Insights #8: January 2019

Distilled lessons, ideas and wisdom from the past month

Content summary
1: Practical tips on how to make employees more productive and happy
2: The lessons that successful rock bands offer company managers
3: The nature of technological revolutions and why China may lead the development of AI
4:  A medley of advice on how to establish and maintain new habits
5: Why personal investments should be used as a hedge against employment income
6: Insights on effectively approaching complex enterprise sales
7: Tips for having better conversations
8: Why products should be sold on the basis of their benefits rather than features
9: What psychology reveals about finding a professional calling
10: Six ways to more effectively communicate divisive issues such as climate change

 

1: It doesn’t have to be crazy at work –  ideas to keep your workplace happy and healthy

An extract from and review of the book It Doesn’t Have To Be Crazy at Work, written by the founders of (successful) team planning software company Basecamp, provided some excellent advice on improving work life for employees.

The authors argue that work is becoming increasingly involved and time-consuming as a result of two prevalent features of the modern business landscape:

1: ‘The workday is being sliced into tiny, fleeting work moments due to an onslaught of physical and virtual distractions.’
2: ‘An unhealthy obsession with growth at any cost sets unrealistic expectations that stress people out.’

Consequently, Basecamp has adopted a number of approaches designed to counter these:

1: Considered communication: New ideas are not pitched in meetings, which encourage people to react rather than reflect (silence in a meeting feels awkward). This disrupts the presenter, making it difficult for them to convey a full and structured argument, and is an inappropriate way of addressing ‘fragile new ideas’. At Basecamp, ideas / presentations are first circulated and reviewed in written format, with people given time to digest these before commenting.

In addition, there is no expectation that queries are dealt with straight away, which is in any case unrealistic. Allowing more time for a response increases the likelihood that it will be considered and helpful.

2: Reasonable hours: Staff at Basecamp are not expected to work excessive hours, as ‘creativity, progress and impact do not yield to brute force’, while stretched managers can become counterproductive. Staff work 40 hour weeks, dropping to 32 hours (across four days) in summer, receive subsidised holidays, are entitled to a one month sabbatical every three years and are given the ‘right type’ of perks, which aren’t simply designed to keep them in the office for longer. Work ethic should not be equated with long hours, and companies need not operate frantically in order to be successful.

3: Prioritise employee focus: Many companies are highly protective of their money, brand and ideas, but profligate with employee time and attention. Basecamp does everything possible to preserve both (the authors note that ‘partial attention is barely attention at all’). One strategy is to replace status meetings (eight people in a room for one hour costs the company eight hours, not one) with the periodic circulation of updates. This also creates larger blocks of free time, which are far more conducive to tackling work.*

Similarly, ‘fractured hours’ comprising many small tasks are recognised as inefficient (it takes time and mental effort to switch and adjust) and stressful, thus any practices that require these are discouraged.

The book also notes that modern offices, in particular those with an open-plan design, create constant interruptions**. In order to provide conditions conducive to working, Basecamp imposes ‘library rules’, with discussions requiring more than a whisper held in separate meeting rooms, and promotes the ‘joy of missing out’ so that people can concentrate on their own work.

4: Set realistic expectations: rather than establishing a goal and committing to do ‘whatever it takes’ to reach it, the authors suggest asking instead ‘what will it take’. As they write, the former approach may be necessary in some outlier scenarios, but generally leads to unreasonable expectations, gross underestimations of what is required to reach them and sloppy work. The latter approach is ‘an invitation to a conversation, one where we can discuss strategy, make tradeoffs, make cuts, come up with a simpler approach or even decide it’s not worth it after all. Questions bring options; decrees burn them.

5: Modest objectives: too many companies adopt grandiose aims to ‘disrupt’ and ‘change the world’. However, this induces stress and can lead to neglect of those within the organisation. In most cases, managers would do better to focus on satisfying customers and treating staff fairly.

The authors do acknowledge that such practices may not be possible at larger, listed organisations that are more constrained by investor pressure.

 

*For more on this topic, see Paul Graham’s musings on balancing a ‘maker’ and ‘manager’ schedule. **See this recent study on the impact of open-plan offices on collaboration.

 

2: A rocker’s guide to management

Writing in 1843 magazine, Ian Leslie looks at the surprising management insights that successful bands may provide.

The parallels between rock groups and businesses are numerous. Many successful music groups operate at the scale of sizeable corporations. Like bands, many businesses now place great emphasis on the creativity that arises through collaboration, while successful company founders or CEOs can now attain ‘rockstar’ status.  Successful startups and bands both need to navigate the tricky transition from a group of friends to a complex organisation, a process that introduces stress and unwanted responsibilities, while often uncovering previously irrelevant weaknesses. Both struggle with the issues of how to achieve synergy within a group of talented people and then keep them together, involving a ‘delicate balance of deference and respect that sustains the relationships between co-workers in any workplace’.

Leslie identifies four approaches to the leadership / management of rock groups:

1 – Friends: The Beatles had no designated frontman (all four members could sing lead vocals), dressed in a similar style and took steps to ensure that the group remained balanced. But while research has shown that having friends at work generally makes people more motivated, happier and higher performing, it can also add emotional challenges as a result of having to reconcile conflicting aspects of co-worker and friend relationships. Working with friends can be exhilarating when things are going well, but makes challenges or disagreements far more difficult to deal with. The Beatles split after seven years at the top.

2 – Autocracies: Particularly where a band has a dominant creative driving force (such as Bruce Springsteen and the E Street Band), an egalitarian approach to decision making and income splitting is normally unsustainable. Warren Zanes, biographer of Tom Petty (of Heartbreakers fame) suggests that ‘bands start off as exercises in us-against-the-world idealism, in which success lifts all to equal heights. The ones that don’t break up before they reach a recording studio are the ones that adjust their philosophy in order to become a business. A redistribution of power is necessary.’ Of course, any autocrat must be sufficiently talented to make the situation amenable to others.

3 – Democracies: REM operated on the basis of group consensus for all creative and commercial decisions, with each member given a veto right. Each also received an equal share of all royalties, regardless of the contribution to the relevant song.  Coldplay follows a similar model. As in business, ego plays a role in the behaviour of many musicians and so such structures are rare. When they work, they rely on the correct balance of personalities and a shared understanding, as well as a mutual trust that each member has the group’s interests at heart, and that each is able and willing to contribute to the same degree. A shared vision also helps.

4 – Frenemies: Within many long-lasting bands, such as the Rolling Stones, the personal relationships between members can be strained but remain feasible when the band is viewed as work. In these cases, it is important to have division of responsibilities.  The longevity of bands like the Rolling Stones also results from the fact that they do not shy away from conflict, leading to resolution rather than festering. ‘Ernest Bormann, a scholar of small-group communication, said that every group has a threshold for tension that represents its optimal level of conflict. Uncontrolled conflict can destroy the group, but without conflict, boredom and apathy set in.’ Some commentators believe that bands that do not fight may be ‘creatively moribund’.

It may be that, in both business and music, there exists a trade-off between creativity and stability. The emotional intensity underpinning the Beatles’ output seemingly made the group fragile while, after an initial period of musical innovation, the Rolling Stones established a more stable but less creative professional arrangement that has enabled the band to endure.

Leslie concludes by noting that ‘Marie-Louise von Franz, a psychoanalyst, wrote that “whenever one is in a group…one has to draw a veil over a part of one’s personality.” Gains from collaboration are traded off against self-expression. Occasionally, she said, it’s the other way around: a group can become united in spirit and each individual expresses themselves more fully than they would be able to by themselves. A “superpersonal harmony” prevails. This rare condition, says von Franz, is what lies behind myths such as the Knights of King Arthur. If the rock group is a modern myth, then perhaps we venerate the Beatles most of all because they seem to embody the possibilities of perfect harmony. But in the fallen world of business, it may be better to be guided by the Stones.

 

3: Why China can do AI more quickly and effectively than the US

An excerpt from AI Superpowers: China, Silicon Valley, and the New World Order by Kai-Fu Lee, published in Wired, covers a number of interesting observations about the nature of technological revolutions.

Lee notes that technological revolutions are driven by both fundamental discoveries and the practical application of these.  As a sector matures, and particularly where the potential benefits are widespread, focus shifts from invention to implementation, meaning that ‘the center of gravity quickly shifts from a handful of elite researchers to an army of tinkerers‘ that have sufficient expertise to develop real world applications. For example, Edison’s fundamental breakthroughs in harnessing electricity led to the widespread application of his discoveries in a huge array of applications.

Lee argues that the Artificial Intelligence (AI) sector is already at the implementation stage, with most headline-grabbing developments simply reflecting the application of the same breakthrough  (deep learning and related techniques). While other fundamental developments may occur, and the US is most likely to develop these, at present China is a leader in implementation, a process facilitated by the following:

Speed: China represents a huge market with significant levels of capital and entrepreneurs that move quickly to spot opportunities, build products and change strategy where required. On the other side, the market is quick to embrace new ideas.

Execution: Chinese entrepreneurs are less averse to tedious or risky tasks, while the absolute control of Chinese CEOs makes execution more effective.

Product quality: Fierce competition forces entrepreneurs to quickly and relentlessly improve their offering. As a result, Chinese replicas of US business models have in many cases surpassed the original (e.g. Wechat offers much more functionality that WhatsApp).

Data: The huge Chinese market generates vast quantities of data, which is central to the development of machine learning models.

Government support: While the role of government is often trivialised in the US and Europe, the Chinese government is providing sophisticated support in three important ways:

1 – Setting the tone to legitimise a burgeoning industry, encourage adoption and stimulate people to move into it.

2 – An approach that allows unproven technology to be launched early and quickly and adds regulation at a later stage if necessary.

3 – Provision of infrastructure, such as smart roads for autonomous vehicles.

 

4: Developing better habits

‘How long are you going to wait before you demand the best for yourself?’
– Epictetus

With 2019 just getting started and resolutions fresh in the minds of many, the subject of developing new habits has predictably been written about widely in recent weeks.

Writing in the FT, habit specialist Wolfgang Mittelmaier explains that ‘every habit consists of three parts: a cue, a behaviour, and a reward. The cue can be entering your bathroom, the habit brushing your teeth, the reward the satisfying feeling of cleanliness in your mouth…If you want to create a new habit [and hence know the desired behaviour], you need to make clever decisions about the cue and the reward.‘ He notes that some researchers believe that it can take up to three months to fully ingrain a new habit, but that tracking it while it is forming (perhaps with the help of an app) can be beneficial, for instance through signalling if cues or rewards are working or need to be changed.

The good news‘, he writes, ‘is that once you change one thing, the next becomes easier, and so on. The brain creates a kind of “meta habit” of being successful in creating new habits or abandoning bad ones. Just like big organisations, a small change can open up the desire to commit to ever bigger changes.

Reflecting some of this advice, in a post of Medium author Ryan Holiday outlined some useful approaches to setting and sticking to habits:

1 – Think small: small initial commitments make it relatively easy to start a new habit, providing momentum from which to build, and in themselves may add up to major improvements over time.

2 – Create a physical reminder: linking a commitment to a physical object helps to provide it with more gravitas than it has as an idea alone. For this reason, Alcoholics Anonymous provides its members with small tokens to carry with them.

3 – Remove barriers: make it as easy as possible to follow a new habit. Examples include placing exercise clothes next to the bedroom door the evening before a morning run.

4 – Piggyback new habits on old habits: if possible, integrating new habits into those already established can make them easier to adopt. For instance, adding reading time onto the end of established meditation sessions, or integrating healthy eating into exercise routines.

5 –  Surround yourself with the right people: Writer / entrepreneur Jim Rohn once quipped that people are the average of the five people they spend the most time with. Mixing with others that adhere to, or at least do not hinder, a desired habit will make it easier to follow.

 6 – Commit to a challenge: leveraging external initiatives to cultivate a habit, for instance by signing-up to an organised run if trying to exercise more, helps to reduce the mental burden of constantly having to decide how to stick to the new habit, while enabling focus.

7 – Make it interesting: involving others, adding an element of competition or monetary incentive all help to maintain interest in pursuing a new habit.

8 – It’s about the ritual: establishing and following a consistent sequence of steps that lead to the desired behaviour means that simply starting may be all that is required.

9 – It doesn’t have to be an everyday thing: sprints or batching may be more effective than consistent application for some people or in some contexts.

10 – Focus on yourself: prioritise the change over  less important pursuits. As stoic philosopher Epictetus said, ‘If you wish to improve, be content to be seen as ignorant or clueless about some things.

11 – Make it about your identity: adopting a habit as part of an identity / lifestyle / ideology makes it easier to stick to. Using ‘I don’t’ rather than ‘I can’t’ should deter others from attempting to sabotage a burgeoning habit.

12 – Keep it simple: manageable, realistic and easy to follow habits are much more likely to be adhered to.

13 – Pick yourself up when you fall: don’t treat lapses as catastrophes, but rather recognise that these are inevitable and simply correct course as soon as possible.

Similarly, in an article on Futurity, author and lecturer in psychology Tim Bono provided a slightly different take on the key elements involved in cultivating habits:

  • Motivation: Identify why the behaviour is being pursued. ‘Research shows that reminding yourself of how your daily behaviours fit into big-picture goals will keep you motivated to stay on track.’
  • Challenges: identify potential barriers and develop contingency plans for overcoming these.
  • Make a routine: scheduling specific times for a new habit reduces the psychological effort required to initiate it as it becomes part of a wider routine.
  • Treat yourself: Break goals down into measurable milestones, and enjoy a reward when each is hit.

For many people, learning a new language will be high on the list of goals for 2019. In TED talk The secrets of learning a new language polyglot Lýdia Machová discusses lessons she derived from a survey of enthusiastic language learners. Many of those interviewed take different approaches, with advice including using online resources to practice speaking and learning the 500 most frequently-used words. However, four basic principles stood out as being important to most:

  • Enjoyment: finding ways to enjoy language learning is fundamentally important.
  • Effective methods: cramming to memorise lists of words for a test achieves short-term results, but long-term recollection requires spaced repetition across a longer period.
  • Create a System: plan learning to integrate it into every day life (for instance listen to podcasts while commuting).
  • Patience: people should not expect to become fluent in a matter of days, but can make significant progress within relatively short periods if they remain determined to do so.

So learning in small chunks, every day and in an enjoyable way should be an effective and sustainable approach for most.

 

5 – Are you a stock or a bond?

An article in The Economist reflected on this notion that personal investments should be used as a hedge against employment income, and not simply made on the basis of tolerance to risk, as theory suggests.

The authors write that ‘this is not to say that preferences about risk do not matter to investment choices. They do. It is that wealth should be looked at in the round. A proper reckoning would include not only financial assets but human capital—a person’s knowledge, skills and talents. This has a big influence on earnings over a working life. Young people, with few savings and decades of employment ahead, have most of their lifetime wealth embedded in their human capital. It has a payoff, just like a stock or a bond. It makes sense to take account of that when deciding what to hold as financial wealth.

For instance, despite an apparent appetite for risk, someone with a job that relies on booming markets would be ill-advised to place their savings into investments that are also likely to suffer if conditions turn.

Nevertheless, few people take such an approach and typically ‘anti-hedge’ by investing large portions of their savings into the shares of their employer, or companies in similar industries or locations. A study conducted by MIT researchers is 2003 found that is is normal for 40% of company pension plans to be invested in the parent company itself. 60% of the retirement savings of ENRON employees was invested in the company when it folded.

The article concludes by noting that ‘people stick to what they know for understandable reasons. Investment can seem like an aggressive sport, the preserve of bulls and bears or Wall Street wolves. Yet it would be more helpful to think of investment as self-insurance. People save and invest to protect themselves from contingencies. The best way to guard against some sorts of risks is often to embrace a different kind. The kind of insurance you will need ultimately depends on who you are.’

 

In The New Strategic Selling, authors Robert Miller and Stephen Heiman outline a much-lauded approach to complex enterprise sales.

They advise that any sales process should start with developing a deep understanding of a prospective customer and the challenges they face. Customers are likely to be in one of a number of states – perhaps encountering challenges or chasing growth – and the approach to selling must be tailored accordingly. For instance, a company facing an existential crisis is unlikely to buy something on the promise of incremental improvement alone. The authors also recommend that regular contact should be maintained with customers, but only when there is a valid reason to do so.

The book argues that complex enterprise sales depend on several decisions, normally made by multiple people with different ‘buying influences’. The process normally involves selling to at least three types of buyer:

  • An ‘economic buyer’ (i.e. the CFO / CEO) that will evaluate the economic impact of a purchase in the context of an organisation as a whole.
  • A ‘user buyer’, referring to the person / team that will directly use or benefit from the purchase.
  • A ‘technical buyer’, such as the legal department, which may not make the final decision but can prevent purchases.

The three buying influences almost never reside within the same person and may hold diverging or conflicting opinions or perceptions, while their relative importance is likely to differ between organisations or products and may not be obvious. For instance, a CEO may defer to the opinion of a more junior influence with a much greater understanding of the product or field in question. The people in each role may be constantly changing. Nevertheless, all three must be sold to.

The authors advise sales teams to develop an understanding of who fills each role within an organisation, target them based on their relative decision making influence (as opposed to title, historical contact or degree of comfort in dealing with them) and use appropriate sales resources for each (for instance making sure that someone with a technical background engages with a ‘user buyer’, and that the seniority of the sales person matches that of the buyer). They also suggest that, in some cases, one buying influence (or other contacts) can be used as a ‘coach’ to influence the others. During this process, independent experts can be an effective way to validate a product.

The authors observe that ‘people buy when, and only when, they perceive a discrepancy between reality and their desired results‘ and any buying decision therefore involves an implicit agreement to change. As should be clear (but often apparently isn’t), only win-win sales are good in the long term.

 

7: A Master Class in the Fine Art of Conversation

In an interview with the New York Times, veteran radio host Terry Gross offers her thoughts on how to have good conversations, providing lessons derived from four decades of interviewing. Key tips include:

  • ‘Tell me about yourself’ is the the best icebreaker for any conversation. It makes no presumptions (unlike questions such as ‘what do you do for work?’) and so removes the risk of making someone feel uncomfortable or self-conscious, while enabling them to guide the conversation in the direction they deem to be most relevant.
  • Great conversationalists show genuine curiosity and, ideally, humour. Failing this, mental organisation, concision and energy help to engage people.
  • For interview situations, prepare by organising thoughts on key subjects, anticipating questions and rehearsing answers. In particular, identify questions that would be best avoided, and prepare ways to pivot to another topic if these are asked. In other situations, if simply admitting reticence to answer is too blunt, hedging statements such as ‘I’m having a difficult time thinking of a specific answer to that’ or ‘I’m afraid by answering that I will hurt somebody’s feelings’ are good options.
  • Pay attention to body language, particularly signs that the other person is losing interest or has stopped paying attention.
  • In some situations, where an answer can be reasonably expected, address avoidance by asking and re-asking the question, and point out if it has not been answered. In less formal situations, people should be given more leeway and the conversation should move on if they indicate that they are uncomfortable.

Writing for the blog of social media marketing platform Buffer, Belle Beth Cooper highlights the important distinction between features and benefits when formulating sales and marketing messaging.

Cooper notes that ‘a feature is what your product does; a benefit is what the customer can do with your product’. While these appear similar, the latter tends to resonate much more strongly with prospective customers. A focus on features can be confusing and highlight aspects of a product that are irrelevant for end users, whereas connecting a product to improved performance or a better life is far more relatable and compelling. The concept is nicely summed-up in the below graphic from UserOnboard.com, as well as the marketing quip that ‘people buy quarter inch drill bits not because they want quarter-inch drill bits, but because they want quarter-inch holes’.

features vs benefits

Examples of messaging that successfully adheres to this principle include Evernote’s tagline ‘Remember Everything’ and LinkedIn’s ‘Be great at what you do’.

 

9 – How To Find Your Calling, According to Psychology

Writing in the British Psychological Society Research Digest, Christian Jarrett presents five key insights that the field of psychology provides in relation to the search for a professional passion:

  • Having a calling or passion for something can motivate and improve the odds of being successful, but research indicates that there are two types. An obsessive passion forms the basis of self esteem and mood, can spiral out of control and may ultimately lead to burnout and anxiety. A harmonious passion, on the other hand, is controlled, reflects the positive qualities of the individual and complements wider endeavours.  Only the latter is associated with better performance and mood.*
  • Research suggests that having an unexplored calling is generally worse (in terms of factors such as health, life satisfaction and career engagement) than having no calling at all.
  • While much is made of the role of ‘grit’ (see Angela Duckworth) or resilience in achieving success, a study published in 2018 suggests that only in combination with a passion for the pursuit is it a predictor of superior performance.
  • For many people, a passion or calling may not be easily identified, and it may be necessary to explore numerous sectors and roles to find one. Interestingly, research suggests that in some cases (where the choice to do so is made freely and progress is achieved), passion can actually result from (i.e. not simply induce) effort.
  • Beliefs about how passionate work is pursued may impact the extent to which it is realised. Studies suggest that a passion that arises because the pursuit is enjoyable is less likely to be sustainable than one that relates to the pursuit of something that is perceived as meaningful.

 

*This reminds me of an apposite observation from Khalil Gibran’s wisdom-filled The Prophet: ‘Reason, ruling alone, is a force confining; and passion, unattended, is a flame that burns to its own destruction.’

 

10 – How to sell climate change and save the planet

Writing in the Financial Times, Simon Kuper looks at how communication around climate change could more effectively catalyse action. The suggested approaches are likely to be applicable to many other issues and contexts.

  • Find the right messengers. Using non-partisan messengers such as weather forecasters or farmers can help to overcome distrust in skeptical groups, although the specific messaging and messenger(s) should be tailored to each.
  • Stop predicting doomsday. Kuper notes that ‘sacrifice doesn’t sell, and when most scenarios are pessimistic, people see little point in acting.‘ Messaging should therefore be optimistic and emphasise some of the potential benefits of change, such as economic growth through the development of new industries, or carbon charge dividends paid to citizens (as is happening in British Columbia).
  • Focus on the near and present. People inherently bias the near term, so impacts currently unfolding should be highlighted, rather than those that may affect future generations. Similarly, few people will be sufficiently persuaded to change behaviour by issues affecting those in other countries.
  • Tell a populist, anti-elitist story. Despite narratives around climate change policies hitting potentially vulnerable groups such as coal miners, profits from the fossil fuel industry flow to a small band of companies, oligarchs and sheiks, while the sector employs relatively few people.
  • Help connect the losers to the new economy.  ‘If people are shown a future without them in it, they will do anything to stop that future happening‘ so ‘taking care of the losers is essential‘. Many of those whose jobs will be lost can be retrained, but subsidies are likely to be required.
  • Ignore climate deniers. Arguing with deniers generates publicity for their message and allows them to shape the narrative. Experience to date has shown that fact-based arguments are counter-productive – as with other issues, action should not be dependent on reaching full consensus, which is unlikely ever to happen.

 

Other interesting things

The little black book of scams
A guide to the most common consumer scams and how to guard against these.

7 Ways to Maximize Misery
An interesting take on the pursuit of happiness, adapted from Randy J Paterson’s ‘How to be Miserable’, that offers some great (counter) advice.

VisaList
A tool that enables visa applicants to easily identify the documents they will require during the process.

 

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