Leadership and Debra Benton

The woman in the picture is executive coach, speaker and author Debra (D.A.) Benton.

You know that leadership is something I think about a lot. One of the most useful reference frames about leadership I’ve ever heard (and I owe this one to a select group of Stanford faculty) is that it’s not practical to think of leadership as the product of intrinsic charisma you’re born with: if you deconstruct leadership, it boils down to a set of behaviors you choose to apply deliberately, consistently and relentlessly.

Debra is not an academic; I think her books are among the clearest and most usable guides to those behaviors. I met Debra a couple of times many years ago and we’ve occasionally stayed in touch over time. She lives and breathes what she preaches. You can even tell from reading her: she’s not just telling you to “use short, sharp sentences”: she does it.

Her latest book, CEO Material, re-uses some of the themes in her previous books – the basics of her teachings haven’t changed, after all – synthesized in a crisp package. It’s all about how you get to be described as “memorable, impressive, credible, genuine, trusted, liked, cool, calm, collected, charismatic, comfortable, competent, and confident.” And that’s the way she is. Sure, it’s hard work, and I’m particularly bad at some of it (smiling to strangers in an elevator, striking up a pleasant conversation with the person sitting next to you on the plane), and I don’t do it all. But what I do, I do because I believe it works.

One more thing I particularly like: Debra’s style teaches you to infuse reciprocity and exchange (the stuff that academics tell you influence is made of) with kindness, courtesy, decency and integrity. There’s no sustainable leadership without integrity. Make all the fun you want about American leadership literature as self-help for aspiring leaders. As long as there is a moral compass guiding those leadership behaviors, I’m fine with it.

Being a student again

I loved being a student, and I love to go back and be a student again every now and then, even if it’s only for a week.

In 2005, I attendend the gut-wrenchingly good Stanford lifelong learning seminar called “Interpersonal Dynamics for High Performance Leaders“. Next week, with equally high expectations, I am off to “Customer-Focused Innovation“.  Read about it here, here and here in Prof. Sutton’s blog.

Plus, it’s always good to be back in California.

Myth of the day debunked: the commitment gender gap

Quick LinkedIn poll on European LinkedIn users:

And, ladies and gentlemen, I truly hope someone brings out these results when at promotion time people argue that a man is likely to be “more committed to the job” (whatever that means) than a woman:

Seven things that don’t work at the Molino Stucky Hilton in Venice

Consumer advocacy is not the first need that comes to mind when spending a weekend in a Venice blessed by perfect spring weather after deciding that once in a while it’s worth splurging on a luxury hotel. However, the Molino Stucky Hilton, a late 1800s industrial flour mill sitting in a quiet location off the beaten track (the Giudecca island, also home to the historic Cipriani hotel) yet minutes by boat from anywhere in Venice, beautifully renovated as a hotel by the Caltagirone group and opened with great fanfare under Hilton management in 2007, manages to disappoint on so many counts that at some point I started keeping a list. Call me a snob, call me someone who can’t appreciate the fine things in life, but here are seven ways a hotel can go wrong – and at the Molino Stucky Hilton, all seven are wrong.

7. Internet access, provided by Swisscom, is fast and reliable but offered at extortionary prices. Business packages are 24 hours for €27 or 7 days for €108; if you choose Economy access (bandwidth and data volume limitations apply), you can choose between 60 non-consecutive minutes within a 24-hour range for €12 or 24 consecutive hours for €22. During a three-night stay, I burned through three of the sixty-minute packages – I hardly ever used the full hour, mind you, which only left me the added frustration of not being able to carry any unused minutes over to the next day.

6. There is no turndown service for the night, unless on request. And even on request, there is hardly any turndown service – it mostly consists of the removal of some pillows to a chair or a closet, depending on the housekeeping whim of the day. Drapes were left open for us to remember closing on our own. For rooms that set you back between €400 and €700 per night (but you can also choose a €3,700 Tower Suite, should you be so inclined), I find it in extraordinary bad taste not to provide turndown service by default.

5. I’m all for the environment, and in principle I do sympathize with the effort to conserve water and not dump synthetic detergents into the Venice Lagoon. Yet, for the aforementioned €400 to €700 per night, I expect to have the option to keep the same sheets night after night, should I so desire, by placing a little green card that says “I’m green, don’t change my sheets” on my bed before leaving the room in the morning. I do not expect the default option to be that I’ll have to sleep in clammy sheets, unless I remember to place on my bed the little green card that says “I’m just not that into green, so do bother to change my sheets, please”. That is precisely the unpalatable choice that the Hilton management inflicts on any morally conflicted guests at one of its most hyped luxury locations, and probably elsewhere too, considering how much cheaper it is.

4. Suites and junior suites come with complimentary access to an Executive Lounge on the sixth floor. On inspection, however, this turns out to be a singularly depressing space, dimly lit with minimal amounts of natural light coming from gunholes on top of the walls, and reminiscent most of all of a narrow airport lounge at some minor hub. An inexplicably undrinkable orange juice is served, and Sunday newspapers only appear on Sunday morning after reminding the lounge staff that Sunday is, indeed, a day of the week when many newspapers are regularly published.

3. A beautiful swimming pool on the seventh floor of the building is surrounded by such precious few deckchairs that, on a sunny afternoon, guests start getting turned away. This may be indeed a structural limitation, yet it is not one that the hotel designers couldn’t foresee. Another rooftop solarium, perhaps? Deckchairs in the garden? It’s only May and you’re running the pool at full capacity – how many guests are you going to disappoint by July?

2. Ah, no pool, but at least one can get up in the morning and go to the state-of-the-art-gym for a good workout, right? (Remember the open drapes issue above – item 6. – and the fact that the sun does rise at a very early hour these days, especially for a weekend morning). Most people who work out are used to getting their workouts sometime between 6 and 8 am, right? Well, no such luck. The gym, which is described in the in-room Guest Services book as opening at 8 am, really doesn’t open until 9 am. Guests who show up in workout gear anytime before 9 are turned away.

1. Finally, the staff is spectacularly untrained and occasionally clueless. (With a notable exception at the spa, the only department where people were competent, experienced and friendly: if you need a beautician, ask for Ella). Almost everybody looked like they’d just shown up for their first day of work. A request for Earl Grey tea at the aforementioned Executive Lounge (item 4.) was met with an uncomprehending stare and two consecutive attempts at tea that were not Earl Grey. A pool attendant (5.), asked whether there might be a house phone nearby, gleefully answered “I have no clue”. Lapses in training, even at a hotel costing you the aforementioned number of Euros per night, can be forgiven; lapses in attitude will poison the guest experience to the point that a guest will only return under extreme duress. (For a well-thought-out philosophy of the hospitality business, I recommend Setting the Table by New York restaurateur Danny Meyer).

Back in the mid-‘90s, I had what I recall as one of the best hotel experiences in my life at the Post Ranch Inn in Big Sur, California. A stroke of management genius had led them to conclude that, when a guest spends that kind of money to stay at your property, you might as well throw in a few minibar drinks and Terra chips for free: it’s a little thing, and of course it’s not free because you pay for it in the price of the room, but it completely changes the tone of your relationship with the hotel bill. Unfortunately for us customers, the Post Ranch Inn method did not catch on, and almost everywhere we go we are still being charged megabucks for a bottle of water. (On the minibar issue, there must be a conspiracy among hotels that’s worth an antitrust investigation). My pleasure with the Post Ranch Inn experience was only marred, on my subsequent visit, by the loss of a digital camera with all my Hawaii pictures on it, accidentally left in the Post Ranch Inn restaurant and never found again. Still, years after my first visit, I rave about the Post Ranch Inn. Yes, that kind of boutique hotel is a different business from the large hotel chain business. But still, one would wish to enjoy some glimpses of good service, and good management, even when staying at a bigger place. The Park Hyatt in Tokyo, in my experience, had just that kind of magic sauce. The Molino Stucky Hilton doesn’t.

Supercrunchers and The Black Swan: Two very different books

How can two so-called “Business books of the year” be so at odds? Supercrunchers, by Ian Ayres, is subtitled “How Anything Can Be Predicted”; The Black Swan, by Nassim Nicholas Taleb, is based on the central idea of our “blindness with respect to randomness, particularly the large deviations”, and the dramatic impact of randomness on our lives and on history itself.

I found Supercrunchers only marginally interesting. That’s perhaps because a significant part of my job and my team’s job is supercrunching: running a large number of controlled experiments with a small or large number of variables, and optimizing for the most desirable outcome. The language of multivariate testing is common enough throughout my organization that it has become second nature to many of us. Where I work, it is not acceptable not to run experiments, or to run them with the wrong control groups. It’s hard for me to disagree with the idea that if you can manage a business through data crunching, it would be a folly not to.

Where Supercrunchers becomes more wide-ranging, in my opinion, is only when it moves from business to public policy: education, justice and medicine are all domains where we ought to seek the truth, and we don’t look at the data often enough. (A notable success of this method: Ernesto Zedilllo’s Progresa program for rural and urban poverty reduction, later renamed Oportunitades. It is a conditional transfer of cash to poor people – get prenatal care, go for nutrition monitoring, keep your kids in school – and it works best if the money is given to mothers, who seem to be more likely than fathers to use it for their children).

The Black Swan is by far the more fascinating book. A black swan, in Taleb’s essay, is an improbable event with the following characteristics: it is an outlier; it carries an extreme impact; and we tend to explain its occurrence after the fact, saying that it was predictable after all. We are blind towards randomness, particularly with respect to large deviations, and we consistently underestimate the probability of black swans, while black swans are all that really matters, in our lives as in social science and history.

Taleb’s book is a very personal rant about an idea that he very deeply cares about, written in a very idiosyncratic style. To understand his argument, consider that any physical or social phenomenon belongs to one of two domains: Taleb calls them Mediocristan and Extremistan. Matters that belong to Mediocristan exhibit mild randomness and are well described by a Gaussian curve: height, weight, car accidents, mortality rates, IQ, incomes of bakers, restaurant owners and orthodontists. Matters that belong to Extremistan exhibit wild randomness and are either described by a very different distribution or totally intractable: wealth, book sales per author, populations of cities, number of speakers per language, earthquake damage, sizes of companies, commodity prices, financial markets. In other words, take a group of 100 random people, then add basketball player Yao Ming to the group: their average height goes up a little bit. But only a little bit, because Yao Ming, as tall as he is, isn’t even twice as tall as the tallest of the 100 random people. Then take another group of 100 random people, add Bill Gates to the mix, and see what happens to their average wealth. That’s because wealth is not normally distributed at all, and Gates is a heck of a lot more times richer than the next richest guy in his group of 100 people than Yao Ming is taller than the next tallest guy in his group. Technology and progress seem to have made the Extremistan-type phenomena more ubiquitous and more relevant than Mediocristan-type phenomena: for example, before the birth of recorded music, income for musicians was a lot more normally distributed than it is today, in what Sherwin Rosen has called “the economics of superstars”.

What are the implications of black swans? Taleb offers few concrete answers, not because he’s a lazy writer, but because to him this is an intrinsic result of his skeptical method. In terms of investment strategy, if you accept that most measures of risk are flawed, then there are really no predictably “medium-risk” assets. You are better off with a “barbell” strategy, putting 85 to 90 percent of your assets into very safe instruments, such as Treasury bills, and the other 10 to 15 percent into venture capital-style portfolios, which are meant to expose you to the good black swan. Other than that, you should try to expose yourself to as many opportunities as you can, which implies living in a big city and going to lots of parties (or, if you are autistic, sending your associates).

The Black Swan is a very seductive book by an intriguing author: one who has decided to “never attend business “meetings”, avoid the company of “achievers” and people in suits who don’t read books, and take a sabbatical year for every three on average.” It does not wear its philosophical ambitions lightly, and it makes Supercrunchers look trivial by comparison. Ayres’s daughter, Anna, may have learned a great deal from her dad in her ability to use the standard deviation concept at the age of eight, but he’s probably doing her a disservice when he implies (in Chapter Eight) that the standard deviation of NYSE returns is 20 percent in a Gaussian distribution – a statement that Taleb, having crunched billions of market data points in his work as a trader, would find entirely nonsensical (random walk, anyone?) The opening case history of Supercrunchers is particularly disappointing: so, some Princeton economist can predict Bordeaux prices from the season’s temperatures and rainfall patterns? Big deal! Anybody can do that – after the weather has occurred. It would start to be interesting if somebody could predict the weather for the 2008 Bordeaux today, in December 2007 – which, as we know, is devilishly difficult. And anyway, if you’re a chateau owner growing your Bordeaux, that’s not what you should worry about. Temperature and rainfall in Bordeaux belong to Mediocristan, so you’re not going to get big surprises one way or the other. What you ought to do is go out and buy insurance against the probability that a volcanic eruption blackens European skies with ash for the entire summer; that a previously undiscovered plant disease wipes out your grapes; that an accident at a nuclear power plant makes your land radioactive for the next three generations. (The mere fact that I am coming up with examples from real events – Indonesian forest fires, phyllossera, Chernobyl – shows you how unimaginative I am in stretching myself to think of real black swan-type risks).

In summary, if you only have time for one book this Christmas holiday, go for The Black Swan. Supercrunchers will get you to optimize your spreadsheets, but The Black Swan will get you to use your brain: and that’s what books are for.

Hard Facts, Dangerous Half-Truths and Total Nonsense: You’ve got to love Pfeffer and Sutton

Being a Stanford graduate, I was already partial to the authors, two Stanford professors, before even starting to read Hard Facts, Dangerous Half-Truths and Total Nonsense: Profiting from Evidence-Based Management. With a title like that? and that cover design? (oh my god, those people at HBS Press have got themselves a mean publishing machine).

Wait. It only gets better. If nothing else, read this book for a benchmark of academic freedom. Few among the Stanford Business School faculty enjoy more of an icon-like status than lecturer – and entrepreneurial legend – Andy Grove. So, in opening the book with an argument about the lack of evidence that stock options enhance organizational performance, they deliver a quick jab to Grove:

“When Andy Grove, former Intel chairman and CEO, got prostate cancer, he assiduously tracked down all the data he could comparing treatment options and their risks and benefits, gathering the best available evidence to guide his medical decisions. That’s what we would expect from a well-trained engineer and scientist. Grove, however, like many of his Silicon Valley friends, continues to insist on the benefits of [stock] options and doesn’t cite evidence for his views – even though with other business decisions, Grove sticks closely to the facts.”

Similar barbs are reserved, later in the book, for Robert Burgelman, whose claim that “strategy is destiny” they quickly proceed to undermine – with a close reading of the Intel story, which Burgelman and Grove have co-taught to generations of students: the key strategic decision in Intel’s story was, apparently, an outsourcing decision made by IBM, which Intel was smart to capitalize on, but which Intel did not influence or even foresee as the lucky break that would build the semiconductor giant. If you ask me, that’s pretty much like pulling the rug from under Burgelman’s feet. Yet, their whole critique seems to be in good faith, extremely civilized, and driven by the authors’ genuine truth-seeking efforts rather than by personal animosity. And I just think that’s very cool.

If you like challenging conventional wisdom, this is a book full of delights and an arsenal of tools for attacking nonsense in your corporate environment whenever you see it:

“Take the case of a senior exceutive from Florida Power and Light, who told us, while attending a Stanfrod executive program, that his compensation was based on the profitability of the utility. The utility’s profitability, since in the short run most of its costs and rates were fixed, depended mostly on the amount of electricity sold, and the amount of electricity sold depended mostly on the temperature. The hotter the summer in Florida, the more power was sold, and the more profitable was the utility. That summer was a particularly hot one in Florida, so the executive got a big boost in pay during the month that he spent at the Stanford Executive Program in california. This executive noted that this incentive system made no sense — unless you believed he could control the weather in Florida”.

The authors handle some big hairy questions (Is work fundamentally different from the rest of life, and should it be? Do the best organizations have the best people? Are great leaders in control of their companies?) In most cases, they don’t have the answers, but they show you under what conditions an answer might be fit for a given situation, and how devilishly difficult it is to get to the answer if you don’t specify those conditions. So, suppose your company spends a lot of time and effort developing and administering a performance management system that ranks people’s performance on a curve or forced ranking, encouraging you as a manager to “use the full curve” in grading your employees, and rewards better performers with monetary bonuses (ever been in one of those companies? ). After reviewing decades of experimental research and field studies, Pfeffer and Sutton conclude: “Individual incentives and highly differentiated reward and recognition distributions make more sense when performance can be objectively assessed and when performance is mostly the result of individual effort rather than the product of interdependent activity”. Examples of such jobs are jockeying, cutting trees, and installing windshields. “Similarly, the evidence suggests that more dispersed financial rewards increase the performance (particularly of the highest performers) when tasks entail little or no interdependence and outcomes are clear.” Examples: driving trucks and picking oranges. When was the last time you had a job like that? You probably experienced a fair bit of interdependence even while editing your high school yearbook, didn’t you? “Yet when work settings require even modest interdependence and cooperation, as most do, dispersed rewards have consistently negative consequences on organizations… The negative effect of pay disparity was especially pronounced for high-technology firms, because those firms had the greatest need for collaboration and teamwork.”

Pfeffer and Sutton claim as their practical inspiration Dr. David Sackett’s evidence-based medicine movement: hell, if it works for medicine, let’s try to see if it works for business, too. In the bigger scheme of things (on strategy, organizational change, and leadership), their conclusions remind me of Eric Beinhocker’s The Origin of Wealth, a more theoretical work about contemporary economics which nevertheless seems to me to hint at some of the same truths. And at the end of the day, it’s not about truths, which change anyway: it’s about the method of looking at the facts, applying your brains, and leaving behind those beliefs that happen to be unsupported by evidence. If we all could inject some more of this wisdom into our organizations, we’d probably have earned our salary, and our bonus too.