Archive for Harvard Business Review

Bad for Business: Where Business Schools Went Wrong

MBA Student at Business School

The golden era of the business school has ended. We’ve gone from a time when MBA programs were regarded as prestigious, pragmatic and even more selective than typical graduate programs to one where they’re something of an embarrassment.

Why? Warren G. Bennis and James O’Toole (authors of the Harvard Business Review article “How Business Schools Lost Their Way”) believe it’s because MBA programs have made decisions that are bad for business—both their own and that of the larger world.

By myopically focusing on scientific research, business schools are neglecting the needs of their students and ultimately failing their alumni.

This primarily shows up in their choice of faculty. Instead of hiring professors with experience in the business world, they are hiring academics whose knowledge is limited to the theoretical realm. Worse, tenure-track professors pressured to publish and conduct research end up focusing more on their careers than their students.

What students miss in this equation is the real-world knowledge and insights that help them navigate the situations they will confront once graduated. Subsequently, MBA alumni are floundering when faced with the complexities inherent to real-life business situations.

Real business is messy, confusing and morally ambiguous at times. It’s impossible to replicate these nuances in a laboratory setting, and faculty whose only experience lies in reading financial analyses and erudite studies rarely grasp what day-to-day activities are like on the ground.

Not only do today’s MBA graduates lack the skills they need to succeed in the corporate world, but they are not exceling as leaders or even securing decent jobs. Furthermore, they possess little understanding of business ethics, causing them to make dubious decisions that put their organizations, people and society at risk.

McGill University professor Henry Mintzberg blames the irrelevant MBA curriculum. Bennis and O’Toole believe the curriculum is merely a symptom of the larger disease.

The authors fault what they call the scientific model for treating business like an academic discipline instead of a profession. Students get lost in a maze of multiple regressions and economic analyses, and they aren’t equipped with the skills to map theory into practice.

Business is also a multidisciplinary field, encompassing everything from mathematics and economics to psychology, sociology and philosophy. Treating it as a solitary major does a disservice to their students.

The recent tilt toward the scientific model of business education may be a well-intentioned but misguided overcorrection of the early 20th century emphasis on job training. More akin to trade schools, these institutions were poorly regarded by both academia and business.

In 1959, reports issued by the Ford Foundation and Carnegie Foundation exposed these business schools for the inept institutions they were. Motivated by the demand for strong leadership during the postwar boom, both foundations offered grants to beef up business school research programs and credentials.

Chasing grant funds and credibility, business schools forgot about the deeper wisdom that comes from practical experience. After first experiencing a rise in substance and prestige during the sixties and seventies, business schools began their decline in the mid-eighties.

Rather than integrating practica and internships in which students can gain on-the-job experience, contemporary MBA programs set up hypothetical lab simulations to gauge how students will react in those kinds of situations. This is pretty silly when you consider how easy it is to set up an internship at a local business and how valuable it is to the student, the business and the institution’s town and gown.

By overemphasizing research and hard facts, business schools are overlooking emotional intelligence, the humanities and ethics—all areas, it turns out, vital to wise decision making and leadership. Qualitative may actually be more valuable than quantitative when it comes to stepping foot in the office.

That’s not to say business schools should eschew scientific research altogether. It just needs to be counterbalanced by relevant real-world experience.

There are exceptions, of course. Flagship institutions like UC Berkeley’s Haas School of Business and Harvard Business School integrate case studies as well as rigorous research into their curricula.

Former University of Dallas provost Thomas Lindsay astutely states, “[S]tudies showed that executives who fail—financially as well as morally—rarely do so from a lack of expertise. Rather, they fail because they lack interpersonal skills and practical wisdom; what Aristotle called prudence.”

Before Enron and other corporate scandals, business students spent only 5% of their time developing their moral capacities and the rest of their time on wealth maximization, says Lindsay. The Dallas business school attempted to reverse that formula by introducing a series of ethical exercises paired with liberal studies coursework.

As enlightenment spreads from business school to business school, perhaps the MBA will experience a renaissance, and we’ll enter a new golden era—one that deftly balances research, teaching, pragmatic experience and the humanities to graduate a more astute, empathetic and inspiring leader.

The Top 4 Employee Needs to Fulfill for Greater Happiness and Productivity

Business Leader Inspiring Employees

If you’ve been following this blog and other science of happiness research, you already know achieving employee satisfaction is key to creating a sustainable and productive workforce.

It’s simple, really. More satisfied employees = happier employees = more engaged employees = more productive employees = a mutually beneficial equation for everyone.

A 2012 Gallup meta-analysis of 263 research studies conducted across nearly 200 companies revealed that highly engaged employees translates into significantly more dollar signs—22 percent more, roughly. The Q12® report, titled “Relationship Between Engagement at Work and Organizational Outcomes,” found a 0.42 correlation between engagement and performance. Organizations whose employees ranked in the top half for employee engagement were almost twice as successful, and those in the 99th percentile showed quadruple the success rate over those scoring in the 1st percentile.

So how do you cultivate that employee engagement? Tony Schwartz and Christine Porath explore this question in “The Power of Meeting Your Employees’ Needs” at the HBR Blog.

According to the article, a 2013 Harvard Business Review survey of 19,000 people suggests meeting the following four needs is the secret:

Delivering Happiness Frameworks1) Renewal (physical). Employees are encouraged to take breaks to stretch, exercise, get fresh air or even power-nap. They return feeling rejuvenated and energized, ready to barrel through the next big task.

2) Value (emotional). When staff members feel valued by their coworkers and especially their supervisors, they are more motivated. We explore this formula extensively in our blog posts on The 5 Languages of Appreciation in the Workplace: Empowering Organizations by Encouraging People (Part 1 and Part 2).

3) Focus (mental). Employees who are bombarded with distractions, competing deadlines and inane meetings lose focus and clarity about their priorities. Organizations that give workers greater control over their own schedules so they can carve out focus time for intensive projects will see a corresponding rise in productivity.

4) Purpose (spiritual). Feeling part of something larger and more important than one’s self is crucial to employee happiness. Tony Hsiesh testifies to the significance of this factor to Zappos’ success in his book Delivering Happiness: A Path to Passion, Profits, and Purpose (see the Happiness Frameworks sidebar, graphics courtesy of the Delivering Happiness website).

The more needs met, the more exponentially engaged employees will be. Satisfy one need, and employees will be 30 percent more focused, 50 percent more engaged, and 63 percent more likely to stay with the company. Satisfying all four results in employees who are 125 percent more engaged than those whose needs are not being met.

The following graph (courtesy of HBR.org) illustrates the remarkable correlation between satisfaction of these four variables and performance.

Effects of Meeting Employees Needs Graph

Daniel Pink’s research backs up these findings. According to Drive: The Surprising Truth About What Motivates Us, people need these three things to feel motivated: 1) autonomy, 2) sense of purpose and 2) ability to master their endeavor.

Pink discovered that employee drive goes far deeper than dollars. Offering rewards like monetary bonuses actually decreases motivation in the long run because it depletes the intrinsic motivation derived from the work itself. The carrot wears out quickly, and it becomes the goal of the work rather than the actual process. Businesses would do better to ensure the work itself is gratifying.

Organizations that invest in cultivating employee happiness and engagement by meeting their primary needs wind up healthier, happier and ultimately richer.

Chris Cook can help your company get started on that path. Contact her at 541.601.0114 or chris@capiche.us to chart a course toward your brighter future.

Blue Ocean Leadership: 4 Steps to Boosting Employee Engagement

Surfer on a Blue Ocean Wave
There are half a trillion reasons why every American should care about employee disengagement. They’re called dollar bills, and that’s how many the US economy loses annually because of the 20% of discontented employees who undermine workplace productivity, according to Gallup’s 2013 State of the American Workplace report.

That counterproductive 20% is abetted by the 50% of apathetic employees who simply punch the clock and then count the minutes until they can punch out.

What about the remaining 30%? Those are the lonely few who are dedicated to doing the best job they can.

And why do you think one-fifth of the American workforce is so discontented? You guessed it. Poor leadership.

Blue Ocean Strategy

INSEAD professors of strategy and management; codirectors of the Blue Ocean Strategy Institute in France; and Blue Ocean Strategy authors W. Chan Kim and Renée Mauborgne offer some fresh ideas about how to reinvigorate the dispassionate 70%. They wrote about their findings in the May 2014 issue of Harvard Business Review.

Originally designed as a marketing model aimed at converting noncustomers into customers, Blue Ocean Strategy translates surprisingly well to the workplace. Viewing leadership from this new perspective, Kim and Mauborgne realized the fifth of disengaged employees represent the leaders’ noncustomers. That’s when they decided to apply their marketing strategy to building employee engagement—with stellar results.

Think about leadership as a service employees either buy or don’t buy. What can turn those non-buyers into loyal customers?

3 Leadership Approaches

According to the authors’ hundreds of interviews with managers and employees over the past decade, the following leadership approaches can help trigger the conversion.

1) Focus on acts and activities.

Instead of worrying about what kinds of people leaders should be, concentrate on what actions they can take to boost employee motivation and productivity. Actions are not only easier to change than personality traits, but they are also more measurable.

2) Tap into market realities.

Translated to the workplace, this means asking employees what leaders are doing wrong as well as what they could start doing to inspire employees to thrive.

3) Distribute leadership across all management levels.

Often organizations focus on executive leadership, but it’s the middle and frontline managers who tend to know employees better. By distributing leadership responsibilities across the top, middle, and frontline managers, organizations can access a deep well of often-untapped talent, thus enhancing engagement across the organization.

4 Steps to Stronger Leaders and More Engaged Employees

1) Recognize your leadership reality.

You have to understand where your leadership stands before you can plot a strategy for improvement. By using analytic visuals called As-Is Leadership Canvases, organizations can assess employees’ perceptions of how the top, middle, and frontline managers spend their time and energy. A cross-section of 12–15 respected managers leads this companywide conversation, with three subteams each focused on a different level of leadership. The team then compiles Leadership Profiles after a month to six weeks’ worth of interviews. These profiles identify the 10–15 dominant leadership acts and activities at each level based on how frequently they were mentioned during the interview process. The As-Is canvas charts these factors on the horizontal axis of the grid, while the degree to which leaders practice them is registered on the vertical axis. Typically, 20 to 40% of the acts managers tend to practice offer little value to employees, while on the flipside, 20 to 40% of the acts employees consider valuable are underpracticed by managers.

2) Develop alternative leadership profiles.

Once the team understands what managers are doing poorly as well as what they could be doing better, they can visualize positive alternative profiles. The team looks for cold spots (time-consuming acts that yield few benefits) and hot spots (actions not currently being taken that have the potential to energize employees). A second round of interviews is conducted to create the Blue Ocean Leadership Grid featuring these four areas:

a) Eliminate wasteful acts and activities.
b) Reduce not terribly beneficial acts and activities.
c) Raise existing beneficial acts and activities.
d) Create new beneficial acts and activities.

This grid is used to draft two to four possible To-Be Leadership Profiles.

3) Pick To-Be Leadership Profiles.

These aspirational leadership profiles are then presented at a “Leadership Fair” by the subteams. Participants include top, middle, and frontline managers as well as board members. The original senior team presents the As-Is canvases, establishing the need for change. This is followed by the subteams’ presentation of the To-Be profiles for each management group. The attendees vote on their favorite leadership profile, and the senior executives then ask attendees what prompted their votes.

4) Institutionalize new leadership practices.

The selected To-Be profiles are distributed to the top, middle, and frontline leaders, and meetings are held to discuss the actions that should be eliminated, reduced, raised, and created. Monthly follow-up meetings document employees’ feedback on their managers’ progress toward the new profiles. This routine check-in reinforces the desired changes and encourages accountability.

Fair Process

The principles of fair process—engagement, explanation, and expectation clarity—govern the four steps of Blue Ocean Leadership. Employees and managers at all levels feel ownership in the process, thus overcoming resistance to change and creating a sense of buy-in. Crucially, fair process fosters trust across the organization.

Get Started

Are you ready to try out Blue Ocean Leadership at your organization? Contact me at 541-601-0114 or chris@capiche.us to start the conversation today.

See the Blue Ocean Leadership website for more details.

Six Key Features of the Happiest Workplace on Earth

Honeybees on Flowers

Let’s pretend you’ve been given carte blanche to design the company of your dreams. What would that company look like? How would you do things differently? Why would your employees look forward to starting work each day?

You already know creating a happy workplace isn’t just about Casual Fridays and big paychecks. And the reasons for its importance go way beyond the individual. Companies are discovering that if they want to thrive, if they want productivity to soar, they need to invest in their human capital.

New research by the Hay Group reinforces this concept. Companies with highly engaged employees experience four times the revenue growth, 54% higher employee retention rates and 89% greater customer satisfaction than companies whose employees are not emotionally connected to the organization. And those engaged employees are 50% more likely to transcend their leaders’ expectations.

How do you create an environment that inspires this kind of firecracker enthusiasm? Rob Goffee and Gareth Jones have spent the last three years trying to answer that question. After surveying hundreds of executives around the world, they published their findings on the alchemy of the ideal workplace in the May 2013 Harvard Business Review.

Goffee and Jones identified six common practices of authentic, happy organizations. These companies:

1) Nurture individuality. According to research conducted by London Business School Professor Dan Cable, when employees feel free to be completely themselves at work, they are more dedicated, perform at higher levels and happily lend a helping hand to their peers. This inclusivity extends beyond conventional categories of race, age and gender to embrace intellectual diversity and personal eccentricities. There are no cultish cliques, bosses’ pets, pressures to conform or feelings of inequity. Ideas flourish in this multidisciplinary melting pot where English majors hang with accountants, artists with engineers and jocks with the IT crowd.

2) Practice open, honest communication. There is no trust without transparency, and authentic happiness requires a shared level of trust among all members of an organization. Don’t patronize your staff—empower them with knowledge. The more they understand—even when the news appears bad—the more potential solutions they can offer. And suppose you’re a branch office of a larger organization. Keep the corporate information flowing—even if it seems to change willy-nilly. You can create a culture of “We’re all in this together.”

3) Encourage employee development. Create the time and resources for people to pursue their passions. This goes deeper than skill-building, educational opportunities and professional development, although those are important. Maybe an employee has a yearning to take up graphic design, Spanish or creative writing. Even if the subject isn’t obviously related to their job, they may discover a hidden strength that, if nurtured, could end up benefiting the organization in unexpected ways. By awakening and developing these talents, the company not only helps the employee become a richer human being, but that employee may evolve to fill a new institutional role that enriches the overall organization.

4) Serve a meaningful purpose. Employees who feel part of a larger cause and who know their organization is making a difference in the world will wake early, stay late and work through lunch to help achieve that collective purpose. Their lives will be imbued with a meaning driven by the quest for a greater good, and they will be proud to share your company’s mission with others.

5) Offer work that is rewarding in itself. Rewrite job descriptions to focus on each person’s strengths and assign projects that allow employees to flex their creative muscles. Budding videographers can film commercials; short-story writers can compose marketing copy; comic book artists can design the company handbook. Keep inspiration flowing, and the organization will become a hotbed of innovation.

6) Don’t make employees follow mindless rules. In the 1999 comedy Office Space, about five different bosses chastise the protagonist for forgetting to put the new coversheet on his TSP reports. This has become iconic for the arbitrary busywork and “just-because” rules companies force their employees to follow. Pointless tasks breed resentment and dread—pretty much the last feelings you would expect to find in the happiest workplace on earth.

What Does a Happy Workplace Get You?

Goffee and Jones conclude, “People want to do good work—to feel they matter in an organization that makes a difference. They want to work in a place that magnifies their strengths, not their weaknesses.”

Makes sense, doesn’t it? And yet traditional, profit-driven business culture fails to cultivate its most valuable resource: employees. Creating a happy workplace is a win-win for the staff and the company. It’s time for our business models to reflect this growing, research-driven awareness.

Do these six principles describe your dream organization? Are there other characteristics you would add to this list? I’d love to hear about your experiences with positive workplaces.

For more about the benefits of happy workplaces, see my previous posts:

A New Report on Workplace Happiness

Is Your Work a Test of Endurance or a Labor of Love?

Learning About Happiness and Company Culture from the Big Dogs

Why Happiness at Work Trumps Employee Engagement and Job Satisfaction

Is Anyone Sick of Happiness of Work? I’m Not, and Here’s Why

The Value of Happiness: How Employee Well-Being Drives Profits

Is Happiness a Luxury Small Businesses Can’t Afford?

Wall Street Journal Measuring Happiness at Work

If Happiness Drives Performance, How Do I Get Happy at Work?

Cash in on Happiness

Civility Costs Nothing—and Buys Everything

Rudeness at Work

It Really Does Pay to Be the “Nice Guy”

With the science of happiness at work as a cornerstone of my business model, I am always interested in new research that illustrates how happy employees are more productive and creative, provide better customer service, are better team players, are sick less and stay longer. These days, there is a LOT of that research, and the findings continue to be consistent with these positive outcomes.

It amazes me that I still find people who resist the idea of happiness at work—or those who believe the statistics but think they don’t have the time or resources to invest in creating a workplace where happiness is part of the culture.

“Happiness at work? I’m not happy—why should anyone else be?” or “They should be happy to have a job.” or “We’re not here to be happy; we’re here to make a profit.” Then I remind them happiness at work boosts the bottom line, and their interest is piqued.

This month a new piece of research was published in the Harvard Business Review about civility and rudeness: “The Price of Incivility: Lack of Respect Hurts Morale—and the Bottom Line.” Guess what? Civility at work creates results similar to happiness at work, and rudeness at work creates results that correlate to unhappiness at work.

Kid Sticking Tongue OutDid you know rudeness at work is raging and is on the rise? According to researchers, 98 percent of workers polled said they experienced rudeness at work—with half of them experiencing it at least once a week, up from 25 percent in 1998.

Like unhappiness at work, rudeness at work undermines the bottom line. In a poll of 800 managers and employees in 17 industries, the researchers found the following statistics:

Among employees who have experienced incivility at work:

  • 48% intentionally decreased their work effort
  • 47% intentionally decreased the time they spent at work
  • 38% intentionally decreased the quality of their work
  • 80% lost work time worrying about the incident
  • 63% lost work time avoiding the offender
  • 66% said their performance declined
  • 78% said their commitment to the organization declined
  • 12% said they left their job because of the uncivil treatment
  • 24% admitted to taking their frustration out on customers

Other studies have found that creativity suffers, performance and team spirit declines, and customers who witness the rude behaviors turn away. Sounds a lot like what happens with unhappiness at work.

It also sounds like a recipe for disaster—not a way to increase an organization’s profits or become known as an employer of choice. And it’s expensive! According to a study conducted by Accountemps and reported in Fortune, managers and executives at Fortune 1,000 firms spend 13 percent of their time—the equivalent of seven weeks per year—mending employee relationships and dealing with the aftermath of incivility. And just think of the costs should consultants and attorneys be brought in to help settle a situation.

So what’s a leader to do?

In managing yourself, model good behavior. After all, the leader sets the tone of the organization. You are on stage, and your supporting cast is taking cues from you. Ask for feedback—what do your employees like and dislike about your leadership style? How does that relate to civility (or happiness) at work? What can you do to shift behaviors that are perceived poorly?

Coworker ConflictAnd keep a pulse on the organization. What’s really going on, and how are people treated and treating others? You need to be connected to your workforce and constantly striving to create a culture where people feel as though they have what’s needed to succeed.

In managing the organization, hire for and reward civility. If civility is a key attribute your culture values, put it above all else. For example, at Zappos, people are hired based on fit within the culture, and the most skilled person will be passed over if their values don’t match the values Zappos has deemed essential to its core. Share those values (and make sure civility is one of them) and demonstrate what it looks like to live those values. Be specific. Tie those to individual performance assessments and rewards, and celebrate circumstances in which the values of civility and respect shine brightly.

Rude or civil? Unhappy or happy? The choice is clear. Civil, respectful cultures enjoy the same benefits as cultures where people are encouraged and given a climate where they can succeed at work—that’s when they can reach their potential.

Today’s data show creating a culture of civility and happiness is not simply the morally right thing to do, it’s also the fiscally responsible thing to do.

Contact me for more specifics or for a culture check of your organization. Let’s see how your company can become an employer of choice—a place where people feel as though their contributions matter, a place that resonates with their values, vision, passion and sense of purpose. It is possible!