lines of command that can be convoluted, resulting in friction between regional priorities, local management, and business-unit prerogatives.² In such instances, confusion increases, along with the complexity of the management structure. All managers believe that their priorities should take precedence. Tensions rise, along with passive-aggressive resistance and plain old procrastination due to overwhelming work demands.

The six-box to-do list clarifies this confusion by putting everything on paper and ensuring alignment—not just top down, but across the hierarchy as well. Each employee has her own six boxes—and if one dotted-line manager wants her to focus on something outside her top five, that becomes immediately evident and gets resolved at the level where it should get resolved: between the managers themselves.

Many organizations use MBOs (management by objectives), but those objectives are rarely looked at outside the annual performance review (or, in some cases, quarterly) and never translated into daily tasks. If a CEO is going to drive a strategy though an organization, the organization needs to build its daily actions around that strategy. Remember, the McKinsey survey found that only 52 percent of executives spent their time in ways that largely matched their organizations’ strategic priorities. The six-box to-do list should increase that percentage.

At first, when Todd started using the six-box to-do list, everyone got nervous. Some of the anxiety was about putting to-do lists on display. But after the first few days, that turned out to be a nonissue. The real source of discomfort was that Todd’s direct reports began to discard much of what they had previously planned to do.

It didn’t take long for them to gain confidence—and pleasure—in limiting their efforts to those most likely to pay off. That focus recently enabled one of Todd’s salespeople to make the largest, most profitable single sale that his division of the century-old company has ever made—without working weekends.

About the author

Peter Bregman is the author of 18 Minutes: Find Your Focus, Master Distraction, and Get the Right Things Done (Business Plus, September 2011) and the CEO of Bregman Partners, which advises CEOs and their leadership teams.

How to Repair a Damaged Professional Relationship

If you’ve spent enough time in the workforce, you almost certainly have a trail of damaged professional relationships behind you. That doesn’t mean you’re a bad manager or employee; it’s simply a fact that some people don’t get along, and when we have to rely on each other (to finish the report, to execute the campaign, to close the deal), there are bound to be crossed wires and disappointments.

When conflict happens, many of us try to disengage — to avoid the person around the office, or limit our exposure to them. That’s a fine strategy if your colleague is peripheral to your daily life; you may never have to work with the San Diego office again. But if it’s your boss or a teammate, ignoring them is a losing strategy. Here’s how to buck up and repair a professional relationship that’s gone off the rails.

First, it’s important to recognize that making the effort is worthwhile. Obviously it’ll ratchet tension down at the office if you’re not glaring at your colleague every time they enter the room. But resolving this tension will actually aid your own productivity. A core tenet of efficiency expert David Allen’s Getting Things Done approach is “closing open loops” – i.e., eliminating unresolved matters that nag at your mind. Just as you can’t rest easy until you respond to that scheduling request, you’ll have a much harder time focusing professionally if you’re constantly in the midst of fraught encounters.

Next, recognize your own culpability. It’s easy to demonize your colleague (He turned in the report late! She’s always leaving work early!). But you’re almost certainly contributing to the dynamic in some way, as well. As Diana McLain Smith – author of The Elephant in the Room: How Relationships Make or Break the Success of Leaders and Organizations – told me in an interview, “You may be focusing on another person’s downside – and then starting to behave in ways that exacerbate it.” If you think your colleague is too quiet, you may be filling up the airtime in meetings, which encourages them to become even quieter. If you think he’s too lax with details, you may start micromanaging him so much, he adopts a kind of “learned helplessness” and stops trying at all. To get anywhere, you have to understand your role in the situation.

Now it’s time to press reset. If you unilaterally “decide” you’re going to improve your relationship with your colleague, you’re likely to be disappointed quickly. The moment they fail to respond to a positive overture or (yet again) display an irritating behavior, you may conclude that your effort was wasted. Instead, try to make them a partner in your effort. You may want to find an “excuse” for the conversation such as the start of a new project or a New Year’s Resolution, which gives you the opportunity to broach the subject. “Jerry,” you could say, “On past projects, sometimes our perspectives and work styles have been a little different. I want to make this collaboration as productive as possible, so I’d love to brainstorm with you a little about how we can work together really well. 

Would that be OK with you?”

Finally, you need to change the dynamic. Even the best of intentions – including an agreement with your colleague to turn over a new leaf – can quickly disintegrate if you fall back into your old patterns. That’s why McLain Smith stresses the importance of disrupting your relationship dynamic. In the aftermath of a conflict, she suggests actually writing down a transcript of what was said by each party, so you can begin to see patterns – where you were pushing and she was pulling. Over time, it’s likely that you’ll be able to better grasp the big picture of how you’re relating to each other, and areas where you can try something different. (If you were less vehement, perhaps she’d be less resistant.)

We often imagine that our relationships are permanent and fixed – I don’t get along with him because he’s a control freak, and that’s not likely to change. But we underestimate ourselves, and each other. It’s true that you can’t give your colleagues a personality transplant and turn them into entirely different people; we all have natural tendencies that emerge. But clearly understanding the dynamics of the relationship – and making changes to what’s not working – can lead to markedly more positive results.

How to Repair a Damaged Professional Relationship
Dorie Clark

What Big Data Needs to Do to Grow Up

We are in an Information Revolution — and have been for a while now. But it is entering a new stage. The arrival of the Internet of Things or the Industrial Internet is generating previously unimaginable quantities of data to measure, analyze and act on. These new data sources promise to transform our lives as much in the 21st century as the early stages of the Information Revolution reshaped the latter part of the 20th century. But for that to happen, we need to get much better at handling all that data we’re producing and collecting.

Consider the more than $44 billion projected by Gartner to be spent on big data in 2014. The vast majority of it — $37.4 billion — is going to IT services. Enterprise software only accounts for about a tenth.

The disproportionate spending on services is a sign of immaturity in how we manage data. In his seminal essay, “Why Software is Eating the World,” Marc Andreessen pointed out that for each new technology wave, the money eventually shifts to software. Software spending represents an industrialization and packaging of work that would otherwise happen manually, as one-off services, within each organization. As markets mature, more of the processes move to partners and other providers, so the industry leaders can spend their time and energy on high-value processes that contribute to their competitive differentiation. Software is part of a broader ecosystem that lets businesses focus on activities that are core rather than context. Core, in Geoffrey Moore’s definition, is what a business’s customers cannot get from anyone else; context is all the other stuff a business needs to get done to fulfill its commitments.

To understand what that path to maturity might look like for big data, it’s helpful to look at another, similar transformation. Data is the raw material that we attempt to turn into useful information. We can learn something from the manufacturers who turned raw materials into achievements as complex as automobiles.

The earliest automobile manufacturers were “vertically integrated,” which is to say they pretty much did everything themselves. Contrast that with today’s automobile manufacturers, which source parts from a global marketplace of independent suppliers. A manufacturer like Ford might have more than a thousand Tier 1 suppliers.

By calling on a rich ecosystem of industrialized products and services, automobile manufacturers can focus on the high-value, core activities that differentiate their products while driving down the total costs of production. This shift has led to a dramatic increase in automobile capabilities, without a corresponding increase in costs.

Over the years, the automobile industry has embraced numerous innovations to achieve this transformation. These include:

• Standardization: From parts to specifications and protocols, standardization is the essential first step in building a mature ecosystem.
• Quality testing and controls: Standardization also includes the concept of quality controls, testing protocols, and acceptance testing to enforce adherence to standards.
• Design for manufacturing/design for assembly: Integrating manufacturing and/or assembly processes into product design has reduced manufacturing and assembly costs at the source.

The shift from vertically integrated manufacturing (doing everything in-house) to integrated and collaborative design, manufacture, and assembly has enabled us to build larger, more advanced and complex goods than ever before. It has reshaped our communities and lives.

Can we make a similar shift with data?

When businesses try to manufacture real insight and value from raw data, most are like the early manufacturers, doing nearly everything in-house. Despite recent technological advances, the task of turning data into information is characterized by vast inefficiencies.

That’s why we see such a huge spending on services — we haven’t figured out how to automate and industrialize different parts of the data processes. We treat nearly every data-related task as a high-value, core process, for which we must spend on specialized services. It’s all core, no context.

Until we find ways to start treating some of the data tasks as contextual — to industrialize those processes — then we will be limited in what we can accomplish with data.

To industrialize these processes, we will need advances comparable to those that have occurred in manufacturing, including:

• Data standardization, particularly industry-specific standards and taxonomies.
• Data quality processes, such as advances in data integration/cleansing and quality control.
• Third-party data services (i.e., data clouds or “industrialized data services” in Accenture terminology) that enable data sharing and exchange at scale, between applications and organizations.
• Vertical data applications that understand all aspects of data relating to a specific task (e.g. IT Security).
• Data assembly, meaning dynamic assembly of raw data, processed data, and contextualized data.
• Industry cooperation in sharing the data that is “context” and common to all players.

With the ability to standardize data (akin to parts standardization in manufacturing) and use those standards in multiple applications, companies can begin to partner, outsource and collaborate on much of the work of involving in turning data into insight. The more that companies can share and repeat the context processes around different types of data, the more resources they have to invest in the higher-value, core data processes.

What Big Data Needs to Do to Grow Up
Mahesh S. Kumar

How to Negotiate with Someone More Powerful than You

Going into a negotiation with someone who holds more power than you do can be a daunting prospect.  Whether you are asking your boss for a new assignment or attempting to land a major business deal with a client, your approach to the negotiation can dramatically affect your chances of success. How can you make the best case for what you want?

What the Experts Say“There is often strength in weakness,” says Margaret Neale, the Adams Distinguished Professor of Management at Stanford Graduate School of Business. Having power typically reduces a person’s ability to understand how others think, see, and feel, so being in the less powerful position actually gives you a better vantage to accurately assess what the other party wants and how you can best deliver it. And when you do your homework, you’ll often find you’ve “underestimated your own power, and overestimated theirs,” says Jeff Weiss, a partner at Vantage Partners, a Boston-based consultancy specializing in corporate negotiations and relationship management, and author of the forthcoming HBR Guide to Negotiating. Here’s how to negotiate for success.

Buck yourself up“Often we get fearful of the threat of competition,”says Weiss. We worry there are five other candidates being interviewed for a job, or six other vendors who can land a contract, and we lower our demands as a result. Do some hard investigation of whether those concerns are real, and consider what skills and expertise you bring to the table that other candidates do not. The other side is negotiating with you for a reason, says Neale. “Your power and influence come from the unique properties you bring to the equation.”

Understand your goals and theirsMake a list of what you want from the negotiation, and why. This exercise will help you determine what would cause you to walk away, so that you build your strategy within acceptable terms. Equally if not more crucial is to “understand what’s important to the other side,” says Neale. By studying your counterpart’s motivations, obstacles, and goals, you can frame your aims not as things they are giving up to you, but “as solutions to a problem that they have.”

Prepare, prepare, prepare“The most important thing is to be well prepared,” says Weiss. That involves brainstorming in advance creative solutions that will work for both parties. For example, if the other side won’t budge from their price point, one of your proposals could be a longer-term contract that gives them the price they want but guarantees you revenue for a longer period of time. You also want to have data or past precedents at your disposal to help you make your case. If a potential client says they will pay you X for a job, having done your research allows you to counter with, “But the last three people you contracted with similar experience were paid Y.” Preparation gives you the information you need to “to get more of what you want,” says Neale.

Listen and ask questionsTwo of the most powerful strategies you can deploy are to listen well, which builds trust, and pose questions that encourage the other party to defend their positions. “If they can’t defend it, you’ve shifted the power a bit,” says Weiss. If your boss says he doesn’t think you are the right addition to a new project, for instance, ask, “What would that person look like?” Armed with that added information, says Neale, “you can then show him that you have those attributes or have the potential to be that person.”

Keep your coolOne of the biggest mistakes a less powerful person can do in a negotiation is get reactive or take the other person’s negative tone personally. “Don’t mimic bad behavior,” says Weiss. If the other side makes a threat, and you retaliate with a threat, “you’re done.” Keep your side of the discussion focused on results, and resist the temptation to confuse yourself with the issue at hand, even if the negotiations involve assigning value to you or your product. “Know what your goals are and direct your strategy to that and not the other person’s behavior. You have to play the negotiation your way,” Weiss says.

Stay flexibleThe best negotiators have prepared enough that they understand the “whole terrain rather than a single path through the woods,” says Weiss. That means you won’t be limited to a single strategy of gives and gets, but multiple maneuvers as the negotiation progresses. If the other party makes a demand, ask them to explain their rationale. Suggest taking a few minutes to brainstorm additional solutions, or inquire if they’ve ever been granted the terms they are demanding. Maintaining flexibility in your moves means you can better shape a solution that’s not only good for you, says Neale, but also makes them “feel like they’ve won.”

Principles to Remember

Do:

• Put yourself in their shoes — it’s crucial to understand what’s important to the other side
• Remember your own value — you are at the table for a reason
• Ask questions — you’ll get valuable insight into their motivations and interests

Don’t:

• Wing it — nothing beats good preparation
• Depend on a single strategy — develop a range of responses to push the negotiation in your favor
• Copy aggressive behavior — if they make threats or demands, stick to your goals

Case Study #1: Do your homeworkBen Koeneker knew the odds were stacked against him. Then the head of business development for a midsize Midwest telecom company, he was trying to convince Siemens, the multibillion-dollar electronics conglomerate, to give his firm an exclusive distribution contract for a new business communications product.  At the time, his $28 million company was known more for refurbishing than distribution. “We were tiny,” he says. “We were the ant shouting at the elephant.”

Koeneker did copious amounts of research prior to sitting down at the table. He researched Siemens products and why their current channels of distribution weren’t working well. He also made sure he knew that his own company could deliver on every level, preparing counterarguments for any doubts that might arise. “I knew we couldn’t pretend we could do something we couldn’t do,” he says.

When the negotiations began, he emphasized the pros of his company’s distribution model, rather than the cons he felt currently existed in Siemens’ current method. “If you spend too much time talking about the negatives, you’re basically telling them that they’re doing their business wrong.” He also pointed out that signing with his firm would free up money to devote to marketing, which he knew from his research was something that Siemens wanted.

A turning point came when a senior Siemens executive said that while he was impressed with the proposal, he wondered if Koeneker’s company could scale effectively if the product line took off. Two rivals to Koeneker’s firm, the executive said, were bigger and could more easily handle growth. “I turned to him and said, ‘Are those two companies interested in distributing your product at this time?’” Koeneker says. “I already knew the answer from my research that those companies had turned them down.” He followed up by adding that while his firm was small, it was better thought of as “boutique,” with the unique ability to focus completely on the Siemens brand.

Shortly after, they inked the contract.

Case Study #2: Know your valueManagement coach Ginger Jenks didn’t want to lose her client. Michael* had asked her to work on a side consulting project, but balked at her proposed fee. Though he had been paying her usual rate for several years, he went into “hard negotiation mode” for the extra work, Jenks says. “He told me he could get someone else for less than a third of my price.”

Jenks valued Michael’s continued business, but she knew she wasn’t willing to lower her rate. “I was fairly confident that he wanted me to do the work,” she says, “and I was certain that I did not want to feel ‘nickel and dimed’ on the project.” She decided her strongest strategy was not to take it personally that he was acting so insulted by her price. “I knew it was just a negotiating tactic on his end.”

When they met again to discuss terms, Jenks held fast to her initial proposal. She knew from hearing him relate stories of past negotiations that he respected strength and tenacity. She also knew that he valued good work above all else, and likely didn’t want the hassle of finding someone new.

At the table, Jenks stressed their great track record together, suggesting that if he could find someone who could do as good a job as he knew she would do, he should go elsewhere. Throughout, Jenks reminded herself that negotiating “is a little like dating,” she says. “If you are too interested, you lose power. But if you can remain calmly interested but still detached, that creates power.”

Michael thought it over for a few days, and then accepted Jenks’s original proposal. “It’s critical to remember that you have something the other person wants also,” she says. “Even if you aren’t in the power position, you have something to offer.”

*not his real name

How to Negotiate with Someone More Powerful than You
Carolyn O'Hara

The Secret to Lean Innovation Is Making Learning a Priority

 
Lean innovation is being embraced by everyone — from the smallest start-ups to the largest global organizations. But in most cases, it’s still falling well short of its full potential because it either lacks or fails to tightly integrate with the mechanisms needed to systematically capture lessons learned and share them outside the team. And that’s where the money is in innovation.

Lean innovation embraces a philosophy of not letting perfection get in the way of progress. It leverages the Pareto principle that 20% of a product’s features (what’s distilled down into the minimal viable product) will most likely deliver 80% of the benefits sought by customers.

As an approach, lean innovation lends itself especially well to corporate cultures, often engineering ones and others strongly focused on process-improvement programs such as Six Sigma. Its straightforward, step-by-step methodology makes it relatively easy to explain and to implement:

• Identify the minimal viable product.
• Develop a version rapidly and test it with customers, ideally in a real-world competitive situation.
• Repeat the process until the core product is competitive or pivot to explore a new approach.

Lean innovation stands in stark contrast to conventional approaches to product development in which teams expend enormous effort trying to create a perfected, many-featured product over an extended period without sufficient in-market customer feedback. The resulting new products are often too expensive, too complicated, too different from what customers want, and too late to market.

But an exclusively process-driven view of lean innovation obscures the underlying reason for its power. And without a deeper understanding, we limit our ability to fully benefit from its potential.

When I worked at Nielsen, I led a study of innovation best practices in the consumer-packaged-goods (CPG) industry with companies like Procter & Gamble and Kraft that revealed why top-performing companies average 600 times more revenue from their new products than the lowest performers. The research tied variations in new product revenue at almost 30 global companies to differences in processes, culture, organizational structure, senior executive leadership roles, and investment.

One of the key findings was that learning has far and away the single greatest impact on revenue from new products. And creating a better environment for learning is what lean innovation does so well. Its focus on the most important product attributes and rapid cycling of trial and error — ideally in the real-life competitive environment — accumulates critical knowledge at a rapid clip.

In other words, lean innovation is not a better innovation process; rather it’s a more efficient learning process. And by combining the lean perspective with innovation research from CPG companies, we can vastly improve the effectiveness of the lean innovation approach. Here is what the research tells us:

• Companies with mandatory formal debriefs of both success and failure following new product launches average about 100% more revenue from new products in comparison to companies that don’t formally debrief.
• When debriefs are led by an outside third party, the revenue increases substantially more.
• And when the learnings are captured in a knowledge management system, revenue jumps again.
• Companies that apply these learnings to creating, continuously improving, and strictly following decision-making criteria for the evaluation of potential new products average about 130% more revenue from new products.

Success can skyrocket by simply adding the above steps to a lean innovation process.

But this research also points to a cautionary note regarding lean innovation. Given that lean innovation teams move so quickly, the learnings are less likely to be captured than in traditional, slower approaches to product development. Secondly, given that lean innovation teams often exist in parallel with conventional product development teams, valuable learnings from lean teams are not always transferred to the development side.

We need to think of lean innovation as a process that drives more efficient learning. But to maximize success, lean innovation must be married to practices that effectively capture these rich lessons and make them readily available to everyone within the organization.

The Secret to Lean Innovation Is Making Learning a Priority
Tom Agan

How to Get Involved Without Micromanaging People

One of the more vexing problems most managers face every day is how to get involved in the work of their people without doing the work themselves or micromanaging those doing it.

You can resolve this challenge with the same approach that we described in our previous blog — the technique we call Prep-Do-Review. In this simple but often forgotten action model, you think of every activity not as one step — doing — but three distinct steps: prepare to act, act, and then reflect on the outcome and what can be learned from it.

Last time, we focused on how you can convert everyday activities into tools for making managerial progress — moving toward goals, developing people, building a team, creating and sustaining a network, and all the other things managers are supposed to do but never seem to have the time to do.

Here we focus on using Prep-Do-Review with your people. Start by expecting your people to use Prep-Do-Review themselves in their work. Not only will it make them more effective, but it will provide a way for you to become involved in their work as appropriate for the person and the situation.

This is the way it works:

Prep: Start by previewing people's plans with them and suggesting changes, if necessary. You do this by asking crucial questions. What are you going to do? Why — for what purpose? How will you do it? How can you use this to make progress on our goals and plans? Who should be involved or kept informed? How can this be used to help you learn and get better? What if your assumptions are wrong or the unexpected happens? This is how you move your group's purpose, plans, and work forward, how you coach and develop others, how you delegate more confidently, how you assure yourself that someone is well prepared and ready to act on her own.

Do: Based on what you learned in the Prep stage, you can decide whether and how to be involved in the doing of the activity. Working with a novice, you may want to perform the activity yourself while the person observes. Next, you may want to monitor periodically as the person does the activity and then give them feedback afterward. Thereafter, you probably don't need to be present at all — the Prep and Review stages are where you'll be involved.

Review: Great managers make post-action review a regular practice for themselves and their people. You can make it the focus of a one-on-one after an activity has been completed. Or it can be part of periodic meetings with each of your people or a standard procedure you go through in the updates your people provide at staff meetings. Be sure to model what you expect when you describe something you did — Here's what we learned. Next time we'll do it this way.

Remember to do a review regardless of the outcome of an action — failure or success. We are much more likely to reflect on our failures. Too often, we don't take time to learn from our accomplishments and never really understand the keys to our success and what lessons we can take forward.

Most of your managerial interactions with people will occur in the Prep and Review stages. Only with someone inexperienced or in situations of high stakes and high risk will you, or should you, be involved in the actual performance of a task.

Used this way consistently and consciously, Prep-Do-Review becomes a powerful management tool that will improve how you manage your people. By giving you ways to be involved without directly intruding as your people do their work, it will make your interactions with them richer, improve outcomes, help people learn, and make you a better delegator.

If you operate this way as a boss consistently, you'll find certain core management tasks become easier and more systematic. It will let you delegate more intelligently, based on both a person's skill and experience level and on the situation. It will help you coach people more effectively; indeed, it will help you turn many tasks into learning experiences. And it will let you use your time more effectively by helping you determine when you do and don't need to be involved.

With very experienced people, and especially with routine tasks, you needn't be involved in either Prep or Do, but as a boss you never completely let go of the Review stage. You may not review outcomes after every task, but ongoing performance review is something you'll never give up entirely.

If you think about it, Prep-Do-Review is the fundamental cycle of activities by which effective bosses manage — through a perpetual loop of prep-do-review-prep-do-review. By using it to become more mindful and deliberate in all you do, it will help you convert mundane workaday activities into management activities. It will help you make progress through the daily work. And it's the way you guide your people, produce results, and help them learn without inserting yourself unnecessarily into what they do. It's not the solution to every management challenge, but it's a powerful approach and the closest thing to a management secret that we know.

Linda Hill & Kent Lineback - Harvard Business Review