Build summer 2013 (1) by fellipe moraes

SUMMER 2013

The Catalog of Ideas. TheBuildNetwork.com

IINFORM INF NFO NF OR ORM RMAT ATION ATI N ANX ANX XIET IE ET Y A ET ALL LL L GRO GRO OWN WN UP UP UP: P:: IT’ IT T S NOT OT JUS JU UST ‘A ‘AL ‘A AL LW WAY WA A AY YS ON N,,,’’ N,’ BUT B UTT ‘A ‘ALWAYS LWA LW LWA WAY YS S IN IN’ N’’ N

“A “A Always y On” iss Killing g Your Company

THE COMPETITIVE ADVANTAGE G OF O LEARNING G TO TURNING IT ALL OFF (SEE IDEA C 02) C.02)

“The price of anything is the amount of life you exchange for it.” HENRY DAVID THOREAU

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“Everyone I know who ıs happy is working well at somethıng they consider important.” ABRAHAM MASLOW

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The Catalog of Ideas {For Management Teams in the Build Economy}

OVERVIEW

YOUR TEAM

A guide and introduction to this issue of the catalog, including an index of topics, a checklist of all the issue’s ideas, and some notes from the editors.

Ideas to help teams cultivate alignment, hold great meetings, improve collaboration, train new talent, and drive projects so that they achieve the needed results.

O.01

CONTENTS

O.02

INDEX OF TOPICS

O.03

EDITORS’ NOTES

A.01

CUSTOMER SERVICE

A.02

IDEA GENERATION Companies generate ideas all day long but lose most of them. The solution? “Always be capturing.”

A.03

MANAGING PEOPLE

A.04

COLLABORATION Some collaborative styles combine better than others. Find your style—and the ideal combinations for you and your colleagues—by taking this quiz.

A.05

TALENT DEVELOPMENT

A.06

MEETINGS

Customer service equals customer retention, marketing, sales, and competitive strategy. Remember to nurture your “superfans.”

A.07

BUILD MEMBER PROFILE

GETTING G ET TIN TING A BE B BETTER ET TER ROI ROI FR RO F FROM ROM YO Y YOUR OUR UR TIM T TIME IME

A.08

COLLABORATION What do innovation “idea mar markets” rkets” look like? Here’s one that’s an internal version of Kickstarter.

A.09

TRAINING All new hires face a learning curve. Here’s a checklist of seven tasks that can speed them up.

“Always on” is killing your business. (Step away from the smartphone now.) The sharing economy vs. the invisible hand. Can everybody win? (Well, you can, anyway.)

WHAT’S YOUR PROBLEM? This table of contents is your checklist. Find single ideas or follow the threads for themes. NURTURING N URT RTURIN RING NG C CUSTOMERS UST STO TOMERS

Time management slipping? Unsure how to allocate your attention? Organizational demands not making sense? Here's some advice. FINDING F NDING PATHS PAT PA ATHS TO TO GROWTH GROW T H

Improve how you capitalize on ideas, examine disruptions, clarify your business model, and increase your prices (persuasively).

Customers aren't complaining? Here’s why you should ask them what needs ﬁxing anyway.

Don’t ask: Why are you leaving? Ask: What made you start looking for another job in the ﬁrst place?

The right mentoring program can create the experts your company needs.

Make your meetings more effective e by structuring them around questions. Joy Gendusa, founder and CEO; Jennifer Custer, president; and Sarah Kicinski, CMO; PostcardMania, Clearwater, Florida

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ON THE COVER Sure, we're all overwhelmed by data and by the machines that bring it to us (constantly). But we're also overwhelmed by the expectation that we're available (constantly) to respond. New research reveals that those expectations need to be reset. Photograph by Eric Kulin.

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CONTENTS

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YOUR TEAM

THE CEO

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Ideas to help leaders get more out of their time, develop their leadership skills, make better decisions, communicate more vividly, and build themselves to last.

A.10

Midmarket companies considering acquisitions are ﬁnding more companies open to offers, if the terms are right.

A.11

MOTIVATION

A.12

GROWTH STRATEGIES

MANAGING YOURSELF

Your to-do list is too long. Here’s why (and how) to shorten it.

B.02

Happy people outperform unhappy or neutral ones. Thankfully, it’s easier than you think to instill happiness in your employees.

COACHING 3 tips to help a long-winded employee learn to keep things brief.

B.03

TALENT MANAGEMENT Some companies will do anything to help employees thrive—even if it means helping them land a better job elsewhere.

DECISION MAKING “Wrong decisions made early can be salvaged, but ‘right’ decisions made late cannot.”

B.04

LEADERSHIP To win the war for talent, rethink key aspects of the recruitment and hiring process.

B.05

LEADERSHIP Employees want to be connected, not inspired. Smart leaders foster collaboration.

B.06

LEADERSHIP Netﬂix as example: Spell out what you are, what you do, and who you really compete with.

B.07

BUILD MEMBER PROFILE

B.08

MANAGING PEOPLE

B.09

CUSTOMER RELATIONSHIP MANAGEMENT “Superfans” are brand ambassadors and lifetime-value paragons. Treat them like it.

B.10

MANAGING PEOPLE

B.11

MANAGING YOURSELF

A.13

EMPLOYEE ENGAGEMENT

A.14

PROJECT MANAGEMENT

A.15

B.01

Would your people answer “yes” to the question, Do you have the opportunity to do what you do best every day? “Bastards, gentlemen, and ladies can be project managers. Lost souls, procrastinators, and wishy-washers cannot.”

MEETINGS

Forget brainstorming. Try “brainwriting”

instead. A.16

WORK/LIFE BALANCE An “always-on” culture hurts company performance. Solution: Offer “predictable time off.”

A.17

PROJECT MANAGEMENT An alarming number of IT projects ﬂat-out fail. The right C-level support would change that.

Therese Tucker, founder, CEO, and chairman, BlackLine Systems, Los Angeles No leader should underestimate the “gratitude effect.”

You can handle the truth. Here are 5 tips for making sure you get it.

Unproductive days happen. But you can take steps to change them. (Sometimes.)

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WHAT’S NEXT

Ideas to help organizations reexamine their business models, spot overlooked innovation opportunities, set expectations, and rethink which customers to focus on.

Good but not quite great? These 3 simple rules can propel your company into the ranks of the truly exceptional.

C.01

INNOVATION

MANAGING YOURSELF

The Eisenhower Matrix helped a president decide what to work on and when. It can help you, too.

C.02

BUSINESS MODELS

B.14

SOCIAL MEDIA Sure, your clients follow you on Facebook and Twitter—but they don’t want customer service there.

C.03

CYBERTHREATS

B.15

PRESENTATIONS

C.04

STRATEGY Reﬁne your value proposition by understanding 3 key things about your customers.

B.16

USER EXPERIENCE

C.05

BUILD MEMBER PROFILE

C.06

DATA-DRIVEN MANAGEMENT

C.07

INNOVATION

C.08

MARKETING There are ﬁrst-time buyers. There are loyal customers. And then there are “superfans.”

C.09

INNOVATION Want impact from your innovation efforts? Stop generating ideas, and start developing the ones you already have.

B.12

LEADERSHIP

B.13

“Designing a presentation without an audience is like writing a love letter and addressing it, ‘To whom it may concern.’”

A root cause of bad webpages? Bad user-experience design. Improve it by answering these questions.

Overnight successes are misleading. New products take far longer to take off than most managers think. To avoid being disrupted, focus on the supply side of the supply-and-demand equation.

Firewalls and software patches won’t stop today’s hackers. To protect your company’s assets, make computer security a priority for the entire organization.

Josh Pickus, president and CEO, Support.com, Redwood City, California

“I don’t want real-time data, I want right-time data. Let’s understand the speed of decision making in our company.” 25 percent of innovation projects fail because people are trying to solve the wrong problems. These rules can change that.

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WorldMags.net OVERVIEW

WHAT’S NEXT

Our guide to the executives, thought leaders, researchers, partners, artists, and authors whose ideas ﬁll the pages of this catalog—plus scuttlebutt from around our virtual watercooler.

COMMUNICATION

Put pen to paper and you instantly begin to understand why paper remains so prominent in the “paperless” office.

PRICING Customers expect price increases. You still need to introduce them the right way.

C.12

LEADERSHIP

C.13

MARKETING Word of mouth can really ignite sales. So one midmarket company decided to light a ﬁre under potential talkers.

C.14

C.15

D.02

Build comes alive at the “Solve Sessions”

D.03

Q: What was your biggest takeaway?

D.04

The “Solve Sessions,” 140 characters at a time

D.07

“Who in here can't get better at communication?”

“If I were recruiting a leader, I’d look for people . . . who like to play.”

SUSTAINABILITY

What are workers willing to sacriﬁce for a sustainability initiative? Depends on the ROI.

HOW TO USE THIS CATALOG The headline is an answer to the question, What’s the idea here?

YOUR TEAM

The letter denotes the section. The letter plus the number is the idea identiﬁer.

Companies generate ideas all day long, but lose most of them. The solution? “Always be capturing.”

INNOVATION

To keep ideas ﬂowing, jot them down fast—and on paper. This describes the management topic.

The Plus expands on the main idea by providing a trail to related ideas.

{IDEA GENERATION}

Meetings happen, ideas get generated, and then . . . well, too often those ideas get lost before anything useful comes of them. What’s needed is not only a way to capture ideas but a way to increase the likelihood that they’ll be turned into actions. At HubSpot, this challenge has bred a solution called “always be capturing.” JOSHUA PORTER, the company’s director of user experience, recommends the following tools for the process: whiteboards (use movable ones if possible), Post-its (cluster and reorganize them on the fly), and smartphones and Dropbox (take pictures of the whiteboard and upload them to the cloud for review). Porter offers the following principles, with illustrative references drawn from his recent participation in a “product design sprint” with the Google Ventures Design Studio.

1. Don’t repeat yourself. “When you capture every important idea or concept, you’ll find it easier to avoid repetitive discussions,” Porter notes. “During the sprint, if we started down a path that seemed familiar, we would look at everything we’d captured to see if we were repeating ourselves. If so, we could say, ‘You know what, we already captured that,’ and move on.”

2. If you can’t capture it, stop talking. “If you find yourself unable to capture your conversation, it may not be that valuable. Seriously. During the sprint, JAKE KNAPP (who was facilitating) would often say: ‘OK, you have been talking for a few minutes now without capturing anything.’ . . . Either the people talking would start capturing or they’d stop talking.”

3. Write down or sketch everything important. “For example: If you’re comparing two things, just make a two-column table and write out the differences. If you’re talking about a bunch of features, write them down on Post-its and sort them on the wall. If you’re brainstorming a concept, sketch it out. This shows you whether everyone is thinking of the same thing.”

Porter has written about design on his personal blog, Bokardo.com, since 2000. One of our favorite posts is “How Jerry Seinfeld Crafting Jokes Is Like Interaction Design.” It may seem like a stretch, but Porter ﬁnds ﬁve viable parallels between humor writing and design. (To learn more, search #bettermeetings.) SEE ALSO A.06

A.15

C.15

Other ideas in the catalog related to the one on this page.

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ILLUSTRATIONS BY TODD DETWILER

C.11

CONTENTS

THE NETWORK

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C.10

To ﬁnd Web links and related content, enter the search term highlighted here (be sure to enter it as a #hashtag) into any of the following: the search box on TheBuildNetwork. com, any search engine, LinkedIn, Twitter, or Google+.

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GE Capital

LIKE A BANK: WE CAN LOAN YOU MONEY. UNLIKE A BANK: WE CAN ALSO LOAN YOU STEVE.

At GE Capital, we’re not just bankers, we’re builders. So, in addition to smart financing, we also bring knowledge from across GE. For instance, when Reynolds completed a new acquisition, Steve and his team shared GE’s integration model and procedures. Chances are we have someone like Steve with the know-how to help your business grow. Stop just banking. And start building. GE works.

GECapital.com Steve Zuckerman GE Customer Growth Leader

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CONTENTS

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The Index

BUSINESSES and ORGANIZATIONS, TV SHOWS, BANDS, and VIDEO GAMES

Airbnb C.02 Amazon B.06 C.05 Apple B.06 B.09 B.16 AT&T A.01 B.07 B.15 Beatles, The B.09 Boeing A.01 B.07 Boston Consulting Group A.16

British Sky Broadcasting Group B.06 CareerBuilder B.16 CBS A.04 Comcast B.06 C.05 Computer Associates C.05 Costco B.07 Data General C.12 Dell C.05 Dish Network B.06 Dunder Mifflin B.05 Facebook A.13 B.14 FedEx C.05 Fiat C.08 Four Seasons C.05 Google A.02 A.07 B.06 B.09 C.06

Grateful Dead B.09 Harvard University

A.04

B.16

HBO B.06 C.11 Hewlett-Packard C.07 House A.11 HubSpot A.02 B.16 Intel C.07 Intuit B.02 Kickstarter A.08 KPMG A.11 Kraft Foods C.11

Martin’s Pretzels A.09 Microsoft B.06 MLB.com A.04 NASA A.05 A.14 B.03 Nestlé C.07 Netﬂix B.06 C.11 Nike B.09 Northrop Grumman A.01 oDesk C.02 OfficeMax C.05 101st Airborne Division B.13

Patagonia B.05 Pearl Jam B.09 Procter & Gamble C.07 Radiohead B.09 Reddit C.02 Rolling Stones, The B.09 Rolls-Royce C.07 Seinfeld A.02 C.15 7-Eleven B.06 Sony B.06 Southwest Airlines A.01

BIG NAMES

Buckingham, Marcus

TOPICS

A.04

A.13

Christensen, Clayton C.12 Covey, Stephen B.13 Dell, Michael C.05 Edison, Thomas C.09 Einstein, Albert C.07 Eisenhower, Dwight B.13 Hastings, Reed B.09 Jobs, Steve B.16 Katzenbach, Jon, A.04 Kerouac, Jack A.09 Kidder, Tracy C.12 Mandela, Nelson C.05 Markkula, Mike B.16 Sandberg, Sheryl A.13 Seinfeld, Jerry A.02 C.15 SquarePants, SpongeBob C.08

Tyson, Mike C.09 Vedder, Eddie B.09 West, Tom C.12

B.06 B.07

Spam C.08 Starbucks B.06 Tetris A.11 Twitter B.14 United Airlines B.06 U2 B.09 Verizon A.06 Warby Parker A.09 C.13 Wegmans B.14 Whirlpool A.01 Yahoo B.16 Zappos B.09

Business Models

Collaboration A.04 Customer Service & CRM A.01 B.09

Data-Driven Mgmt. C.06 Decision Making B.03 Disruption A.07 C.02 C.04 Exit Interviews A.03 Idea Generation A.02 A.08 C.15

Info. Technology Innovation C.02

A.17 C.07 C.09

C.15

Leadership B.05 B.06 C.12 Managing People A.03 A.09 A.13 A.16 B.02 B.08

Managing Your Team

A.16

B.02 B.08

Managing Yourself

B.01

B.10 B.11

Marketing C.08 C.13 Meetings A.02 A.06 A.15 Mentoring A.05 Motivation A.11 Presentations B.15 Pricing C.11 Project Mgmt. A.14 A.17 Sales Cycle B.07 Social Media B.14 Strategy C.04 Sustainability C.14 Talent Mgmt. A.12 B.02 Time Mgmt. B.13 User Experience B.16 Value Proposition C.04 Work-Life Balance A.16 B.07

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C.02

C.04 C.05

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“Always on” is killing your business. (Step away from the smartphone now.)

PHOTOGRAPH BY ERIC KULIN

At first glance, the item in this catalog that prompted the issue’s cover—idea A.16 , to be exact—might seem simple. Not just short (hey, all Build ideas are short). Simple. Idea A.16 reports on Harvard academic LESLIE A. PERLOW's four-year study of the work methods and performance of teams at the Boston Consulting Group, one of the world’s premier strategy consulting firms. The recommendation: Make sure your employees take one pre-planned night off each week. “As in, totally off,” we write, “no e-mails, no voice mail, no nothing that had anything to do with work.”

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EDITORS’ NOTES

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At least for one night. Simple. Except that, as Perlow and BCG understood at the time, it is anything but simple. The idea may be reducible to a recommendation that employees should get what Perlow labels “predictable time off” (or PTO). But implementing a PTO plan turns out to bring a train of interesting consequences. Team members have to cover for one another on PTO nights (because client needs can arise at any time), so they must communicate more, understand everyone’s roles better, and collaborate on how to work smarter to reach project objectives while enabling some time off the grid. In Perlow’s study, participants in BCG’s PTO program reported that the planned personal time was hugely beneficial and the program reduced burnout. But they also reported that their work improved. Their teams became more efficient, they felt more emotionally supported by and connected to their colleagues, and they were more excited to start work each morning. In BCG’s analysis of the program, it found that participants were more likely to plan to keep their jobs for the longer term. And today, says the company, “94 percent of our people feel that PTO creates a competitive advantage for BCG in recruiting and retaining the best people.” So, for BCG—the kind of business in which human capital is almost the only capital there is—Perlow’s work provided answers to two vexing questions: How do you attract and keep the best talent you can? And how do you enable that talent to do its best work? For Perlow, something even larger transpired. The discoveries at BCG became a book, Sleeping With Your Smartphone: How to Break the 24/7 Habit and Change the Way You Work. And the book touched a nerve in the zeitgeist. Which nerve was touched, exactly, isn’t so easy to isolate. But we at Build seem to stumble upon bits of the “break the 24/7 habit” discussion everywhere—in both our conversations with company leaders and our scouring of the management ideasphere. The discussion has at least three themes: Technology overload: Who doesn’t feel overwhelmed and somehow compromised by our gadgets and all they deliver to—and demand of—us? This theme isn’t just workrelated, of course. It’s about the personal costs of all our social media attentiveness and our susceptibility to always available entertainment. Changing competition: This is about the human capital problem in all its evolving forms—turnover, leadership burnout, employee engagement, productivity, and the competition for talent. (Consider the BCG example.) It’s about how “always on” can deplete a business’s most valuable resource.

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WorldMags.net Forget the gap between what we understand and what we think we should understand. What's widening now is the gap between what we're merely aware of and what we think we should be aware of. —Michael Hopkins, Build Editor-in-Chief

And then there’s a theme that’s harder to label. Call it the hunger for personal and organizational sustainability.

PHOTOGRAPH BY JÖRG MEYER

That last one has been around a while, and it has always been animated by the changing technology and competitive environments. But its nature has changed, and it’s come to feel more urgent. We’re overloaded, with too much information and too many demands. We feel it as individuals. Our organizations feel it, too. And we’re hungry for a way through—a sustainable path. In many ways, we’ve been overloaded for a long time. Back in 1989, in his seminal book Information Anxiety, RICHARD SAUL WURMAN wrote that “a weekday edition of the New York Times contains more information than the average person was likely to come across in a lifetime in 17th-century England.” Wurman is the creator of TED, inventor of the Access guides, our original “information architect,” and a lover of the new in all of its guises. But he saw the damage that the new could do and used a formula to explain our trouble: “Information anxiety is produced by the ever-widening gap between what we understand and what we think we should understand. It is the black hole between data and knowledge.” Wurman was sounding this alarm before there was even such a thing as Netscape—much less Google, Twitter, or the phone app that lets us participate in intercontinental video conferences while riding the subway back from the club. Wurman’s “ever-widening gap” has become more primal: Forget what we understand, what’s widening now is the gap between what we’re merely aware of and what we think we should be aware of. We can’t keep up with what’s coming at us, and our organizations are a major culprit. (See idea C.06 , about the destructiveness of real-time data in a world that requires not real-time but right-time decision making.) But all of that is just what we might call the inbound data problem. “Always on” is, in fact, at least twice as personally pernicious. Because the other half of what each of us experiences each day is the “outbound data problem”—the increasingly overwhelming expectation of how and when we will respond to the inbound stimuli and requests. In your company, how much responsiveness is taken for granted? When e-mails arrive after dinner, how fast are you obligated to reply? If an impromptu meeting is needed, when are you routinely expected to be available? This is the tide that BCG is attempting to stem and that Perlow’s seemingly little idea erects a very large dike against. You have to stop, she is saying. Sometimes, you have to turn off. Because her research proved that by being “always on” you’re not just hurting yourself, you’re hurting your business, too.

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EDITORS’ NOTES

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Sharing economy vs. invisible hand. Bets? It’s communism. It’s an unsustainable fad. It’s a seismic social and economic shift that will forever change the way people consume. Most reactions to “the sharing economy” fall into one of these categories. But those who dismiss collaborative consumption as a business narrative they’ve heard before—that is, naysayers in the first two camps—are simply not paying attention. It’s true that the peer-to-peer networks of today—Airbnb, Kickstarter, TaskRabbit—have technological roots spanning the open-source movement of the early 1990s and the earliest P2P auction websites (yep, eBay). Still: The sharing economy of 2013 is not the Red Hat play of 1998. This is not about achieving economies of scale on intellectual capital or challenging the definition of ownership in a digital economy. It’s not even about eliminating the middleman and connecting people one-on-one to eke value from outgrown clothes and vanquished video games. “What’s actually happening is that these sharing-economy companies are going places where Adam Smith’s ‘invisible hand’ cannot,” blogs DOMINIC BASULTO for the Washington Post. “They are recalibrating supply and demand, giving consumers access to otherwise unused capacity or idle assets.” They're companies led by capitalists, sharing-economy or not. “Forty years ago, even 20 years ago, a young person’s first thought, or even second or third thought, was certainly not to start a business. That was selling out—an idea that has rather tellingly disappeared from our vocabulary,” writes WILLIAM DERESIEWICZ in the New York Times. “Today’s ideal social form is not the commune or the movement or even the individual creator as such; it’s the small business. Every artistic or moral aspiration—music, food, good works, what have you—is expressed in those terms. Call it Generation Sell.” Despite what you may have read in Time, the Millennials are not “lazy, entitled narcissists” seeking instant celebrity. They are born entrepreneurs who’ve grown up watching Google and Apple innovate at terrifying speed and thinking that business-model disruption is, quite simply, business. The founders of Facebook, Airbnb, Tumblr, and FlightCar are mostly Millennials, and they are successfully creating markets where none existed 10 or even five years ago. Is it a coincidence that the oldest Millennials were born right about when Apple launched the Macintosh with its now-iconic “1984” TV ad and Inc. unveiled the Inc. 500—the first-ever index of the entrepreneurial economy? Seems like there’s an equation here somewhere: sharing + business + fearlessness = what? Something sizable, we think. The sharing economy has arrived. We built this engine. Now let’s see what she can do.

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Shed light on the cloud It seems everyone is making the leap to cloud-based systems to improve efﬁciency and reduce costs. But it can be helpful for companies to look before they leap. Deloitte Growth Enterprise Services provides middle market clients with the insight to determine needs, implement solutions, and truly beneﬁt from their experience in the cloud. To learn more about Deloitte Growth Enterprise Services and its customized offerings for mid-market and privately held companies, contact Tom McGee at +1 973 602 6410 or email us at dges@deloitte.com Gain insight with Perspectives, our series of reports, webcasts, and events for mid-market and privately held companies at www.deloitte.com/us/dges

As used in this document, “Deloitte” means Deloitte & Touche LLP, Deloitte Consulting LLP, Deloitte Financial Advisory Services LLP, and Deloitte Tax LLP, which are separate subsidiaries of Deloitte LLP. Please see www.deloitte.com/us/about for a detailed description of the legal structure of Deloitte LLP and its subsidiaries. Certain services may not be available to attest clients under the rules and regulations of public accounting. Copyright © 2013 Deloitte Development LLC. All rights reserved. 36 USC 220506 Member of Deloitte Touche Tohmatsu Limited

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YOUR TEAM

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Who’s on your team? (We’re talking about your whole team, de facto members included. Core managers, ad hoc sages, everyone you can’t do without.)

How do you design it, manage it, learn from it, win with it? What does a high-performance management team look like? Does yours look that way? How do you build a team (or several teams) capable of making great things happen?

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HOW THIS SECTION BREAKS DOWN:

17% Meetings A.02 / A.06 / A.15

38%

11%

Talent Management A.03 / A.05 / A.11 / A.12 / A.13

Hiring A.07 / A.09

17% Collaboration A.04 / A.08 / A.14

6% 11%

Cover Story A.16

Strategy A.01 / A.10

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YOUR TEAM

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Customers not complaining? Here’s why to ask them what needs ﬁxing anyway.

{CUSTOMER SERVICE}

78%

Tech

37% Software

BlackLine

46%

Net Promoter Scores

“NPS” Currently, BlackLine’s support team has an NPS of 78 percent, and the account management team is at 85 percent. (Software companies average 46 percent; technology companies in general, 37 percent.)

You probably wouldn’t bug your landlord about a loose doorknob, as long as you could still get the door to open. But wouldn’t it be great if the landlord occasionally asked you whether any minor issues needed fixing—and then fixed them? BlackLine Systems—a $40 million, 160-employee accounting software company—has become something like a proactive landlord. And it’s earned flattering customer testimonials and new business as a result. Before you accuse us of boosterism, be assured: We have statistical evidence to support our claim, in the form of BlackLine’s Net Promoter Score. NPS is “perhaps the best-known customer-loyalty tool around today, based on the entirely sound principle that the more customer promoters you have (i.e., customers who say on surveys that they’re highly likely to refer you to a colleague or friend), the more likely you’ll be to grow your business and outpace the competition,” writes customer-engagement expert BILL LEE for the HBR Blog Network. Measuring a company’s NPS is common, but few companies go beyond that, Lee notes. “That’s because the focus of NPS is on creating promoters, but stops short of engaging them to actually promote the business through activities like referrals, references, blogging or tweeting, speaking at industry events, or any of the myriad ways that passionate customers can help build businesses these days.” BlackLine Systems—whose clients include AT&T, Boeing, Southwest Airlines, Northrop Grumman, and Whirlpool—is an exception to Lee’s general rule. How? Founder and CEO THERESE TUCKER noticed that customers were experiencing minor problems with the software but often failed to mention them until renewal or upgrade time rolled around, at which point a customer would say, “By the way…” and BlackLine would finally be alerted. Tucker’s solution was to launch a “WhiteGlove” program, providing all customers with a free, eight-hour consultation at any point after the formal implementation is finished. It’s the equivalent of a bicycle shop offering a free “whenever” tune-up to anyone who buys a new bike. The result? BlackLine’s overall NPS doubled from 2010 to 2013, which corresponds to the availability of the WhiteGlove program. Currently, BlackLine’s support team has an NPS of 78 percent, and the account management team is at 85 percent. (Software companies average 46 percent; technology companies in general, 37 percent.) That boost corresponds to increased revenues from existing customers. Following its participation in the WhiteGlove program, Southwest Airlines upgraded its 52 licenses from BlackLine’s basic offering to its full-service SaaS (software-as-a-service) option—and is singing the company’s praises.“Now we don’t spend as much time trying to track things down for [our accounting firm]” VICKI EVERTSON, a Southwest finance manager, tells Build. “That saves time and reduces audit fees.”

In another post for the HBR Blog Network, “The Big Goal Behind All That Customer Data,” Lee elaborates about customer value: It can be tempting to measure customers strictly by how their purchases improve your bottom line, but you need to account for their value as a promoter, too. In one case, Lee identiﬁes a customer whose “referral and inﬂuencer value”—after factoring in the revenues generated by her referrals and positive word of mouth—is worth nearly 14 times her value as a purchaser. (To learn more, search #buildengagement.) SEE ALSO B.09 C.08

C.13

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HOW MUCH DO YOU CARE ABOUT YOUR EMPLOYEES? LET US COUNT THE WAYS.

As a growing company, you do a lot to enhance your employees’ ﬁnancial futures. And you do it your own way. You craft smart beneﬁts packages, develop employees through unique training, create a high-performance culture that propels stars up the ladder. You invest in their talent – and they respond right back.

Be nationally recognized for your efforts! Enter The Principal® 10 Best Companies for Employee Financial Security awards program. Tell us how you invest in your employees and you may earn the chance to tell the world.

Winners receive: editorial coverage in Build and Inc. magazines, national and local media recognition – including an ad in your local Business Journal. And touting the distinction will have employees, recruits, and even clients, take notice. Applying is easy and free, and all applicants receive an exclusive report detailing the practices of past winners, which can help you benchmark your company’s practices.

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The Principal 10 Best Companies for Employee Financial Security award is brought to you by The Principal Financial Group in conjunction with The Build Network and Inc. magazine. t13062102nu

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Companies generate ideas all day long, but lose most of them. The solution? “Always be capturing.”

{IDEA GENERATION}

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{MANAGING PEOPLE}

An employee quits? Don’t ask: “Why are you leaving?” Ask: “What made you start looking for another job in the first place?” —SHARLYN LAUBY, president of the HR consulting firm ITM Group, as reported by LAUREN WEBER in the Wall Street Journal. Typical exit interviews are useless. Ask the right questions, though, and they can yield insights that prevent future turnover. “By finding out what spurred valued staffers to look elsewhere,” Weber explains, “managers can get to the real reasons employees feel disengaged or unhappy. Revelations about bad bosses or other organizational dysfunction—both topics that workers are discouraged to bring up in exit conversations so as not to burn bridges—may emerge in the process of recounting why the workers agreed to take that call from a recruiter or clicked on a link to a job posted by a friend on Facebook or Twitter.”

PHOTOGRAPH BY JUSTIN LAMBERT/GETTY IMAGES

There’s a hitch, of course: As Weber points out, many employees fear they’ll “burn bridges” in the exit interview if they’re too honest. On her HR Bartender blog, Lauby suggests that “if you really want employees to provide open, honest, and unﬁltered feedback, consider engaging a neutral third party to conduct the interview.” She also recommends waiting. “I’ve seen many situations where departing employees were upset with the company or their manager. A couple weeks later. . . they’re able to talk about it with less emotion.” (To learn more, search #exitinterview.) SEE ALSO A.09 B.02 B.08

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Some collaborative styles combine better than others. Find your style— and the ideal combinations for you and your colleagues—by taking this quiz.

{COLLABORATION}

We suspect you’re familiar with the concept of “leading with your strengths.” MARCUS BUCKINGHAM, a strategist who champions the idea, identified nine “strength” roles—adviser, connector, creator, equalizer, influencer, pioneer, provider, stimulator, and teacher—and devised an assessment test to help leaders learn their top two. His thinking, laid bare, goes like this: Your strength roles are how you, as a leader, have the power to make the biggest impact on your organization. If you’re a pioneer (an action-oriented risk-taker fascinated by new things), then you’ll be at your best provoking colleagues to explore what’s next. A pioneer will come off as inauthentic—and ultimately be ineffective—if she acts like an adviser (a topical expert who loves building and sharing her expertise). Central Desktop, a maker of online-collaboration and project-management software, has developed a team-oriented twist on the “strengths” concept. The company, whose customers include CBS, MLB.com, and Harvard University, identified nine types of collaborators within organizations: dinosaur, executive, expert, ringleader, siloist, skeptic, socialite, stealth ninja, and taskmaster. The overall idea is the same as Buckingham’s: By taking an assessment test (see next page), you can identify which one of the nine types best represents your collaborative style. And after your teammates take the test—and learn their styles—you’ll all be better positioned to work together. “It helps identify (or confirms suspicions of ) more difficult personality types that might be detractors to the initiative,” notes LINDA SOUZA, Central Desktop’s vice president of marketing. “You’re looking for the people who may derail your project, so you can manage that before it becomes a problem.” Are there certain combinations that are better or worse for projects? Yes, says Souza (see “suggested groupings,” next page). For example, reluctant collaborators—we’re looking at you, skeptics and siloists—are generally OK to have on a team, if there is only one of them. They can actually be helpful, as vocal contrarians who spell out worst-case scenarios. But if a team has both a skeptic and a siloist, that’s where trouble can creep in.

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WHICH TYPE OF COLLABORATOR ARE YOU? Here’s a sampler from Central Desktop’s nine - question quiz. (See “The Plus” for more.) 1 What’s the ﬁrst thing you do on Monday morning when you get to the office?

2 What is your participation style in

a. Plan my list of priorities for the week b. Check my RSS feeds c. Tell people what I did over the weekend d. Pull project stats and head to my meeting e. Browse through the intranet to see what happened over the weekend f. Head straight for my cubicle and put in my earphones g. Read the newspaper, in print h. Share interesting news from the weekend i. Question people about their weekends Answer Key: 1. a. Taskmaster b. Expert c. Socialite d. Executive e. Stealth Ninja f. Siloist g. Dinosaur h. Ringleader i. Skeptic 2. a. Skeptic b. Taskmaster c. Socialite d. Executive e. Ringleader f. Siloist g. Dinosaur h. Expert i. Stealth Ninja

a meeting? a. I ask a lot of questions and present arguments if something doesn’t make sense. b. I keep the meeting on track, take notes, and assign action items. c. I bring my phone, so I can check Facebook or text message when it gets boring. d. I usually run the meeting. e. I come up with a lot of new ideas. f. I just wait for it to be over. g. I usually of fer advice based on previous experience. h. I bring my tablet and multitask. i. I like to listen and take it all in before I give my two cents.

SUGGESTED GROUPINGS: SOCIALITE

SKEPTIC

SILOIST

Enjoys working alone and prefers working offline

Vocal opponent to collaboration who’s always wondering what’s in it for him or her

2 RINGLEADER

1 TASKMASTER

A big-ideas person who makes compelling, envelope-pushing comments

Organized to an extreme (borderline OCD); knows who’s responsible for what

A storyteller and connector who’ll keep the lines of communication open & public

EXPERT

STEALTH NINJA

A lurker who’s usually the ﬁrst to view and last to comment on any initiative

An experimenter and a problemsolver who’s the go-to person for all project-related questions

DINOSAUR

A status quo person who’s uncomfortable with new methods and technologies

3 EXECUTIVE

A decision maker with limited time who prefers only high-level involvement

Perhaps the definitive article on complementary skill sets is “The Discipline of Teams” by Jon Katzenbach and Douglas Smith, which initially appeared in Harvard Business Review in 1993. “In addition to finding the right size, teams must develop the right mix of skills, that is, each of the complementary skills necessary to do the team’s job,” they write. “As obvious as it sounds, it is a common failing in potential teams.” (To take a different version of the quiz—and savor the benefits of automated scoring—search #collaboratorquiz.) SEE ALSO A.13

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To solve your company’s technical problems, you need experts. The right mentoring program can create them.

{TALENT DEVELOPMENT}

As it turns out, fresh eyes are relatively worthless for solving technical problems in an ingenious way. Breakthroughs typically come from the experts who’ve invested the most time and concentrated energy in their fields, says RICHARD McDERMOTT, president of McDermott Consulting and author of How to Think Like an Expert. The reason for this is pretty simple: Experts don’t think about doing; they think about solving. “A novice accomplishes projects by following step-by-step procedures. An expert thinks in patterns,” McDermott says during a Knowledge Talks presentation. McDermott works with organizations that aim to cultivate experts from within. One of his clients is NASA, which has developed a rigorous, ingrained, and vast mentorship program designed to do just that. “You can definitely develop expertise, and you do it the same way a musician or an athlete would—by practicing,” notes McDermott. He extols the merits of a mentoring program for midcareer professionals. Think master classes. “Pianists learn by playing for their teacher; the teacher guides and directs them based on hearing them play. Developing good thinking skills is much the same.” In a blog post for Ask Magazine, McDermott outlined the factors responsible for the success of NASA’s mentor program. He also prescribed these rules for mentors and mentees of any company seeking to foster ingenuity: Rule 1: Scratch his back. Begin your relationship by defining your goals and by asking your mentor to do the same. “Making the mentoring relationship two-way shifts the power structure of the relationship to a more collaborative one,” McDermott writes. Rule 2: Listen out loud. “Expertise is a combination of knowledge and thinking skills,” McDermott says. The best mentors describe out loud how they diagnosed an issue, came to understand its causes, and made a difficult judgment call, he explains. Good mentees pay close attention—not just to the ultimate decision, but also to the assumptions and principles that led the way. Rule 3: Don’t ask your mentor what to do. “Instead, think aloud about a judgment call and ask your mentor to question and guide you with questions like, ‘What am I missing? What considerations should I have? Help me understand the science or principles that are working here.’ Then ask your mentor to guide you in making a decision in the same questioning way,” McDemott suggests. “Remember: The purpose of your discussion is not to solve the problem but [to] expand your thinking.”

Although the beneﬁts to mentees are obvious, the upside of a mentorship program may be less obvious to your experts. If so, consider sharing University of Miami management professor Terri Scandura’s ﬁndings. Scandura tells CBS MoneyWatch: “People who mentor often are more productive, better socialized, and less stressed. They also tend to develop a loyal network of supporters, gather valuable perspective from younger employees, and gain insight into other parts of the business.” (To learn more, search #buildmentors.) SEE ALSO A.14

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YOUR TEAM

Q: How can you make meetings more effective? A: Structure them around questions.

{MEETINGS}

There’s a reason that schoolteachers are trained to sprinkle their lessons with questions for students. It’s the same reason that dating experts and social media mavens stress the importance of asking versus telling. Questions get people talking and thinking. The same principle works for holding office meetings, and it’s easy to get it to work for you. Joris Luijke, who runs the HR blog Culture Hacking, suggests channeling the power of questions to keep meetings on point, encourage team participation, and avoid wasted time. Here’s how: Make every meeting title a question, and seek the answer in the meeting. Phrase each agenda item as a question, too. “This encourages people to think about possible responses (and therefore it makes people prepare),” Luijke says.

How do we make recruitment more effective? 23/1/2013 All day

Event details Where

ILLUSTRATION BY TODD DETWILER

Invite anyone who might have answers, but don’t expect everyone to come. Leave attendance in the hands of invitees: If they think they can answer the question at hand (or address speciﬁc agenda points), they should attend; if not, they shouldn’t. Afterward, email the answers to those who opt out.

to 10:00am

23/1/2013

Time zone

Find time Syd - 3.04 Zoolander 6P VC

Video Call Add a Google+hangout Calendar Description

9:00am Repeat

Joris Luijke Stand-up meeting

Add: Guests Rooms, etc Enter email addresses

Click the

Q1 9.00 - 9.15 - What metrics don’t we use and should be removed? Q2 9.15 - 9.30 - What metrics should we add? Q3 9.30 - 9.45 - How do we plan rewriting parts of code for the wallboard?

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Email guests

Joris Luijke Deepa Dhupella Jeff Sinclair

Only join the meeting part(s) if you can help answer the question (if any). Note: Meeting notes will be emailed to all copied invitees.

Matthew Jensen Michelle Delcambre Sam Tardiff Stephanie Fontaine Syd - 2.04 Zoolander 6P VC

SEND

Research suggests that even when employees appreciate meetings they can still get bored. In 1998, 91 percent of employees admitted to daydreaming and 39 percent admitted to actually falling asleep during meetings, according to a Verizon Conferencing white paper. That was despite the fact that 92 percent of those respondents said they valued meetings as an opportunity to contribute. (To learn more, search #bettermeetings.) A.15

icons below to mark as optional

Guests

Yes: 0, Maybe: 0, No: 0, Awaiting: 0, Optional: 0

A 2012 survey conducted by consulting firm Give More Media sheds light on what frustrates employees about meetings, and drives home the value of an agenda-based strategy. The top-10 complaints included, “No clear purpose or objective, not organized, no agenda,” and “Doesn’t start on time, stay on track, or finish on time.” An agenda built around clearly defined questions, if practiced the right way, should dispel these gripes.

SEE ALSO A.02

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“We do not put a lot of credence in formal resumes or formal education.”

{BUILD MEMBER PROFILE} THE BUSINESS: PostcardMania is a full-service (graphic design, printing, mailing-list acquisition, and mailing services) postcard directmail marketing company. EMPLOYEES: 197

POSTCARDS DON’T EXACTLY HAVE THE CACHET OF TWITTER. HOW DO YOU THINK ABOUT YOUR BUSINESS MODEL AND THE CHANCES OF BEING DISRUPTED? AS AN EXECUTIVE TEAM, WHAT ACTIONS HAVE YOU TAKEN TO STAY RELEVANT IN A DIGITAL AGE?

ANNUAL SALES: $20 million Joy Gendusa, Founder and CEO, 49

Jennifer Custer, President, 52

OTHER VITALS: Gendusa founded PostcardMania in 1998 with no start-up capital. At the time, she was running her own business, Joy Rockwell Enterprises. Frustrated that she couldn’t ﬁnd a turnkey direct-mail marketing company for promotional purposes, she decided to create one. THIS IS ONE OF THE YOUNGEST MIDMARKET LEADERSHIP TEAMS WE’VE SEEN. WE NOTICED THAT THE EXECUTIVE BIOS ON YOUR WEBSITE LACK BACKGROUND INFORMATION AND SIMPLY DESCRIBE EACH EXECUTIVE’S ROLE. WHY SKIP THE CHANCE TO SELFGLORIFY?

KICINSKI: First off, we think tra-

Sarah Kicinski, CMO, 30 PostcardMania Clearwater, Florida

Photographs by Jörg Meyer

ditional bios are super boring. Secondly, we are a marketing company, so we stress the benefits we provide to clients, rather than [individual credentials]. And finally, I am the only senior executive with a college degree; our CEO, Joy Gendusa, is a high-school dropout. So, we don’t put a lot of credence in formal resumes or formal education. Also, for many of us—COO Melissa Bradshaw and me specifically—this was our first real job. I have been here since college [eight years], and Melissa joined when she was just 19 years old.

GENDUSA: We have an amaz-

ing product that the brilliant Sarah Kicinski came up with called Direct Mail 2.0. It marries direct mail with Google remarketing and incorporates mail tracking and call tracking as well. The truth is, direct mail is incredible when it comes to targeting and enlightenment to a very specific demographic. There are tons of products and services out there that people don’t know about—they’re not searching for them because they don’t have a clue they need them. Direct mail is actually working better than ever as more businesses leave that channel and switch to the Internet solely. SPEAKING OF MARRYING DIRECT MAIL AND THE INTERNET, YOU DO THAT AS WELL TO RECRUIT CLIENTS, CORRECT?

KICINSKI: Here is our market-

ing plan in a nutshell: Drive as much traffic as we can to our website. Then try to convert as many of those people into leads by offering them free postcard samples or free reports, or by having them call and speak to a marketing consultant. Each week,

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we generate about 550 leads through our website and about 250 leads via calls to our marketing consultants. The 250 who call in are our hottest leads, and we can close them pretty easily. The other 550 leads go into an automated lead-nurturing program that I developed that includes phone calls, e-mails, and direct mail pieces, all focused on getting that lead to call in to speak to a marketing consultant. About 30 percent of those leads end up calling in and ultimately speaking to a marketing consultant. WHAT’S BEEN THE BIGGEST CHALLENGE THAT YOUR SENIOR MANAGEMENT TEAM HAS FACED AS THE COMPANY HAS GROWN, AND WHAT HAVE YOU LEARNED?

CUSTER: We have a very close familial relationship with many of our staff. As we have grown, we have gotten into a situation where some of our managers and executives are no longer qualified for their positions based on the changing requirements of those positions. We have learned that there is a gentle way of repurposing these loyal and hard-working employees into positions that are a better fit for their skills, in order to make room for more qualified people to take over the executive roles.

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“Idea markets” are becoming a popular way to drive innovation. But what do they look like in practice? Think of them as an internal version of Kickstarter.

{COLLABORATION}

At Rite-Solutions, idea markets aren’t new: The 150-employee IT company has operated an internal Kickstarter-like program since 2005. So far, the program has generated more than 50 ideas, 15 of which have been launched—and now account for 20 percent of the company’s total revenue. One of these resulting products is Rite-Track, a GPS system that monitors the safety of school buses while they’re in transit. The system (patent and trademark pending) is already installed in some 300 school buses in Rhode Island and Connecticut. Here, in five steps, is how the Rite-Solutions idea market works, illustrated by how RiteTrack went from idea to product.

Step 5: Execution The idea moves into project management, where it might be taken all the way through to production, or perhaps patented but not produced, depending on business needs. By this stage, ideas that have failed to sustain interest have been purged; investors get a one-week warning to move on an idea or see it die.

Step 4: Relationship Harvesting After the idea gains a critical mass of imaginary investments, the company identifies which employees know people who can—ahem—put the wheels in motion for the idea to become a viable product. This is a deep dive into who they know and how they know them, filtering contacts in a way that’s important to executing the idea. At this stage in Rite-Track’s development, Rite-Solutions CEO JIM LAVOIE asked whether anyone in management knew someone at any of the local school bus companies. As it turned out, a Rite-Solutions employee knew a VP at one of the companies.

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Step 1: Pitching Someone asks a big “what if” question. Employees pitch answers in the form of ideas and then rate each pitch with one to five stars. The highest-rated solution moves on to the next step. In the case of Rite-Track, the question came from management: What commercial product could we make with our knowledge of real-time asset tracking, optimization, and visualization for the military? The winning response was, “We could make a product that would ensure a safer trip for children going to school on the bus.”

art tk

Step 2: Official Proposal The top idea gets fleshed out as an official proposal that contains a detailed description of what the product’s capabilities might include. In the case of Rite-Track, proposed features included “provides en-route bus alerts and notifications” and “supports full display/recall/replay of bus activities.”

Step 3: Employee Investment When the proposal is ready, employees can choose how much to invest; the company gives every staffer an imaginary $10,000. Employees may also invest imaginary time or resources in the project, responding to the proposal’s requests for assistance.

“Yes, the tools matter. Culture matters more,” argues Michael Schrage, research fellow at MIT Sloan School’s Center for Digital Business. His argument: While technology is important for mining internal ideas, incentivizing the creation or implementation of ideas is just as vital. “How does your culture recognize and reward the sharing that can make a (huge) difference?” he asks in a blog post for the HBR Blog Network titled “A Simpler Way to Get Employees to Share.” (To learn more, search #kickstartideas.) SEE ALSO A.02

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All new hires face a learning curve. Here’s a checklist of seven tasks that can get them up to speed faster.

{TRAINING}

Managers often complain about the new-employee learning curve as if the time required to ascend it isn’t largely the organization’s fault. In fact, a deliberately structured and executed onboarding process can dramatically fast-track a newcomer’s alignment with your culture and performance expectations. Here’s a checklist of seven steps that any smart onboarding process should include. Our source is MICHAEL D. WATKINS’s recently updated book The First 90 Days: Proven Strategies for Getting Up to Speed Faster and Smarter. The list targets recently hired employees of all levels. We’ve tweaked it, so that someone in your shoes—an executive looking for fast results—can improve the onboarding process for new team members. BUSINESS ORIENTATION

As early as possible, provide access to ﬁnancial, product, strategy, and brand information. Provide tours of key facilities before the formal start date. STAKEHOLDER CONNECTIONS

Provide introductions to key people with whom the new employee should connect early. Make sure the new employee has time to meet with these key stakeholders. EXPECTATIONS ALIGNMENT

Schedule a conversation with the new employee in the ﬁrst week to talk speciﬁcally about expectations and working styles. CULTURAL ADAPTATION

Schedule a conversation between the new employee and the HR department to discuss the organization’s culture. Schedule a meeting after 30 days with the new employee to discuss the adaptation process.

The recent New York Times blog post “Getting New Employees Off to a Good Start” packs loads of helpful onboarding tips. For example: Warby Parker, a manufacturer and retailer of eyeglasses, gives new hires a welcome packet on their ﬁrst day that includes items important to company history, including a copy of Jack Kerouac’s novel Dharma Bums, because the company is named after two characters in the author’s unpublished journals, and Martin’s Pretzels, because the founders ate them often in the early days. (To learn more, search #ﬁrstdays.) SEE ALSO A.03

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Let’s make a deal? Many midmarket companies are considering acquisitions. And more companies may be open to offers, if the terms are right.

{GROWTH STRATEGIES}

As leaders of midmarket companies increasingly focus on the top line, a substantial number are considering acquisitions as part of their growth strategy. There are several reasons to believe that M&A activity in the midmarket will see a notable uptick this year: Improved access to and liquidity of debt capital A perceived increase in the supply of potential targets as family-, entrepreneur-, and private equity-owned firms look for an exit strategy Strength of the U.S. market relative to international alternatives Attractive multiples High levels of available capital from U.S.-based private equity firms, who are sitting on more than $400 billion in “dry powder” and increasingly see midmarket firms as appealing investment opportunities A recent survey of 525 midmarket executives conducted on behalf of How Likely Is It That Your Company Will Deloitte LLP found that while the number of companies who cited “growing by Participate In A Merger Or Acquistion acquisition” as being a “very likely” or “likely” path to growth this year is down In The Coming Year As An Acquirer? slightly from 2012, nonetheless it remains the second most commonly cited straWe are not tegic priority for 2013, topped only by “organic growth within existing markets.” Quite likely looking but (It’s worth noting that there has been a notable spike in the number of companies 17.4% would consider who describe themselves as “not looking but would consider a deal”; see chart.) a deal Very likely 28% If an acquisition, be it domestic or global, appears to be an attractive 13.9% option, companies should accept that such an undertaking will be time and capital intensive. But acquisitions can be a great way for companies to expand Don’t know 1.1% rapidly, achieve economies of scale, and acquire new customers, products, or Not likely enabling technologies. Acquiring a company in an emerging country, while Highly 19.8% unlikely far from simple, is now easier than in previous cycles because leading prac19.9% tices and precedents have emerged regarding tax laws, cross-border movements of money and goods, and other considerations. “While many factors have been in and remain in buyers’ favor,” notes Kevin McFarlane, managing director for Deloitte Corporate Finance LLC, “what’s been missing has been a supply of willing sellers. Now these companies can point to several years of strong post-recession performance, which gives them confidence that they can meet their pricing expectations.” Buyers may have to adjust theirs accordingly, but McFarlane believes that the supply and demand lines are about to cross. “There has been a lot of talk about an impending M&A boom for some time,” he says. “Over the next 12 to 18 months I think we’ll see that this time it’s for real.” A COLLABORATION WITH

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Happy people far outperform unhappy and neutral ones. (No kidding.) Thankfully, it’s easier than you think to instill happiness in your employees.

{MOTIVATION}

Life satisfaction scale

A A

Beginning 4 months of trial later

The participants’ mean score on the life satisfaction scale—a metric accepted to be one of the greatest predictors of productivity and happiness at work—moved from 22.96 on a 35-point scale before the training to 27.23 four months later, a signiﬁcant increase.

When 44 internists were given a hypothetical patient file—including a misdiagnosis from another hospital—and asked to solve the medical problem at hand, doctors in one half of the group made the correct diagnosis more often than those in the other half. Were they among the 22 physicians who were given medical journals to study ahead of time or the 22 who received a bag of candy to be eaten afterward? Dr. House would surely cringe at the answer: The group receiving the candy did far better. “The doctors who are primed to be happy come to the correct diagnosis twice as fast as those who are thinking in the medical mode,” explains SHAWN ACHOR, former Harvard researcher and author of The Happiness Advantage. The message is not that doctors love their Butterfingers or even that rewards induce better behavior. The real takeaway, Achor asserts, is that happy people always outperform those who are neutral or miserable. “I can give you an SAT test, a Sudoku puzzle, a crossword puzzle—any of 15 different tasks all requiring intelligence—and prime you to be in a happy group, a neutral group, or an unhappy group,” says Achor, citing a study of 65,000 businesspeople. “The happy group will outperform the others every single time.” Putting this finding to work does not require a full-scale HR overhaul or a juicy benefits program. During the abysmal tax season of 2008, Achor managed to improve the happiness and productivity of a group of tax managers at KPMG simply by asking them to do one of these tasks during the workday: Jot down three things you are grateful for. Write a positive message to someone in your social support network. Meditate at your desk for two minutes. Exercise for 10 minutes. Take two minutes to write down in a journal the most meaningful experiences of the past 24 hours. “The participants’ mean score on the life satisfaction scale—a metric widely accepted to be one of the greatest predictors of productivity and happiness at work—moved from 22.96 on a 35-point scale before the training to 27.23 four months later, a significant increase,” writes Achor in Harvard Business Review. “Just one quick exercise a day kept these tax managers happier for months after the training program had ended. Happiness had become habitual.”

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PHOTOGRAPH BY ERIC KULIN

That the tax managers maintained their happiness lends credence to a psychological concept called the Tetris Effect. In 1992, psychology professor Richard Haier studied why players of the game see visions of shapes falling and rotating in their sleep and determined that the brain is working out solutions. Writing in Wired, Jeffrey Goldsmith described how brain chemistry changes after several weeks of daily play; the brain seems to train itself to learn more efficiently. (To learn more, search #buildhappiness.) SEE ALSO A.16

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Some companies will do anything to help employees thrive— even if it means helping them land a better job elsewhere.

{TALENT MANAGEMENT}

68%

Asked what they do when they ﬁnd out an employee is seeking a new job, a whopping 68 percent said they help by making introductions or offering guidance.

Most managers say they’re supportive of their employees, but the results of a recent poll by the SmartBlog on Leadership found that many are supportive to a surprising degree: Asked what they do when they find out an employee is seeking a new job, a whopping 68 percent said they help by making introductions or offering guidance. That kind of extreme support for employees seeking greener pastures—not just acceptance of their goal but assistance in facilitating it—seems counterintuitive. Here’s the case for it: 1 It makes you look good. MIKE FIGLIUOLO, managing director at ThoughtLeaders, which published the results of the poll, writes: “If they’re not happy, help them go. . . . If you actively oppose them or fire them, those actions become part of your reputation (and it’s not pretty), which will make it harder for you to recruit replacements.” 2 You get more honest insight about what’s not working. When employees depart via the usual two weeks’ notice plus pro forma exit interview, they control the conversation. When you help them move, you create more opportunity to find out why they want to move on. Brace yourself: Odds are good that part of their dissatisfaction is you. 3 Speaking of that two weeks’ notice . . . Management consultant ALISON FREEN advocates a culture of open career discussion between managers and employees. One benefit, she notes at AskAManager.org: She gets a major heads-up that somebody is thinking about leaving, which helps her find a suitable replacement and creates a valuable period of overlap between the departing employee and the newbie. All well and good, but how do you establish a culture that encourages employees to be so forthcoming? Build reached out to Figliuolo for insights. Incentivize employee development. Bonuses are too often tied to the bottom line, Figliuolo says. By tying managerial bonuses to development—a certain number of employees need either to be promoted internally or to accept higher positions elsewhere, for instance—managers will be compelled to open these dialogues. “If it’s not a goal, it’s not going to happen,” he says. Change the language of the performance review. “The standard question of ‘Where do you see yourself in five years?’ is crap,” Figliuolo says. Instead, the conversation should be about skills: which skills the manager thinks the employee should develop and which skills the employee wants to develop. This often leads to an expanded discussion about the employee’s future role(s) with the company versus the benefits of pursuing a different path, either elsewhere within the company or at a different company.

One criticism of open discussions is that they can encourage employees to take liberties with just how much time they’re devoting to the hunt. But Figliuolo argues that openness actually prevents this from becoming an issue because the manager and employee are on the same page. “They’re going to start looking whether you know about it or not,” he tells Build. (To learn more, search #buildtalent.) SEE ALSO B.04

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{EMPLOYEE ENGAGEMENT}

““The The most important predictor of the success of a company …was how many people answered ‘yes’ to the question, ‘Do you have the opportunity to do what you do best every day?’” PHOTOGRAPH BY ANDREW BRET WALLIS /GETTY IMAGES

—SHERYL SANDBERG, COO of Facebook, recounting a research ﬁnding in MARCUS BUCKINGHAM and DONALD O. CLIFTON’s book Now, Discover Your Strengths—which Sandberg told the New York Times was the best business book she’s read lately. “[It] has been instrumental in how we think about developing talent at Facebook. . . . Most performance reviews focus more on ‘development areas’ (a.k.a., weaknesses) than strengths. People are told to work harder and get better at those areas, but people don’t have to be good at everything. At Facebook . . . we focus on what people’s natural strengths are and spend our management time trying to ﬁnd ways for them to use those strengths every day.”

Buckingham and Clifton’s book isn’t the only one Sandberg recommends in the Times interview. She touts The Lean Startup: How Today’s Entrepreneurs Use Continuous Innovation to Create Radically Successful Businesses by Eric Ries for getting Silicon Valley right. “Ries advocates that, for tech, a better way to perfect a product is to introduce it to the market and get customers using it and giving feedback, so you can learn and then iterate,” she says. (To learn more, search #bestwork.) SEE ALSO A.04

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WorldMags.net From Regional to National: How a Snackmaker Fed Its Need for Growth

After nearly a century in business, Utz Quality Foods looks to up the ante by moving into a national footprint Snack producer Utz Quality Foods might be a third-generation, family-owned company that celebrated its 90th birthday just two years ago, but when it comes to its communications infrastructure, it’s anything but old-fashioned. “We’re in acquisition mode right now, so our biggest technology challenge is integrating our infrastructure into new warehouses and manufacturing facilities across the country,” says J. Ed Smith, chief information director. Under the leadership of Dylan Lissette, president & chief operating officer (not to mention the son-in-law of the owner), the company, whose 2012 sales exceeded $500 million, has embarked on an ambitious plan to grow strategically beyond its traditional Mid-Atlantic territory to create “more of a nationwide footprint,” Smith says. In the past two years, Utz bought Louisiana-based Zapps, giving it a foothold in the South and West Coast, Wachusett Chips in New England, and Bachman pretzels, based in Pennsylvania. The strategy comes amid deep changes in the $560 billion global snack-food industry. Faced with steep competition from behemoths such as Frito-Lay, smaller players have to break out of their traditional regional focus and look for new markets as well as a growing variety of retail outlets. At the same time, sophisticated consumers are attracted to niche brands that offer something out of the ordinary. SCALING COMMUNICATIONS TO MEET DISTRIBUTION NEEDS Utz’s primary business model is direct store delivery (DSD), in which the company’s sales staff stocks the shelves of more than 60,000 points of sale including grocery chains such as Food Lion, Kroger, and Giant, as well as independents. These markets are served from 50-plus companyowned distribution centers strategically located up and down the East Coast. For national clients, including Walmart and Costco, Utz pushes product out to the retailers’ own distribution centers. “Name a retailer, and we’re probably business partners with them,” Smith says. All this activity requires a robust, dependable, and scalable communications system. Just recently, Smith oversaw the complete overhaul of the entire telecommunications infrastructure for the company’s Hanover campus, which includes four manufacturing facilities as well as corporate headquarters. Smith gives kudos to his then-manager of network services, Brad Strausbaugh, who oversaw the upgrade of the company’s legacy PBX system and replaced the local telephone copper and T1 connections with Comcast fiber Metro Ethernet. “We’ve increased our bandwidth 300 percent, and we’re also saving in excess of $45,000 a year,” he says. “What’s not to

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love?” The complex project, completed in January 2013, took about 3 months to implement, with an additional six to eight months of planning beforehand. “Comcast was right there all the way, making sure all our connectivity issues were resolved,” Smith says. “They really took ownership of the project.” TECHNOLOGY LEVELS THE PLAYING FIELD Smith sees technology as a game-changer in the snack-food industry. “We develop most of our software, such as our manufacturing system, in-house,” he says. “We think that differentiates us by giving us flexibility where we need to be flexible.” Smith does favor some off-the-shelf enterprise software for certain functions (e.g., Lawson for payroll and human resources; Infinium for supplychain management, accounting, and general ledger; and WebFocus, a business-intelligence tool, for sales analytics), but he’s wary of ERP solutions that require designing the business around the software instead of the other way around. “Staying nimble and flexible is key as we grow our business,” he notes. As for the future, Smith established an emerging-technology brainstorming group to develop new ideas. “There are no barriers on the conversation,” he says. “We don’t even talk about cost.” But there is one overriding criterion that any technology solution must meet: “Our business and organization is very customer-oriented and sales-centric, and all of our software is designed with this in mind,” he says. “We want to keep the focus on the customer. In that way,” he adds, “I guess we’re still old-fashioned.”

The Comcast Business Class Metro Ethernet ser vice that Utz Quality Foods utilizes of fers scalable speeds up to 10Gbps, lower operational costs, a diverse private network, and wide network reach with deep local capabilities. Metro Ethernet of fers more bandwidth for less—with savings up to 30 percent compared to older technologies. To learn more, check out Comcast Business Class Ethernet at http://business.comcast.com, or call (866) 429 -2241.

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“BASTARDS, GENTLEMEN, and LADIES can be project managers. Lost souls, procrastinators, and wishy-washers cannot.” —The late JERRY MADDEN, a project manager at NASA for 37 years. Madden, who died in 2011, retired in 1995 as associate director of ﬂight projects at Goddard Space Flight Center. Madden penned a now-famous list of 128 lessons for project managers, which still circulates at NASA today; this quote is lesson number 87.

Whether or not you think NASA is still relevant, you have to admit it’s had a pretty good run. Especially in light of this comment by Madden: “An agency’s age can be estimated by the number of reports and meetings it has. The older it gets, the more the paperwork increases and the less product is delivered per dollar. Many people have suggested that an agency self-destruct every 25 years and be reborn starting from scratch.” (To learn more, search #buildprojects.) SEE ALSO A.05

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{PROJECT MANAGEMENT}

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Forget brainstorming. Try “brainwriting” instead.

{MEETINGS}

Here’s a sobering statistic about team dynamics: In a typical six- or eight-person group, three people do 70 percent of the talking. That translates into less than four minutes of floor time for each of the remaining participants during an hour-long meeting. “The topper is that the dominant people do not realize this,” writes LEIGH THOMPSON, author of Creative Conspiracy: The New Rules of Breakthrough Collaboration, in Fortune. “In fact, they vehemently argue that the meetings are egalitarian. They lack self-awareness.” How can you wrest control away from the meeting tyrants? Thompson has a technique for fostering productive team democracy: brainwriting, which she describes as “the simultaneous written generation of ideas.” Here’s how it works.

ILLUSTRATIONS BY TODD DETWILER

1. Write just one sentence each. For the first 5 or 10 minutes of your next idea-generation meeting, have each team member write down one good idea or one proposed solution on, say, an index card. Bonus tip: the smaller the card, the better. You want one sentence, not a paragraph.

2. Consider the idea, not the source. When time’s up, all cards are submitted anonymously and taped or thumbtacked to a wall for the whole team’s consideration. “I have two rules: no guessing and no confessions,” Thompson says. “No one signs their name . . . and I don’t want anyone guessing who said what.”

3. Put it to a blind vote. Team members signal their interest in an idea by marking it with a sticker. Everyone gets a limited number of stickers and, if done right, the best ideas emerge quickly. “It should be a meritocracy of ideas,” Thompson says. “I shouldn’t be voting for the CMO’s idea; I should be voting for an idea that I think is going to be exciting for our organization.”

“A brainstorming session is a great place to load up on baked goods and caffeine, but it’s not so great for generating ideas,” writes Debra Kaye in the Fast Company article “Why Innovation by Brainstorming Doesn’t Work.” She says companies should abandon the practice altogether because people don’t make creative connections in rigid or high-pressure atmospheres. “Fresh ideas come when your brain is relaxed and engaged in something other than the problem you’re embroiled in.” (To learn more, search #buildstorm.) SEE ALSO A.02 A.06

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An “always-on” culture hurts company performance. Solution: Institute “predictable time off.”

{WORK/LIFE BALANCE}

50+

Ninety-four percent of employees in professional services said they worked at least 50 hours per week, not including the 20 to 25 hours they spent using their smartphones outside the office.

We all know that work-life balance is important: When people have the time to enjoy personal and family interests, they are happier and more productive, and you can cross “employee burnout” off your worry list. Sounds logical, right? However, until recently the perceived value of work-life balance was largely based on anecdote and intuition. The research is now in, the hunch has been proved correct, and the solution is easy, says LESLIE PERLOW, a Harvard professor and author of the book Sleeping With Your Smartphone: How to Break the 24/7 Habit and Change the Way You Work. Writing in Harvard Business Review, Perlow and research associate JESSICA PORTER cite a 2008 survey that found that 94 percent of employees in professional services said they worked at least 50 hours per week, not including the 20 to 25 hours they spent using their smartphones outside the office. Perlow also studied employees at the Boston Consulting Group over the course of four years. She recommended one simple change that had a major effect on the productivity of the firm’s North American employees: She asked the members of some teams to take one preplanned night off per week. As in, totally off—no e-mails, no voice mails, no activities that had anything to do with work. The results were staggering. Compared with teams that did not take “predictable time off” (or PTO, as Perlow abbreviates it), those that did were more excited to start work in the morning and more satisfied with both their jobs and their work-life balance. Beyond that, the employees involved in the PTO program said they were more likely to stay with the firm long term and to perceive themselves as providing significant value to clients. Meanwhile, then-CEO HANS-PAUL BÜRKNER (who’s now chairman) told Perlow that PTO “has proven not only to enhance work-life balance, making careers much more sustainable, but also to improve client value delivery, consultant development, business-services team effectiveness, and overall case experience. It is becoming part of the culture—the future of Boston Consulting Group.” Perlow suggests that PTO policies, while requiring the C-suite’s commitment and support, be organized at the team level, with employees deciding who takes which nights off and meeting regularly to refine the approach.

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PHOTOGRAPH BY ERIC KULIN

Another important ﬁnding of Perlow’s research: Employees using PTO rated their teams as more collaborative, efficient, and effective than their non-PTO counterparts. “Our experiments with time off resulted in more open dialogue among team members, which is valuable in itself,” Perlow and Porter write in HBR. “But the improved communication also sparked new processes that enhanced the teams’ ability to work most efficiently and effectively.” (To learn more, search #timeoff.) SEE ALSO A.11

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An alarming number of IT projects ﬂat out fail. The right C-level support would change that.

{PROJECT MANAGEMENT}

The next time you get the ball rolling on an IT project at your company, keep these numbers from The Standish Group in mind:

Just 37 percent of IT projects are successful. 42 percent go over budget, aren’t completed on time, or don’t deliver what they’re supposed to. And 21 percent ﬂat out fail.

Just 37 percent of IT projects are successful. 42 percent go over budget, aren’t completed on time, or don’t deliver what they’re supposed to. And 21 percent ﬂat out fail. Yikes. Those numbers, reported in Computerworld by MINDA ZETLIN, beg the question: What does it take to get these damn things right? Standish Group chairman JIM JOHNSON revealed a key finding in the report. “Johnson says the projects that succeeded either had skilled executive sponsors or were ‘purely mechanical’ undertakings that required no business-side buy-in,” Zetlin writes. A C-suite sponsor to help guide IT projects? Isn’t that why you have an IT director in the first place? Maybe in theory. But as GARY HEUSNER, a partner at software company Geneca with a tech background, tells Zetlin, “IT doesn’t fully own the business concerns. If we were meant to be the chief marketing officer or chief operating officer, those are the jobs we would have.” While an IT head might put up blinders—intentionally or otherwise—to broader organizational concerns during the course of a project, the oversight of a CEO, CFO, or COO will keep those concerns on the radar. The sponsor might also form a steering committee with representatives from across the organization whose departments might be touched by the project. So who’s your project’s sponsor? Sponsors shouldn’t be assigned—or even rotated. Some projects might need the CMO, others the COO. It depends on the project. Zetlin cites the example, voiced by GlassHouse Technologies CTO JAMES DAMOULAKIS, of data storage projects. With the cost of storage soaring, IT might be tasked with finding a cheaper alternative—even though cost does not typically rank high on the list of IT concerns. “So you need a push from someone like the CFO to make sure everyone will comply,” Damoulakis says. But even if organizational role and expertise are important, consultant JILL DYCHÉ writes in the compelling blog post “Six Archetypes of a Bad Executive Sponsor,” the prospective sponsor’s personality and circumstances are also a factor. “The best executive sponsors are those who choose the role. The second best sponsors are those who vet the role that’s requested of them. They ask what needs to be done in the role, decide whether or not they could contribute, and inherently know that they’ll be effective before saying yes.”

Another issue with IT projects? CIOs might be stretched too thin. That’s the argument of IT expert Peter Aiken, who says the CIO role should be largely operational. The trouble is that responsibility for big data has largely been thrown under the CIO’s tent. Aiken’s suggestion: Data functions should be stripped from the job description and instead integrated into a new C-level role that also works in the IT realm: the Chief Data Officer. (To learn more, search #ITprojects.) SEE ALSO A.04

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{HOLD ME, CARESS ME.}

PLEASE DON’T TEAR ME APART.

SHARE BUILD ARTICLES ONLINE INSTEAD. SEARCH BY ARTICLE #HASHTAGS ON WWW.THEBUILDNETWORK .COM THENWorldMags.net E-MAIL, TWEET, AND SHARE .

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Whatâ&#x20AC;&#x2122;s your role? (Not your job. Your role.)

What does your business need from you? How can you be the best leader possibleâ&#x20AC;&#x201D;in your particular skin, for your unique team, at this uncertain time? Where can you turn for help? How can we build leaders like you to last?

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HOW THIS SECTION BREAKS DOWN:

19% Communication B.08 / B.15 / B.16

38% Leadership B.02 / B.03 / B.05 / B.06 / B.07 / B.12

12% Customer-centricity B.09 / B.14

12% Human Capital B.04 / B.10

19% Managing Yourself B.01 / B.11 / B.13

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Your to-do list is too long. Here’s why (and how) to shorten it.

{MANAGING YOURSELF}

Ever feel as if, in the quest to get everything done, you’re not quite doing enough? For example, you’ve heard on various occasions (including once or twice from us) how important it is to maintain your professional network(s). But corresponding with old colleagues takes time—time that could be spent doing your actual job or bonding with your current coworkers. In an article on LinkedIn, J.T. O’DONNELL, CEO of Careerealism Media, offers a refreshing approach to the “How can I get it all done?” problem. Her solution: Limit your daily to-do list to 10 things, and don’t beat yourself up if you don’t get them all done. As you can see, O’Donnell’s personal list comprises a balance of job tasks, social chores, and developmental goals:

“Yes, there are days when I don’t get them all done, but I do my best to deliver,” she says, noting that her list could be longer. “But if it was longer, I wouldn’t be as good at getting them all done.” Of course, O’Donnell adds, she does more every day than this list captures, but over time the priorities on her list have “proven the best way for me to grow my career and my business. The collective results have made completing these tasks consistently, even when I don’t feel like it, well worth it.”

In creating your own daily to-do list, follow this important rule of thumb: No task should take an inordinate amount of time to complete. Want more advice for putting together a daily to-do list that’s actually doable? We recommend Cody Wheeler’s article on Lifehack.org, “Are You Making This Major Daily To-Do List Mistake?” (To learn more, search #buildgoals.) SEE ALSO B.11

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THE CEO

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THE CEO

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3 tips to help a valuable employee become less long-winded

{COACHING}

It’s a problem to which many managers can relate: I have an employee who is extremely detailed in every way. This can be great in some cases, but whenever she speaks (in a meeting or just one-on-one), she is extremely longwinded. She will generally say the same thing in three different ways and then summarize again. Her emails and written projects are novels. . . . Do you have any advice? ALISON GREEN replied to this question, via her Ask a Manager blog, with some great tips for helping an overly communicative employee keep things brief. Here are her three most broadly applicable pearls of wisdom: 1

Sit down with the employee and be explicit about the fact that you want to have a serious conversation about a work habit. “I know you’ve talked with her about this before, but because it didn’t have a lasting impact, it’s time for another conversation, and this one has to feel more serious, so that it’s clear to her that you’re not just making suggestions or giving offhand advice,” Green writes.

Give speciﬁc guidelines. “It’s not enough just to say ‘keep things shorter,’ because her calibration meter in this regard is off,” Green notes. “She can’t tell when something is too long. So you need to spell it out much more specifically. For example, you might tell her that no memo should be longer than one page and that they should be primarily written in bullet points; no email should be more than three short paragraphs; presentations should be no longer than X minutes; and she should observe how long others speak at meetings and speak no longer than that herself.”

Provide ongoing coaching. “For instance, when you assign her a written project, give her a maximum page count at the outset. If she’s concerned that she won’t be able to include all the information she thinks should be included, talk through her thought process. As you hear what she’s worried won’t fit in, explain to her why X is important to include but Y isn’t,” Green writes. “And explain to her—explicitly—that higherlevel decision makers . . . specifically don’t want all the information. They want highlevel conclusions and takeaways, and to be able to trust that that’s been backed up by thought and research before it came to them.”

In a post for Intuit’s QuickBase blog titled “How to Protect Your Time From Long-winded Colleagues, Callers, and Other Interruptions,” Green offers more tips for interacting with the brevity-challenged without losing your patience. Our favorite: “Set a time limit for the conversation at the very start, such as ‘I’ve only got a minute to talk’ or ‘I appreciate the phone call but only have a second to talk.’” (To learn more, search #buildcommunication.) SEE ALSO A.03 B.08

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{

{DECISION MAKING}

“W WRONG DECISIONS MADE EARLY CAN BE SALVAGED, BUT ‘RIGHT’ DECISIONS MADE LATE CANNOT.” PHOTOGRAPH BY NASA /GETTY IMAAGES

—The late JERRY MADDEN, a project manager at NASA for 37 years. Madden, who died in 2011, retired in 1995 as associate director of ﬂight projects at Goddard Space Flight Center, having seen to it that great ideas became tangible innovations. During his tenure, he coordinated NASA’s technology, teams, and bureaucracy to get stuff done—like studying cosmic rays and observing the Earth from space. He also created a widely shared list of 128 lessons for project managers. This one is No. 15.

Madden’s manifesto offers a virtual master class in project management. Many of the lessons on his list grace our thinking, among them his observation that “the project manager who is the smartest man on his project has done a lousy job of recruitment.” (To learn more, search #projectmanagement.) SEE ALSO A.05

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To win the war for talent, rethink key aspects of the recruitment and hiring process.

{LEADERSHIP}

Your employees are the lifeblood of your company, and while the current unemployment rate may make it seem to be a buyer’s market for talent, competition for the best job candidates is as fierce as ever. Therefore it’s important that companies of all sizes become more sophisticated in the ways they recruit potential hires. Companies can no longer simply post an opening and sift through the resulting pile of resumes. To win the war for talent, executives and hiring managers should work closely with human resources departments to take advantage of a number of innovative techniques for reaching and ultimately hiring the best people available. 1

Be Aggressive About Passive Candidates For starters, be proactive. Don’t begin your search for talent when an employee gives notice, or when the company creates a new position, but well before. Cultivate a roster of potential hires by devoting time to your personal and social media networks. Embrace the practice of “passive” or “continuous” recruiting, whereby companies initiate and maintain connections with people who are not actively seeking new positions but might be open to talking. This can be a great way to become acquainted with promising candidates over a period of many weeks or months. For growing companies it can serve to create a pipeline of talent that can be hired fairly quickly in times of expansion. Companies that want to develop more bench strength in specific areas, such as engineering or finance, also find it useful. And passive recruiting is a great way to stay in touch with valued employees who have left, or past applicants who may not have been right for a previous opening but might be ideal for another.

“Companies need to offer the best candidate experience possible. You’re not just asking questions, you’re selling the company.“ –Kim Warne, U.S. Talent Recruitment Leader, GE

Promote Your Brand As Well As the Opportunity Job postings remain a viable way to attract active candidates, but the key is to craft them with an eye toward attracting the best talent rather than simply screening out weaker job seekers. The hiring manager should craft a job description that does two things: (1) clarifies performance expectations and (2) underscores the appeal of the company. It should also provide a clear picture of the company’s values and work environment, since you will ultimately be evaluating candidates on a combination of their skills and experience. The more information you provide, the more you will help them make an informed decision. Employee referrals also play a very useful role here, since current employees can provide an invaluable insider’s perspective to would-be applicants and vouch for their suitability to a hiring manager. Consider creating YouTube videos that provide an inside look at your organization. If you work with outside recruiters, make sure their approach is in synch with your emphasis on job performance and your desire to find people who are likely to succeed in your organization.

A COLLABORATION WITH

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Become an Ace Interviewer Once you have a list of finalists to be interviewed, consider asking different kinds of questions, and avoid some common THREE STEPS TO BETTER INTERVIEWING practices that can impede making the optimum choice. Recruitment expert LOU ADLER cautions that, “More hiring Make it a team effort. Have the candidate meet with mistakes are made in the first 30 minutes of the interview several people. Gather their than at any other point in the process.” Too often the hiring impressions right away. manager quickly decides whether or not she likes the canMake sure you all underdidate, and that judgment shapes the rest of the interview. stand who has ﬁnal say on This can result in quick judgments that can lead to poor making an offer. hiring decisions. Ask them to explain As for what questions to ask, “behavioral interviewsomething complicated. ing” is very useful: Ask for an example of how the interviewCandidates who take a few ee dealt with a challenging situation, what specific role they moments to gather their played as the situation unfolded, and what they learned from thoughts often prove to be it. A single, open-ended question that lends itself to followgreat hires. ups can reveal a lot about a candidate. Withhold all judgments for KEVIN MORRILL, CTO and cofounder of Referly, a at least 30 minutes. Remain social shopping platform, relies on an interview technique neutral on a candidate’s likehe learned while at Microsoft. “I ask candidates to explain ability; your gut instinct may something to me in five minutes,” he says. “It can be anyshape how you interview them and distort the result. thing at all. One person explained how to play poker, and another summarized a book they had just read.” The goal is to see how well the interviewee can communicate something reasonably complex, and whether he or she can can stay on target. Morrill will sometimes interrupt to ask a tangential question. He’s hoping the interviewee will find a graceful way to deflect the question rather than become distracted by it. The ability to remain focused is what counts. As for the people who don’t get the offers, treat them well. Let them know what the winning candidate possessed that made the difference, and stay in touch with them (particularly the finalists, who may be ideal for another position). When candidates are left with a positive impression of your company they may act as ambassadors for you, encouraging friends and colleagues to consider the opportunities your company may have for them. Yes, even the manner in which you say no to a job candidate can help you win the war for talent.

This ar ticle is adapted from “How to Win the War for Talent,” par t of the Action Resource Series produced by GE Capital in conjunc tion with The Build Network. For more, download the free Access GE app, available at http://app.accessge.com.

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THE CEO

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Employees want to be connected, not inspired. Smart leaders foster collaboration.

{LEADERSHIP}

30%

“Companies that outperform their peers are 30 percent more likely to identify openness—often characterized by a greater use of social media—as a key enabler of collaboration and innovation to inﬂuence their organization.” –Mark Fidelman Forbes.com contributor

16%

Only 16 percent of CEOs actively use [social networks]. The other 84 percent may have to join in soon.

“Whether your employees love or just barely like your company doesn’t make that much difference to their performance,” notes MARIKA KRAUSOVA, a senior research analyst for the Corporate Executive Board. Does that mean that employees of, say, a down-at-the-heels paper-supply company like Dunder Mifflin may be every bit as productive as employees at the legendarily culture-rich Patagonia (which “fills [its] payroll with people who are passionate,” according to Workforce. com)? Actually, yes. A recent CEB study of 1,000 employees shows that “getting employees to be proud of the organization . . . versus just pretty much barely liking the company has exactly the same impact in performance terms,” Krausova notes in the post “Who Really Has the Biggest Impact on Employees’ Performance?” on CEB’s blog. “However,” she cautions, the ways in which “employees connect with their peers and their networks within the organization have a big impact on how they perform and support others within the organization.” Krausova says leadership that “enables employees to connect with others and encourages information sharing—and empowers decision making at lower levels—has 1.6 times the impact on employees’ performance compared [with] an ‘authentic, open, and inspiring’ [leadership style].” Is your charisma irrelevant? Not completely, but it may be far less important than your willingness to embrace Twitter and Facebook to engage people. According to a 2012 IBM study of 1,700 CEOs, the most critical leadership skill today is the fostering of employee collaboration. What’s more, notes Forbes.com contributor MARK FIDELMAN, “companies that outperform their peers are 30 percent more likely to identify openness—often characterized by a greater use of social media—as a key enabler of collaboration and innovation to influence their organization.” Although social networks can establish and strengthen the employee connections that result in greater productivity, only 16 percent of CEOs actively use them. The other 84 percent may have to join in soon. “Social media is becoming the ‘universal university’ that allows all of us to learn from each other through comments, feedback, and spirited dialogues . . . ,” write DAVID WILLIAMS and MARY MICHELLE SCOTT in the post “New Research on Why CEOs Should Use Social Media” for the HBR Blog Network. “The biggest rewards are available for companies whose commitment to social media comes from the top.”

In 2002, executive search firm Towers Perrin (now Towers Watson) found that employee “negative emotion” correlated to poor company performance. The firm also discovered that managers routinely misjudged the source of that negativity, assuming happiness hinged on people’s feelings toward management. Employees were far more influenced by feeling confident in their work, professional development opportunities, rewards and recognition, and connections to one another. (To learn more, search #ceocharisma.) SEE ALSO B.06

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Netﬂix as example: Spell out what you are, what you do, and whom you really compete with.

{LEADERSHIP}

Last summer we wrote about Netflix’s ill-fated decision to create a streaming video spin-off called Quickster, and noted that, to its credit, Netflix was quick to kill a bad idea. Many companies delay such decisions to their peril. Netflix is back, big-time (at press time its stock was trading nearly 500 percent above its post-Quickster low), and its rebound offers a different sort of business lesson. At the risk of elevating correlation to causation, we couldn’t help but be struck by the language CEO REED HASTINGS used in a recent letter to investors about the company’s long-term view:

We are commercial-free unlimited-viewing subscription TV. We don’t have pay-per-view and we don’t have advertisements. Those are ﬁne business models that other brands do well. We choose to be the best at our model, and to have our brand stand for commercial-free unlimited viewing [with a] low ﬂat monthly fee. “We don’t and can’t compete on breadth with Comcast, Sky, Amazon, Apple, Microsoft, Sony, or Google. For us to be hugely successful we have to be a focused passion brand. Starbucks, not 7-Eleven. Southwest, not United. HBO, not Dish. “We are not a generic ‘video’ company that streams all types of video such as news, user-generated [content], sports, music video, or reality. We are movies and TV shows.” Hastings goes on to specify Netflix’s competition by name. “The network that we think likely to be our biggest long-term competitor-for-content is HBO. . . . Behind HBO would come Amazon/Lovefilm/Prime, Hulu, Now TV, and many cable and broadcast networks in various territories.” The letter details exactly what Netflix is, and, perhaps most crucially, what it is not. Hastings also cites 10 reasons why streaming Internet TV remains ripe for growth, and describes how its rivalry with HBO may evolve. So why should you operate with this level of specificity? At the very least, it serves to reassure stakeholders. More important, it signifies that a company possesses a very real but often underappreciated asset: self-awareness.

A recent Bloomberg Businessweek cover story analyzed Reed’s efforts to restore the luster to Netﬂix. One key to its recent success has been an effort to continuously improve its algorithms and technology. The takeaway? Not only does Netﬂix know exactly what it provides, it’s also intensely focused on how to better provide it. (To learn more, search #builddisruption.) SEE ALSO B.05 C.04

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“Our initial go-to-market strategy was to look for companies [that] had had accounting scandals.”

{BUILD MEMBER PROFILE} THE BUSINESS: BlackLine Systems makes software that automates the process of reconciling balance sheets. Clients include AT&T, Boeing, Costco, and Southwest Airlines. EMPLOYEES: 165 ANNUAL SALES: $25 million Therese Tucker Age 51 Founder, CEO and Chairman BlackLine Systems Los Angeles, California

Photographs by Jörg Meyer

OTHER VITALS: Prior to founding BlackLine in 2001, Tucker was chief technology officer for SunGard Treasury Systems. She launched BlackLine with her personal savings and didn’t take a salary for ﬁve years. WHAT WAS IT LIKE TO GO FROM CTO AT SUNGARD TO FOUNDER OF A NEW COMPANY?

You mean to go from the Csuite in a very large organization to the queen of very little? Probably the biggest transition was that nobody cared! BlackLine took so long to get any momentum that just about everyone, including my family and board members—who would loan me money for payroll on occasion—didn’t think it would succeed. BLACKLINE REVENUES WERE UP BY MORE THAN 50 PERCENT YEAR OVER YEAR IN 2010, 2011, AND 2012, AND MAY EXCEED THAT PACE THIS YEAR. HOW DO YOU MATCH CAPACITY AND QUALITY TO SUCH GROWTH?

Hiring the right people goes a long way. Keeping the people you have is also key. When our customers call support, they are more than likely to get one of the same people [who] they’ve worked with for years. I

have one employee who started out as a client and asked to work for us. YOUR CLIENT BASE INCLUDES SOME VERY LARGE COMPANIES. WHAT HAVE YOU LEARNED ABOUT HOW TO APPROACH, CAPTURE, AND RETAIN BIG CLIENTS?

Large companies can have very long sales cycles, and they like to buy software that other large companies have bought, so getting some momentum in the large market can be difficult. Our initial go-to-market strategy was to look for companies [that] had had accounting scandals and really needed better controls. Large companies need to get many people involved to buy something, and they need budget for it. So, after you conduct your first round of demos for various company divisions, the project may go on hold for a year while they procure budget. Then they may have to run an RFP process, then you need to recompete for the project. If you’re lucky enough to be sort of selected, then you work with their procurement departments where they squeeze you on price. After that, legal gets involved. Sales cycles can kill you! IN ADDITION TO ITS HEADQUARTERS IN LOS ANGELES, BLACKLINE SYSTEMS

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NOW HAS OFFICES IN ATLANTA, CHICAGO, NEW YORK, LONDON, MELBOURNE, AND SYDNEY. WHAT HAVE YOU LEARNED ABOUT FOSTERING A SENSE OF UNITY COMPANYWIDE?

The second that someone is outside of headquarters, without visibility into what is happening, they start to think the worst: that no one cares about them, that no one is concerned with their issues, and so on. The only possible solution is to communicate a lot. Regular status meetings, newsletters, status emails to the company, kick-off meetings, and bringing people to corporate at least a couple of times a year are all necessary. AS ANYONE WHO HAS EVER STARTED A BUSINESS KNOWS ALL TOO WELL, WORK-LIFE BALANCE IS NO EASY FEAT. ANY ADVICE?

Balance might be overrated, but I achieve the balance I have by limiting what I focus on. It’s basically work and family. I have a pretty lame social life, don’t do a lot in the way of beauty treatments, and have little time for hobbies. It works for me, because I’m happy. I have a wonderful husband and two amazing kids who are just heading into adulthood. Yoga is one thing I’m pretty committed to doing, at least once or twice a week, and that serves as a pretty decent workout.

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No leader should underestimate the “gratitude effect.”

WEEK 1

WEEK 2

WEEK 1

WEEK 2

{MANAGING PEOPLE}

“Thank you” Group Group

The call volume achieved by the employees who were thanked shot up by about 50 percent, while the number of calls handled by the unacknowledged group remained relatively unchanged.

It’s often said that manners are the grease that lubricates society. Turns out they’re also a slick way to boost productivity. To benefit, you don’t even have to master the finer points of etiquette. All you have to do, according to academic researchers, is say “thank you.” For her book Sidetracked: Why Our Decisions Get Derailed and How We Can Stick to the Plan, Harvard associate professor FRANCESCA GINO conducted several experiments to determine the role that expressions of gratitude play in employee performance and collegial interaction. In one experiment, Gino studied a team of 41 call-center fundraisers, all of whom worked on a fixed salary. At the end of the first week, the supervisor personally thanked about half the group. The next week, the call volume achieved by the employees who were thanked shot up by about 50 percent, while the number of calls handled by the unacknowledged group remained relatively unchanged. In two other experiments, conducted with ADAM GRANT of the Wharton School, Gino considered the trickle-down effect that gratitude can have on the willingness of employees within an entire organization to help one another. As Harvard Gazette’s CHUCK LEDDY explains, “They first asked 57 students to give feedback to a ficti32% tious student, Eric, regarding his sloppy cover letter for 66% a job. Half were emailed a terse confirmation: ‘I received your feedback on my cover letter.’ The other half received Gratitude No-Gratitude gratitude: ‘I received your feedback on my cover letter. Group Group Thank you so much! I am really grateful.’” More than double the percentage of stuNext, “participants received a message from another dents in the gratitude group—66 percent— fictitious student, Steven, asking for feedback on his cover helped Steven, versus just 32 percent of letter. ‘Would participants who had received thanks from those in the no-gratitude contingent. Eric be more likely to help Steven?’ Indeed. More than double the percentage of students in the gratitude group—66 percent—helped Steven, versus just 32 percent of those in the no-gratitude contingent.” Gino says the scope of this “gratitude effect” was the most surprising aspect of her research. Why does expressing thanks have such impact? As she tells Leddy, “Receiving expressions of gratitude makes us feel a heightened sense of self-worth, and that in turn triggers other helpful behaviors toward both the person we are helping and other people, too.” Thank you for reading Build.

Grant, an organizational psychologist and the youngest tenured professor at the Wharton School, was featured in a March New York Times Magazine cover story about the value of helping others in the workplace—or, really, any place. The subject certainly applies to business leadership. “For Grant,” notes staff writer Susan Dominus, “helping is not the enemy of productivity, a time-sapping diversion from the actual work at hand; it is the mother lode, the motivator that spurs increased productivity and creativity.” (To learn more, search #buildfeedback.) SEE ALSO A.03

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PAPER because the cloud can put all your files at your fingertips, just so long as you have a printer.

Paper is an environmentally responsible way to share information sitting in the cloud with everyone sitting in the boardroom. Learn more at PAPERbecause.com.

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“Superfans” are brand ambassadors and lifetime-value paragons. Treat them like it.

{CUSTOMER RELATIONSHIP MANAGEMENT}

Imagine your iTunes library as a business analogy. Radiohead represents the experimental and sometimes head-scratching Google. U2 is the Nike-esque marketing powerhouse. The Beatles exemplify the game-changing Apple. OK, so who’s our rock ’n’ roll Zappos? That band who treats its fans like brothers? Pearl Jam. When it began back in 1991, Pearl Jam’s Ten Club was an ordinary fan group that sent newsletters and exclusive singles to card-carrying members. Now, two decades later, Ten Club is a strategic superfan operation with roughly 200,000 members. “The band now packs arenas for two, sometimes three, nights in a row, thanks to thousands of intensely dedicated fans who call themselves the Jamily and travel hundreds of miles to sing along with every word,” writes WHITNEY PASTOREK in Entertainment Weekly. “Pearl Jam has unexpectedly morphed into a modern Grateful Dead, and it just might be their saving grace.” Here are three guiding principles of Pearl Jam’s superfan strategy: 1

Invest in your superfans, and they’ll invest in you. For the vast majority of its live shows since 2000, Pearl Jam has reserved the best seats in the house for Ten Club members, who pay regular ticket prices in exclusive presale events. To keep up with demand, Pearl Jam developed an in-house digital ticketing system that’s integrated into its password-protected Ten Club site. Last year, Pearl Jam took it a step further by partnering with the third-party technology company Modlife on “a new membership-based ticket ‘lottery’ system” that prompted the fastest concert sell-out in the history of Wrigley Field.

Trust your superfans with your brand. Contests, giveaways, and reward systems are nothing new. But in 2012 Pearl Jam gave one of the Ten Club’s founders the ultimate thank-you: total control over the band’s set list. BRIAN FARIAS, who had seen Pearl Jam in concert 108 times, was ﬂown to Amsterdam to attend a few shows and meet the band. There, frontman Eddie Vedder invited Farias to choose the songs Pearl Jam played live. “Forty to 50 drafts later, Farias created a set list that many fans are calling ‘the greatest’ Pearl Jam has ever performed,” writes AYLIN ZAFAR in Time Magazine. “The band brought Farias out for a bow at the end of the show, an unbelievable moment for the superfan.”

Never act like a rock star. “The band leads by example,” TIM BIERMAN, manager of the Ten Club, tells Build. “Whether it’s a concert promoter, an usher at a show, or the fan in the back row, they are treated with respect. When you see that happening night after night, it becomes engrained in your day-to-day work. Respect for our fans is the guiding philosophy of Ten Club.”

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PHOTOGRAPH BY KERENSA WIGHT

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The Rolling Stones tested the loyalty of their most diehard fans when, a day before the launch of the 50 & Counting tour in early May, the band released 500 heavily discounted tickets to reportedly keep them out of brokers’ hands. The move, wrote a livid fan on Billboard.com, “ultimately punished those fans who purchased early. As someone who purchased at the $600 level on the day the tickets went on sale, this is beyond frustrating and shameful.” (To learn more, search #buildloyalty.) SEE ALSO A.01

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You can handle the truth. Here are ﬁve tips for making sure you get it.

{MANAGING YOURSELF}

“When I ask for feedback, it’s never constructive,” complains communications consultant STACEY HANKE on Twitter. “It’s always vague: ‘good job, nice work.’ What does it take to get thorough feedback?” The reason for this all-too-common dynamic, says author and speaker SCOTT BERKUN, is simple: “Feedback feels like confrontation to most people. They’ve learned many people are just fishing for praise when they ask for feedback so that’s what they provide.” To push past the niceties and get some news you can use, Berkun offers the following five tips. The first four have to do with how you ask, and the fifth has to do with how you listen.

Consider who you ask. “What coworker do you have a strong enough relationship with that they’ll take the risk? Seek them out on something small, push them to be honest, and then reward them.”

Take care how you ask. Ask a vague question and you’ll get a vague answer. Instead, Berkun suggests, make speciﬁc requests: “Does this design solve these three objectives?”

Plan when you ask. “If you want thoughtful feedback, give people the time to [comply].”

Decide where you ask. “You get different feedback in a meeting than you would over coffee or a beer after work.”

Pay attention to how you respond. Most people, Berkun says, handle feedback poorly. “If you really want feedback, you have to be prepared to shut up and listen. And say thank you.”

Hanke’s blog provides some excellent (and free) advice on workplace communication. Our favorite is a 2011 post on how leaders often undermine their own arguments at meetings by prefacing them with qualifying statements. Some to avoid: “I was wondering if we might consider . . .”; “I’m probably way off base here . . .”; “To be honest with you . . .”; “I’m going to tell you a story . . .”; and the classic “This might be a stupid idea, but. . . .” (To learn more, search #buildfeedback.) SEE ALSO A.12

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ILLUSTRATIONS BY TODD DETWILER

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Unproductive days happen. But you can take steps to change them. (Sometimes.)

{MANAGING YOURSELF}

Life would be so much better if you could just go back to bed on difficult days. Instead, you have to drink more coffee, grit your teeth, and face your responsibilities head-on. Muddling through the workday is never easy, but it might be easier if you follow this flow chart that AARON LYNN recently posted on AsianEfficiency.com. In it, Lynn identifies eight common causes of unproductive days. For seven of the eight, he offers a corresponding set of next steps: Some are short-term fixes; others are long-term. But the eighth one has no recourse. Lynn explains: “Sometimes, things happen that simply aren’t within our control—weather phenomena, our Internet connection goes down, a family emergency. We can try to put things in place to prevent these things from happening, but sometimes there really isn’t much we can do.” So, let’s say the reason for your unproductive day is what Lynn calls “depleted willpower.” The short-term fixes are “wait until tomorrow,” “break/nap,” and “nootropics,” which is a fancy word for legal drugs (coupled with the requisite disclaimer about checking with your doctor first). The long-term fixes are “energy management” (eating, sleeping, and exercising properly) and “downtime and renewal” (getting enough time off ). Granted, none of what he suggests is revolutionary. But it’s a helpful reminder that the reasons for having a bad day—at least the ones within our control—usually aren’t that complex. A short nap or a quick walk can go a long way toward making them bearable.

YOUR UNPRODUCTIVE DAY

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WHY?

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REASON

SHORT-TERM SOLUTION

POOR ENERGY

WAIT UNTIL TOMORROW

LONG-TERM SOLUTION

ENERGY MANAGEMENT DEPLETED WILLPOWER

SOLUTION SET #1

BREAK/NAP DOWNTIME & RENEWAL

BAD HEALTH

NOOTROPICS

SOLUTION SET #2

ALIGN STRENGTHS

MISALIGNMENT OF STRENGTHS

OUT OF MY CONTROL

CHANGE ENVIRONMENT SOLUTION SET #3

INTERRUPTION MANAGEMENT MOOD ANCHOR

INTERRUPTIONS

EMAIL MANAGEMENT SOLUTION SET #4

MULTITASKING

POMODORO/ SOLAR FLARE TASK MANAGEMENT

OVERWHELMED

CHANGE TASK

One of Lynn’s long-term ﬁxes for feeling “overwhelmed” is improving your email management. For a primer on how to reduce the stress of an overstuffed inbox, we suggest Preston Ni’s article in Psychology Today, “Too Many E-Mails? 7 Tips for Successful E-Mail Management.” Our favorite: “Answer your emails not individually, but in batches.” In other words, if you have coworkers who send many messages a day— related to subjects that are not time-sensitive—answer them only once. (To learn more, search #buildefficiency.) SEE ALSO B.01

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Good but not quite great? These three simple rules can propel your company into the ranks of the truly exceptional.

{LEADERSHIP}

Many best-selling business books claim to reveal the secrets of successful companies, the implication being that by imitating their approach to innovation or marketing or human capital your company can quickly boost performance. If only it were that simple. There are, in fact, lessons to be learned from successful companies, but they are far from obvious. A careful study of thousands of companies, however, has found three striking commonalities among companies that have consistently outperformed their peers over many years. Here they are:

1. Better Before Cheaper Top-performing companies are much more likely to compete on some measure of superiority versus low price.

2. Revenue Before Cost Margins matter, and even when high-performing companies lower prices to compete they still charge more than other companies.

3. There Are No Other Rules This is not a ﬂip observation, but a useful rule that can guide your decision-making.

How were those rules discovered? Deloitte’s MICHAEL E. RAYNOR and MUMTAZ AHMED analyzed the profitability, as measured by return on assets (ROA) of more than 25,000 companies that have traded on U.S. stock exchanges at any point between 1966 and 2010. They identified one group of exceptional companies as “Miracle Workers” (the 174 companies that consistently made the top 10 percent of the full population) and “Long Runners” (the 170 companies that were consistently in the top 20 percent to 40 percent). Having isolated the “best of the best,” the two set out to understand what set those companies apart. It was a daunting task, and for the first two years of their search they learned a lot more about what didn’t set them apart: neither the pursuit nor the shunning of M&A differentiA COLLABORATION WITH

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ated these top performers, nor did customer focus, nor risk-taking, nor innovation, nor any other specific behavior they looked at. It was only when Raynor and Ahmed shifted their focus, from what companies did to how they seemed to think, that they discovered what really mattered. Miracle workers, for example, were vastly more likely to compete on the strength of being better than their competition – whether through a great brand, strong functionality, appeal, style, durability, or some related quality. These high-flyers rarely competed on the basis of lower price. Not that price is irrelevant; rather, even when competition forced the Miracle Workers to lower prices, they continued to invest in order to earn the right to keep their prices higher than their rivals’ and continued to stress such features as product quality, service levels, or other strengths. As a result, margins remained higher. Use These Rules to Guide Decision-Making Senior executives can take heart from these findings. Running a company is not easy, and many things compete for executives’ attention, including decisions about a host of operational, financial, human capital and other issues. There are many paths to success, but Rules 1 and 2 point the way to those most likely to lead to exceptional profitability. The other variables that might define your particular journey are captured by Rule 3: many of the exceptional companies in this study made major changes in how they approached any number of factors that determine performance, yet remained consistently more aligned with the first two rules than their competition. In fact, “there is a tendency to say that the third rule is not really a rule,” Raynor says, “but it is: think of it as a prism through which you view your approaches to the first two rules.” Ahmed adds that, “We mined all the data available to us, looking for patterns. There were no obvious ones, which makes Rule 3 very important.” To lead your company into the ranks of the exceptional, then, begin by clarifying the organization’s competitive position and profitability formula. To do that well, study the interplay of all performance dimensions, versus focusing on one or a few metrics (such as product durability, R&D spending, etc.). Study the trade-offs among those many profitability drivers. Then allocate resources based on which initiatives will enhance the non-price elements of your position and allow you to charge higher prices or sell in greater volume. Invest in what separates you from the pack. “There is an important caveat,” Raynor says. “These rules only apply if you are in pursuit of exceptional performance. If you are on the brink of bankruptcy or facing some other challenge that makes a play for exceptional performance necessarily beyond your reach for now, these rules won’t help. But if you are pursuing excellence, these rules tell you which problems you really need to solve, and which battles are worth fighting.” The Three Rules: How Exceptional Companies Think (Por tfolio/Penguin) is available now in hardcover, e-reader, and audio formats.

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The “Eisenhower Matrix” helped a president decide what to work on and when. It can help you, too.

{MANAGING YOURSELF}

The “Eisenhower Matrix” has made a comeback. Why? Perhaps because “we often focus too strongly on [what’s] ‘urgent and important,’” writes Shane Parrish on the Farnam Street blog, and the matrix can help balance how we allocate our attention. How did Eisenhower himself assess urgency and importance? MARY BURTZLOFF, archivist at the Eisenhower Presidential Library and Museum in Abilene, Kansas, helped us sort through them:

IMPORTANT BUT NOT URGENT: In 1956, Eisenhower signed The Federal Aid Highway Act into law. The idea first gripped him back in 1919, when he took part in an arduous cross-country military convoy and saw firsthand the poor condition of U.S. roads.

URGENT AND IMPORTANT: In 1957, Eisenhower federalized the Arkansas National Guard and called in parts of the 101st Airborne Division to ensure the integration of an Arkansas high school after the governor defied Brown v. Board of Education.

NEITHER URGENT NOR IMPORTANT: Deciding URGENT BUT NOT IMPORTANT: In 1953, Eisenwhether to respond to notes from concerned citizens hower chose to break tradition and not wear a top often fell into this category. “Tens of thousands of lethat to his inauguration. “He had to make a decision ters came to the White House,” says Burtzloff. “The by the [inauguration] date, but it was a relatively staff responded to the vast majority.” inconsequential one,” says Burtzloff. N OT IMP O R TA N T

Stephen Covey fans no doubt recognize the Eisenhower Matrix not only from First Things First—where it was presented as a time management matrix—but also from The Seven Habits of Highly Effective People, wherein the third habit—“Put First Things First”— stresses both importance and urgency as key parameters in managing time. (To learn more, search #buildike.) SEE ALSO B.03 C.06

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PHOTOGRAPHS (CLOCKWISE FROM TOP LEFT) BY (1) CBS PHOTO ARCHIVE/ GETTY IMAGES; (2) JOSEPH SCHERSCHEL, TIME & LIFE PICTURES/ GETTY IMAGES; (3) GETTY IMAGES; (4) ED CLARK, TIME & LIFE PICTURES/ GETTY IMAGES

NOT URGENT

IMP O RTA N T

URGENT

Former president Dwight Eisenhower lent his wisdom—and what today we’d call his “brand”—to the all-important tasks of decision-making and time management. Using the Eisenhower Matrix, pictured here, you can evaluate every time-management decision based on two elementary questions: (1) How important is it? (2) How urgent is it?

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Sure, they follow you on Facebook and Twitter—but they don’t want customer service there.

{SOCIAL MEDIA}

You’ve heard the stories: A customer tweets a complaint about a product and the company responds instantly—and publicly—to set things right. Ah, the power of social media, right? Maybe not. “There is actually no proof [that] customers want to [access customer service] through social media; it’s just that existing channels suck.” That’s the finding of customer-interaction monitoring firm [24]7, as relayed by CEO PV KANNAN to ZDNet. That view is in line with data released earlier this year by Twitter itself in which customer service ranked dead last among the reasons consumers follow brands. In an article on the Marketing Pilgrim blog, social media consultant CYNTHIA BORIS sums up the problem with social customer service: “[Companies] say they do it because it benefits their customers, but to me it always feels like a PR moment. HandyDandy tweets that his cable is out. The cable company responds moments later, saying they’re actively working on the problem, and the whole world can see the exchange.” As Boris notes, the standard response via social media—indeed, the only viable response in most cases—is “we’ll look into it.” To actually refund your money, track your package, fix your outage, or solve some other problem, companies need far more information from you than you should share publicly, so communication has to move to a private channel. Customer service is an investment that growing businesses are often loath to make, even though two-thirds of U.S. consumers say they would spend more with a company that they believe provides excellent customer service, according to a 2012 report by Echo for American Express. Kannan suggests perfecting your customer-service basics first before trying to supplement them with social media. That means establishing efficient and effective online portals and call centers—exactly the kinds of expenditures you probably hoped social media would render unnecessary. But customer service on any platform is an investment of time and effort. Just ask Charter, the fourth-largest cable operator in the United States, which no longer addresses customer-service issues over social media. A Wegmans grocery store in Northborough, Massachusetts, shut down its local Facebook page because staff felt stretched too thin to respond to customer-service inquiries from its 8,000 fans. When you consider that consumers may turn to social media for customer-service help only as a last resort, directing your customer-service efforts elsewhere may be the wiser bet.

Twitter users may not be following brands in search of customer service, but they do see social media as a great way to get other beneﬁts from companies. Marketers, take heed: Twitter’s survey found that the top two reasons that people do follow brands are “to receive discounts and promotions” and “to get updates on upcoming sales.” (To learn more, search #buildservice.) SEE ALSO A.01

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67% Two-thirds of U.S. consumers say they would spend more with a company that they believe provides excellent customer service.

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{PRESENTATIONS}

“DESIGNING A PRESENTATION WITHOUT AN AUDIENCE IN MIND IS LIKE WRITING A LOVE LETTER AND ADDRESSING IT, ‘TO WHOM IT MAY CONCERN.’” —KEN HAEMER, former presentation research manager at AT&T. If you haven’t read Haemer’s dictum before, then you haven’t spent much time browsing the advice of presentation gurus on the Web. It bears repeating here because perhaps the most prominent of those experts, NANCY DUARTE, says that few speakers actually take his advice to heart.

PHOTOGRAPH BY D. SHARON PRUITT/ GETTY IMAGES

THE CEO

Duarte’s work is revelatory. See her book HBR Guide to Persuasive Presentations, for a primer, or check out Bob Adams’s blog, 27gen.com, for a cheat sheet (he outlines each of Duarte’s seven chapters). Even the simplest admonitions are valuable. For instance: “Segment the audience—focus on who matters most.” (To learn more, search #buildaudience.) SEE ALSO B.09

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THE CEO

A root cause of bad web pages? Bad user-experience design. Improve it by answering these questions.

{USER EXPERIENCE}

Companies create too many web pages. And even on the pages that deserve to be created, they make too many design mistakes. As a result, a user’s experience on most corporate websites is difficult at best, annoying at worst. The trouble starts at the beginning, say user-experience design pros. Too often, web teams fail to forge clear answers to simple—but not always easy—questions: Who is this page for? How do we know they need it? During a recent visit to HubSpot’s headquarters, members of the Build team spotted a set of such guideline questions on a whiteboard near the desk of user-experience director JOSHUA PORTER. “Good UX Questions” was the heading. These six essential queries, which stress functionality over bells and whistles, shouldn’t go unanswered during the web design process. We’ve reproduced them here, and we’ve asked UX thinkers at CareerBuilder, Yahoo, and Harvard University to augment them. THE SIX BUILDING-BLOCK UX QUESTIONS:

1 Who is this page for? JOSHUA PORTER

2 What problem does this page solve for the user? 3 How do we know they need it? 4 What is the primary action we want users to take on this page?

user-experience director, HubSpot

5 What might prompt the user to take this action? 6 How will we know this page is doing what we want it to do? SIX MORE UX QUESTIONS WORTH ASKING: CLIFF SEXTON

1 How do people access this page (where do they come from)? 2 How long are users on this page? 3 What can we remove from this page?

user-experience director, CareerBuilder.com

4 How can we test this solution with users? 5 How are we solving the user’s need in different and better ways than other pages

on our site? 6 What’s the governance and maintenance model for this page? (In other words,

once the baby is born, who’s responsible for its care and feeding?) PERRY HEWITT chief digital officer, Harvard University

Famously, Apple understood the whole user-experience thing even before it had users. Walter Isaacson reported in his biography Steve Jobs that “[Mike] Markkula, [Apple’s second CEO], wrote his principles in a one-page paper titled ‘The Apple Marketing Philosophy’ that stressed three points. The ﬁrst was empathy, an intimate connection with the feelings of the customer: ‘We will truly understand their needs better than any other company.’” (To learn more, search #buildUX.) SEE ALSO A.02

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CATALINA NARANJOBOCK user-experience design researcher, Yahoo

WHATâ&#x20AC;&#x2122;S NEXT

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What comes next for your business, for your team, for your industry, and for you? What trends are transforming the competitive landscape? How could you be blindsided? What innovations will you lead? Copy? Ignore? How can you see whatâ&#x20AC;&#x2122;s coming before everyone else does?

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HOW THIS SECTION BREAKS DOWN:

13% Marketing C.08 / C.13

27%

Innovation

Data Security

C.01 / C.07 / C.09 / C.15

C.03

20% Business Models

13%

C.02 / C.05 / C.14

Customer-centricity C.04 / C.11

20% Thinking C.06 / C.10 / C.12

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WHAT’S NEXT

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Overnight successes are misleading. New products take far longer to take off than most managers think.

{INNOVATION}

Japan: 5.4 years

U.S.: 6.2 years

Germany: 7.1 years

South Korea: 7.2 years

India: 12.4 years

Your new product or service may need longer than you think to take off after launch, especially if it really is a new product or service. Just how long? A chart featured in the 2013 book Unrelenting Innovation: How to Build a Culture for Market Dominance tells the tale. Its author, GERARD J. TELLIS, a professor at the University of Southern California’s Marshall School of Business, has studied global takeoffs extensively. He defines “takeoff” as 2 percent market penetration. And guess what? To achieve even a mere 2 percent market penetration, it typically takes more than ﬁve years. The chart breaks it down: In Japan, the mean time to takeoff is 5.4 years. In the United States, it’s 6.2 years. In China, it’s 13.9 years. (Among the 31 nations charted, Japan is fastest; China is slowest. Others: Germany, 7.1; South Korea, 7.2; India, 12.4.) OK. So why, in reading these numbers and knowing that they’re backed by academic research, do Tellis’s reported times to takeoff still seem so . . . long? One reason is that our thinking is biased by our general knowledge as consumers; we instinctively think of takeoffs in terms of specific products, such as an iPhone or a Kindle. From Tellis’s perspective, this is the wrong way to look at it. “If an analyst focuses on the successful, individual brand that takes off rapidly, then he or she wrongly assigns too short a period of takeoff and wrongly raises the threshold for future products,” Tellis writes in the book. “So it’s best to research all the prior brands that were launched in the category.” The examples he gives are familiar: MP3 players existed for years before the iPod; e-readers existed for years before the Kindle and iPad. In reality, it is extremely difficult for any new product to take hold. As JOAN SCHNEIDER and JULIE HALL of Schneider Associates, a firm that specializes in launches, point out in Harvard Business Review: “The consultant Jack Trout has found that American families, on average, repeatedly buy the same 150 items, which constitute as much as 85 percent of their household needs; it’s hard to get something new on the radar. Even P&G routinely whiffs with product rollouts. Less than 3 percent of new consumer packaged goods exceed ﬁrst-year sales of $50 million—considered the benchmark of a highly successful launch.” These numbers alone may explain why our expectations are skewed. So few new products crack the radar, that when they do, we remember them. And apparently—and wrongly—we remember them as “overnight successes.”

China: 13.9 years

Schneider and Hall’s Harvard Business Review article includes an amusing sidebar about new-product failures. “These products, launched ‘successfully’ from 2002 to 2008, disappeared within two years,” they report. The list includes: Coca-Cola C2, Colgate Simply White, Hershey’s Swoops, M&M’s Mega Chocolate Candies, Oral-B Brush-Ups, Pepsi Blue, and Pepsi Edge. (To learn more, search #productadoption.) SEE ALSO A.08

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To avoid being disrupted, focus on the supply side of the supply-and-demand equation.

{BUSINESS MODELS}

Any kid with a lemonade stand grasps supply and demand, but probably doesn’t spend much time thinking in terms of “disruption” or “business model innovation” (unless the operation is to fund B-school tuition). But there is a strong connection between the basic concept of supply and demand and the more elaborate constructions that B-school grads love. Consider a recent post on TheNextWeb. com. SANGEET PAUL CHOUDARY, author of the upcoming book Platform Thinking: New Rules of Business for the Networked Age, used the very friendly term “supply” to frame a useful insight on the often complex notion of disruption. Choudary explains why Airbnb, an online marketplace that allows people to rent space in their homes to travelers, has been able to disrupt the hotel market by challenging the incumbents’ traditional source of supply (i.e., rooms). Airbnb enables “anyone with a spare room, apartment, or island to start running a [bed-and-breakfast] with access to a global market of travelers.” Choudary believes that Airbnb is not a one-off in this regard, but fits into part of a supplychallenging pattern, along with oDesk, Reddit, and YouTube. What do these companies do differently? Here’s Choudary’s take: 1

They create new sources of supply. No one previously imagined an inventory of travel accommodations composed of urban households with spare rooms. Likewise, the idea that a global audience would ﬁnd amateur videos (as is often the case on YouTube) immensely appealing would have been scoffed at years ago.

These new sources of supply tend to be inferior to and less sophisticated than previously existing ones. As the case study of Airbnb suggests, the average listing initially doesn’t compare to established hotels in service quality and targets a price-conscious traveler. The same dynamic applies when comparing YouTube with traditional broadcast media.

Over time, the supply on these platforms evolves to compete directly with mainstream competitors. As the platform ﬁnds greater adoption among consumers, it attracts mainstream producers as well. As a result, the production quality improves as the platform gains consumer traction.

What does this mean for you? If you’re a midmarket exec, think about what your company supplies. Remember that your future challengers are thinking about cheaper, off-the-radar ways to supply the same thing. Consider the long-term vulnerabilities in what you supply. How might a new business capitalize on those? What can you do to remain nimble and competitive if suddenly your customers can go elsewhere—and pay less—for what you supply? A larger company could make an acquisition. A midsize company might do the same or may need to respond in some other way.

“See it coming” is the ﬁrst of four steps you can take to be on guard for disruption, according to Accenture’s Larry Downes and Paul F. Nunes, authors of the article “Big-Bang Disruption” in the March issue of Harvard Business Review. The next three steps: Slow the disruptive innovation long enough to trump it; get closer to the exits and be ready for a fast escape; and try a new kind of diversiﬁcation. (To learn more, search #disruptionstrategies.) SEE ALSO C.04

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PHOTOGRAPH BY ERIC KULIN

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Firewalls and software patches won’t stop today’s hackers. To protect your company’s assets, make computer security a priority for the entire organization.

{CYBER-THREATS}

$250 BILLION One security ﬁrm estimates that IP theft alone costs U.S. companies $250 billion a year.

A detective hacks into the email accounts of coworkers; an Algerian national sells a computer virus known as SpyEye to multiple parties in the United States; a Texas man conspires to manipulate stock prices via a network of virus-controlled computers. Those are just some of the cyber-crimes that made headlines during a mere three weeks in May, offering more proof that computer crime is as rampant as it is varied. That is particularly worrisome for midsized companies, because often they are large enough to be attractive targets yet lack the resources to mount state-of-the-art defenses against cyber-threats. Companies can help themselves enormously, however, by rethinking their approach to computer security. “Because any breach could potentially have an impact on every part of the company’s cyber ecosystem,” says Lou DeSorbo, senior manager in the Cyber Threat Management Practice at Deloitte & Touche, “security needs to be addressed from an enterprise perspective, as part of an overall risk management program.” In fact, DeSorbo suggests that responsibility for cyber-security not rest with the CIO— or, at least, not solely. “There is no such thing as ‘perfect’ security,” he says. “Every company will need to determine its appetite for accepting cyber risk just as it does in other areas of the business. Deciding which cyber risks you must mitigate and which you might accept requires a combination of people, processes and technology that goes beyond the domain of IT.” Increasingly, infiltrations by actors DeSorbo terms “advanced persistent threats” are focusing their efforts on “maintaining a foothold with increasingly long dwell times,” resulting in extended access to, and theft of, information. These crimes can be both costly and difficult to detect. Standard security approaches tend to be technology-focused, relying on a mix of access controls, security patches, hardened firewalls, and after-the-fact identification of attacks. Today what’s needed is a mix of proactive defensive capabilities as well as forensic and analytic techniques that help companies protect specific assets, identify likely adversaries, detect and isolate events when they do occur, and respond effectively to mitigate risk and enable the business. This will impact a company on many dimensions, making it imperative that all senior executives participate in the cyber risk management process. As for whether your company may be at risk, as DeSorbo notes, “If your systems contain information that is valuable to you, then it is also very likely to be valuable to someone else.” Companies increasingly connect to partners, customers, mobile workers, and cloud-based service providers. As Internet-connected devices proliferate thanks to the boom in biometrics, nanotechnologies, and other sensor-based objects, potential vulnerabilities will multiply. Senior management should assess the level of cyber-security expertise within the company and identify gaps, develop a framework and repeatable processes to evaluate risks as they evolve, and make sure supply-chain partners or other parties with access to the company’s systems do the same. A COLLABORATION WITH

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Reﬁne your value proposition by understanding three key things about your customers.

{STRATEGY}

What do your customers really want—and how can you better deliver it? Business model expert and Strategyzer.com cofounder ALEX OSTERWALDER has created a tool to help you find out. The Value Proposition Canvas “allows you to sketch a profile of how your products and services will create value for a specific customer,” he writes in the Wall Street Journal. “Once you’ve made these clear, you can test them.” Osterwalder provides a three-step approach to using the tool, which aims to help you “avoid making stuff nobody wants.” (Tip: In a follow-up interview with Build, Osterwalder urged template users to write in pencil and to collaborate, because this yields more strategic conversations than typing and working individually do.) Each step corresponds to one-third of the canvas: Pains. “Second, describe all the pains you be-

2 lieve your customers might have or might fear Pains

Customer Job(s). “First,

1 you want to outline what

jobs you believe your (potential) customers are trying to get done that lead them to purchase your products and services,” he writes. Deﬁne “jobs” broadly, to address functional, social and emotional customer needs.

Customer Job(s)

related to those jobs—negative emotions, undesired costs or risks.” Here, Osterwalder’s questions help you to specify a long list of potential problems, and assess how and why current solutions are underperforming.

Value Proposition Canvas

Gains

Gains. Third, describe all the gains you believe your customer expects or desires as an outcome of that job.” Osterwalder’s cues for “gains” are also category-speciﬁc: Which savings would make customers happy? What outcomes do they expect, and what would exceed those expectations? How do current solutions delight them?

Answering these questions is just the start of your quest to understand customers’ needs. The goal is to learn “which core beliefs you need to test with customers,” Osterwalder says. The most important part of the Value Proposition Canvas may very well be its iterative nature. The first time you ask yourselves these questions should not be the only time. In other words: Ask the questions. Fill out the canvas. Test your answers with your customers. Then repeat the process—in pencil, every six months.

“Charles Lazarus was inspired by the supermarket when he founded Toys R Us,” note Giovanni Gavetti and Jan W. Rivkin, authors of “How Strategists Really Think: Tapping the Power of Analogy.” The 2005 article in Harvard Business Review cites several examples that “display the core elements of analogical reasoning: a novel problem or a new opportunity, a speciﬁc prior context that managers deem to be [essentially] similar, and a solution that managers can transfer to [a new setting].” (To learn more, search #valueprop.) SEE ALSO B.06 C.02

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“The big-picture guy always lurked within me. Now I get to let him out.”

{BUILD MEMBER PROFILE}

Josh Pickus

THE BUSINESS: Support.com (NASDAQ: SPRT) helps clients develop new technology services for their customers, such as wireless network setup, server monitoring and maintenance, and more. The company recently shifted its focus from marketing directly to consumers to selling its services through channel partners, such as Comcast and OfficeMax.

Age 52

EMPLOYEES: 159

President and CEO

ANNUAL SALES: $72 million

Support.com Redwood City, California

OTHER VITALS: Pickus joined Support.com as president and chief executive officer in 2006. Prior to that, he held senior positions at Computer Associates and Niku. Earlier in his career, he was a general partner at a venture capital ﬁrm and a partner at two law ﬁrms. He holds a B.A. from Princeton and a J.D., from the University of Chicago. YOU HAVE A LAW DEGREE, AND YOU’VE SERVED AS A CFO. HOW DO THESE SPECIALIZED BACKGROUNDS INFLUENCE HOW YOU DEAL WITH THE BIG PICTURE AS A CEO?

Photographs by Jörg Meyer

Legal work—at least good legal work—is all about relentlessly rational analysis, and CEOs have to do a lot of that when faced with competing priorities. It also eliminates anxiety about dealing with complex contracts. The CFO piece helps because it makes me comfortable with numbers and with the SEC regulations that stupefy and terrify CEOs from more traditional sales backgrounds. The big-picture guy always lurked within; now I get to let him out.

AS PART OF YOUR RECENT TURNAROUND—DURING WHICH THE COMPANY ACHIEVED ITS FIRST PROFITABLE QUARTER IN MORE THAN FIVE YEARS— YOU HAD TO MAKE SOME TOUGH DECISIONS ABOUT CONTROLLING COSTS. HOW DID YOU APPROACH THAT?

We could have cut our way to profitability faster, but [it would have been] at the expense of building the foundation for creating a larger business. We invested in areas that would grow revenue and closely tracked metrics regarding what will ultimately deliver long-term profitability.

are doing is allowing them to move to something they can really succeed at. DURING THE COURSE OF THE TRANSITION, DID YOU EVER CONSIDER TAKING THE COMPANY PRIVATE?

We considered it, but the market was moving so fast that I didn’t want to take a year to execute a financial transaction when I could be building the business. WHAT’S THE ONE WEAKNESS YOU TRY HARDEST TO DISGUISE?

A soft heart. WHAT COMPANIES DO YOU WISH YOU

IN THE COURSE OF TRANSITIONING TO A NEW BUSINESS MODEL, HOW MANY EMPLOYEES DID YOU HAVE TO LET GO?

At senior levels we had to do a pretty complete overhaul, outside of engineering. HOW DO YOU HANDLE THE CONVERSATION WHEN YOU HAVE TO LET SOMEONE GO, ESPECIALLY EMPLOYEES WHO’VE BEEN IN THE TRENCHES WITH YOU FOR SOME TIME.

Think not just about the person you are letting go but the whole company—and how you fail others if you let people who are ill-suited to their jobs stay there. Know that most people understand when they’re not doing their jobs well and want very much to be in a position where they can, so at some level what you

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COULD GET INSIDE AND LEARN FROM?

Four Seasons Hotels, Amazon, and FedEx, because they all deliver a spectacular customer experience. WHAT LEADER, LIVING OR DEAD, DO YOU WISH YOU COULD HAVE A BEER WITH?

Nelson Mandela, for his courage and his compassion. WRITE THE HEADLINE FOR YOUR OBITUARY.

Josh put a dent in the world while making family matter.

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{DATA-DRIVEN MANAGEMENT}

“I don’t want real-time data, I want right-time data. Let’s understand the speed of decision making in our company. If we make real-time decisions, let’s get real-time data. If we make decisions over two days, let’s go with that data cycle.”

PHOTOGRAPH BY GANDEE VASAN/ GETTY IMAGES

—AVINASH KAUSHIK, Google’s digital marketing evangelist, on his Occam’s Razor blog, in a post about “eight silly myths marketing people believe that get them ﬁred.” He argues that real-time data is usually hazardous in two ways: It wastefully eats up both money and management time. Right-time data, on the other hand, is delivered only when it’s needed for decision making—which often makes it far slower than real-time, far cheaper technologically, and far less distracting for managers.

Why name a blog after a guy who died almost 700 years ago? William of Ockham suggested that a good way to choose between two competing hypotheses was to shave away unnecessary assumptions, or cut through similar conclusions. Put another way, simpler explanations are preferrable to more complex ones, other things being equal. You might say that in our time we have boiled this concept down to its most economical form: “Keep it simple, stupid.” That’s always good advice. (To learn more, search #buildinnovation.) SEE ALSO B.03 B.13

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Today’s landscape looks different from ever before We’re living longer, working longer, and saving less But even though the future may be tough to predict Preparing for it can be simple

As demographic, economic and political landscapes shift, it has become increasingly important to prepare for the unexpected. Financial protection benefits like disability, critical illness, and accident coverage can offer crucial support when people are ill or injured and need it most. These benefits are never more valuable than during times of uncertainty. These are better benefits at work. To learn more about the importance of financial protection benefits, visit unum.com/future. D I S A B I L I T Y ° L I F E ° ACC I D E N T ° C R I T I C A L I L L N E SS © 2012 Unum Group. All rights reserved. Unum is a registered trademark and marketing brand of Unum Group and its insuring subsidiaries. Insurance products are underwritten by the subsidiaries of Unum Group. NS12-115

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25 percent of innovation projects fail because people are trying to solve the wrong problems. These rules can change that.

{INNOVATION}

The quote opposite is from ALBERT EINSTEIN (as if we needed to tell you). When we came across those words recently, they reminded us of the follow-on observation by inventor DARRELL MANN, now CTO of consulting agency Blackswan, who studied innovation duds and dynamos for 15 years as an engineer at Rolls-Royce and discovered that “25 percent of failures were due to people trying to solve the wrong problems.” A scant 2 percent of all companies’ innovation attempts end in success, he goes on to tell JOHN KENNEDY of Silicon Republic. How do these successes differ from the vast majority of failures? “They [follow] a certain path and rules,” Mann explains, which begins with the presumptions that innovation is problemsolving, problem-solving is innovation, and defining a problem clearly and completely represents 90 percent of the difficulty in innovation. Mann details his approach with copious charts and graphs in the book Hands on Systematic Innovation: For Business and Management. He also uses systematic innovation to drive product-development strategies for clients ranging from Intel and Hewlett-Packard to Nestlé and Procter & Gamble. Here, we distill the approach into four steps: 1 Be an Einstein. Invest time, money, and brainpower in boiling down your problem to its root cause before proposing even one solution. Mann once worked for six weeks with a helicopter-engine manufacturer to define the problems its engineering team needed to solve. The outcome? “Improvement by a factor of 50 in terms of engine life and reduction in maintenance scheduling,” notes the Blackswan website. That sounds like innovation to us. 2 Find comparables. What other industries have faced a core challenge similar to yours? Make a list of three problems (and be creative). 3 Name the winners. OK, so who devised and delivered the best solution to each of those industry problems you identified in No. 2? What companies cracked the code in a world-class way? Name them and their winning products. Blackswan recalls a client that makes compressors for household refrigerators. The company studied a database of 3 million successful innovations across myriad industries to come up with practical ideas for its niche. 4 Steal the solution. Now for the hard part: Apply the winning principles of those worldclass solutions to your situation. The fix should evolve and morph to meet your circumstances, but its core promise should remain largely the same. “You need to break down the silo walls,” Mann tells Silicon Republic, “and recognize the customer is trying to get a job done.”

Not everyone agrees that deﬁning problems is the key to sustainable innovation. A 2006 Gallup study of 1,010 professionals found the highest levels of innovation at companies that emphasize two core competencies: developing employee strengths through ongoing training and education, and encouraging the sharing of new ideas that “defy conventional wisdom,” which fuels engagement. (To learn more, search #systematicinnovation.) SEE ALSO A.08

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“If I had an hour to solve a problem, I’d spend 55 minutes thinking about the problem and five minutes thinking about solutions.”

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There are customers. There are loyal customers. And then there are “superfans.”

{MARKETING}

Fiat has 733,000 Facebook “likes.” SpongeBob has 43.6 million. Even Spam has 334,000. What do all those endorsements amount to? Not a whole lot, assert KEVIN CLANCY and ERIC PAQUETTE of Copernicus, a marketing and consulting firm. You see, your company’s Facebook universe is largely composed of “regular customers” and “loyalists”—two groups of people who don’t feel particularly compelled to talk about your brand. Only 5 to 10 percent of those “likes” belong to “superfans,” the emotionally attached minority who will evangelize your offerings to family, friends, and anyone else who’ll listen. How can you capitalize on superfan passion? Clancy and Paquette offer a plan in the e-book Measuring and Motivating Brand Advocates: The State of the Science. Here’s a summary:

1. Track down your superfans—and invite them in. Create a list of users who’ve pinned your product to Pinterest, penned an Amazon review, or otherwise promoted your wares. Create a private Facebook group or another exclusive forum where they can interact more closely with your organization.

2. Dig into their drivers. Take a brand history survey that asks how your advocates found the company, what made them try it, and what problem it solves for them. “Once marketers have determined [a] set of four to 10 measures of passion that best predict advocacy behaviors,” Clancy and Paquette note, “they can use them to identify advocates.”

3. Estimate their value—and work with them. According to Forrester Research, every Twitter or Facebook post reaches a minimum of 150 people. Learn how many followers or friends your advocates have, estimate their reach, and set conversion goals. Ask your superfans what incentives and offers would be most meaningful—and begin testing, testing, testing.

If superfans are so great, why not encourage more of them? In the SocialMediaExaminer.com article “9 Facebook Marketing Strategies to Build Superfans,” consultant Amy Porterﬁeld spells out how to do just that. (To learn more, search #superfans.)

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Want impact from your innovation efforts? Stop generating ideas and start developing the ones you already have.

{INNOVATION}

What’s one of the most common mistakes companies make when they attempt to ramp up their innovation game? “The No. 1 mistake is a lack of understanding about what innovation actually is,” says SCOTT ANTHONY, managing partner of the strategy and innovation consulting firm Innosight in an interview with EVODIO KALTENECKER on the Innovation Excellence blog. “I define innovation as ‘something different that has impact.’ Note the definition doesn’t have the word ‘new’ in it. Innovation is different from invention or the creativity that precedes it. “Sometimes the best way to innovate isn’t to invent but to reapply an idea that has been proven in another industry or market context. Note too the last word: impact. Many companies perceive that improving their innovation success rate is all about coming up with the right ideas. They bring in creativity consultants, run idea hunts, hold brainstorming meetings, and create teams to license technologies from universities. These aren’t bad things to do, but remember the old line from Edison: ‘Genius is 1 percent inspiration, and 99 percent perspiration.’ “Most companies are swimming in ideas. Those ideas might be locked up in their employees heads or might have been shelved in the past because they were before their time, but they are there. The big problem isn’t generating ideas. It is translating those ideas into impact. . . . So, instead of trying to generate more ideas that will sit on a shelf or will get under-resourced and struggle, pick a few ideas that seem promising enough, put reasonable resources on them, and get busy attempting to grow them. Odds are that each of those ideas is wrong in some material way, but you only can learn that through experience. As one-time boxer and sometime actor MIKE TYSON notes, ‘Everybody has a plan until they get punched in the face.’ Take your punches and see what happens.” PHOTOGRAPH BY FOCUS ON SPORT/GETTY IMAGES

As Anthony points out, the problem isn’t generating ideas—it’s translating those ideas into impact. But how do businesses decide which ideas to focus their energies on? For some guidance, we recommend the MIT Sloan Management Review article “Is Your Company Choosing the Best Innovation Ideas?” In it, author Markus Reitzig outlines how managers can construct the best “innovation funnel” for their organizations, depending on variables like company size and amount of hierarchy. (To learn more, search #buildinnovation.) SEE ALSO A.08

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“Everybody has a plan until they get punched in the face.“ –Mike Tyson

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Put pen to paper and you instantly begin to understand why paper remains so prominent in the “paperless” office.

According to marketing ﬁrm Epsilon Targeting’s 2011 Consumer Channel Preference Study of nearly 5,000 North American consumers, 50% of U.S. consumers prefer direct mail to email.

The concept of the “paperless office” can be traced back decades, to the Xerox Palo Alto Research Center (PARC), which pioneered a huge number of information-age innovations, from the computer mouse to the graphical user interface (not to mention the laser printer). In 1975, GEORGE PAKE, the head of PARC, predicted that by 1995 he would be able to “call up documents from my files on [a desktop] screen, or by pressing a button I can get my mail or any messages. I don’t know how much hard copy I’ll want in this world.” Much of Pake’s vision has come to pass. But as for how much hard copy one might want, it appears that people still want a lot. Even a bevy of technological advances that would have dazzled Pake have not changed the fact that people continue to prefer paper for a large number of both personal and work-related uses. In fact, a substantial body of research finds that our brains may actually be hard-wired to respond more effectively to information printed on paper. You’re still reading, right? A study conducted by Winona State University psychologists found that college students who use laptops in class spend nearly one-fourth of a 75-minute class “multitasking” (some of those tasks may have related to the course, but probably not all). The more the students used their laptops, the lower their performance. Distraction isn’t the only issue. Apparently, people don’t apply as much mental effort to reading on a screen as they do to the printed page. San Jose State University researchers found that when people read on screens they tend to skim and browse rather than focus on the text. Websites are designed, in fact, to (depending on your point of view) either cater to this tendency or cause it, by limiting most text to bite-sized chunks and bulleted lists, inevitably sacrificing depth. A study conducted by web usability expert JAKOB NIELSEN found that a website visitor will read, at the most, 28 percent of the words on a typical web page; 20% is more typical. “Scanning” is the term that Nielsen uses to describe how the material on a webpage is read. Or should we say, “read”? According to marketing firm Epsilon Targeting’s 2011 Consumer Channel Preference Study of nearly 5,000 North American consumers, 50 percent of U.S. consumers prefer direct mail to email; the preference for direct mail even extends to the 18- to 34-year-old demographic. A separate survey of marketers found that they regard direct mail as the most effective means of both acquiring and retaining customers—with nearly three times as many saying that print-based communication delivers the best ROI compared with social media.

A COLLABORATION WITH

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{COMMUNICATION }

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A CHANCE TO MAKE YOUR MARK(S) When one considers that 2 million computer printers a week are sold around the world, “paperlessness” appears to be a long way of f. It’s not simply that old habits die hard. Take this quiz to find out what we mean. 1 Compared with paper, the average person’s reading speed when using a tablet or ereader:

a. Increases ~10% b. Increases ~5% c. Is about the same d. Decreases ~5% e. Decreases ~10%

a. 35% b. 45% c. 55% d. 65% 6 That rate equals how much per every person in the U.S.?

3 minutes 6 minutes 18 minutes 30 minutes

3 The number of business cards printed in the U.S. each day is:

a. 4 million b. 12 million c. 28 million d. 41 million 4 Percentage of consumers who have opted out of paper statements from their banks and other billers is:

a. 75 pounds b. 150 pounds c. 225 pounds d. 330 pounds 7 The difference between the number of trees planted each year and those harvested or otherwise lost results in:

a. A net loss of 0.5% b. Neither a loss nor a gain c. A net gain of 20% d. A net gain of 45%

Answers: 1- E; 2- B; 3- C; 4- A; 5 - D; 6 - D; 7- D

2 You can reduce stress by 68% if you read a physical book for:

a. About b. About c. About d. About

5 The U.S. currently has a paper recycling rate of approximately:

a. 14% b. 26% c. 34% d. 41%

This ar ticle is excerpted from “The Not-So - Paperles s O f fice,” a White Paper produced by Domtar Paper in conjunction with The Build Network. To learn more about the topic s addres sed here, visit w w w.paperbecause.com.

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Customers expect price increases. You still need to inform them the right way.

{PRICING}

Maybe it’s inflation, or rising commodity prices, or simply an effort to crawl out of survival mode and boost your margins. For whatever reason—and we’re sure it’s a damn good one—you have to raise your prices. And you have to tell your customers. Just don’t tell them everything. That’s the advice of best-selling author GRANT CARDONE. In an Entrepreneur.com article, he says customers will accept price increases, but they don’t want to hear a lot of self-justifying blabber that can sound like excuse-making. Instead, use these rules to frame your explanation:

1. Tell them what they stand to gain. “Explain the reasons that [the increase will] benefit the customer: added content, additional service, or support,” Cardone writes. “It could be something new or something you haven’t been telling your clients you do for them.”

2. Play favorites. In an Inc. magazine column, sales consultant TOM SEARCY suggests that it’s important to let your biggest clients and customers know about the increase early to soften the blow. “It’s a mistake to let them get the news through an e-mail or a salesperson,” Searcy writes.

3. Be ﬂexible. “No one likes being cornered with a ‘take it or leave it’ ultimatum,” Mohammed writes. “A price increase is more palatable if there is an option to save money. Even if you don’t expect anyone to take the cheaper option, offer it anyway. Consumers appreciate choices.”

In an interview with Build, Cardone offers up Kraft Foods as an example of how choiceexpansion can soften price increases. Kraft has raised prices on Nabisco Oreos several times, but it has also added products, such as the Double Stuf, he says. Customers are less likely to complain when they’re getting double the choices—not to mention the cream filling.

Even if you don’t need to increase prices, Norm Brodsky’s classic Inc. piece “The Case for Higher Prices” presents reasons to do so, such as maintaining your brand image. “By not raising prices on a regular basis,” he says, “. . . you’re gradually undermining the perceived value of your services or products. Like it or not, there’s a natural tendency to link quality and price. . . . If the gap between your prices and [your competitors’] gets too large, customers will start to regard you as the cheap alternative.” (To learn more, search #priceincrease.) SEE ALSO A.01

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{LEADERSHIP}

“If I were recruiting a leader, I’d look for people… who like to

PHOTOGRAPH BY CAVAN IMAGES /GETTY IMAGES

PLA .” —CLAYTON CHRISTENSEN in an interview with strategy + business. Christensen posits that executives ﬁt two distinct archetypes: those who play and those who don’t (and want to be in charge). “The ﬁrst is like Tom West, the leader of the computer-building team at Data General in The Soul of a New Machine,” Christensen explains. “West says in the book that success is like pinball. If you win with one project, you get to play again. I think a lot of senior executives are just that kind of person: They like to play. They don’t care much about where they end up in the hierarchy.”

Tracy Kidder, the Pulitzer Prize-winning author of The Soul of a New Machine, portrayed Data General’s Tom West as a leader with a sense of play. For an update on what happened to West and the other leaders, we recommend Wired magazine’s December 2000 article “Oh, Engineers!” Yes, it’s 13 years old—but that’s still two decades more recent than the book. Even if you haven’t read The Soul of a New Machine, you can appreciate the piece as a management time capsule. (To learn more, see #2Leaders.) SEE ALSO B.05 B.06

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Word of mouth can really ignite sales. So one midmarket company decided to light a ﬁre under potential talkers.

38%

38 percent of adults say they aim to inﬂuence others when they express their preferences online.

Every company knows that word-of-mouth endorsements don’t just create buzz around your product or service; they help sell it as few other things do. Sure, a print or TV ad can help you boost brand awareness, but personal recommendations from friends, relatives, and colleagues are what prompt consumers to reach for their wallets. Thanks to the ubiquity of social media, word of mouth is, well, ubiquitous. Not only do consumers have a trove of opinions and reviews at their fingertips, but 38 percent of adults say they aim to influence others when they express their preferences online. Word of mouth carries weight because it provides an authentic, grassroots endorsement: Someone was so pleased with a product or service that they decided to make time to tell the world about it. This isn’t to say that companies can’t give people a bit of encouragement to spread the word. Consider Warby Parker, an online vendor of eyewear. As part of its home try-on program, the company sends five pairs of specs to customers for free, as a way for them to thoroughly assess their options. Customers are then asked (via email) to post photos of themselves wearing each pair to their social media accounts, essentially conducting a DIY “Do these look good on me?” focus group. This leads to plenty of spontaneous mentions of Warby Parker frames. “Every picture that we see, we comment and give feedback on,” TIM RILEY, Warby Parker’s director of online experience, tells Path.To, the online job-matching platform. “We’re seen as the expert view, but what also ends up happening is that four or five of the customer’s friends also comment. Not only is that person who posted getting really good feedback, but then four or five more people might get introduced to the brand as well.” This photo-driven solicitation of fashion advice works well for eyeglass frames, but what about companies that sell less personal items? NEIL BLUMENTHAL, Warby Parker’s co-CEO, tells Build that the question misses the forest for the trees. Using social media to encourage wordof-mouth advertising isn’t merely about getting customers to post photos or opinions about the company; it’s about understanding how customers think. “You’re never going to get people to do [something] that is unnatural or unhelpful,” Blumenthal says. “Companies need to put themselves in consumers’ shoes and ask what’s really relevant to them, not just ‘Will this help me market?’” For example, Warby Parker knew its social media efforts would succeed because the home try-on program was already generating word of mouth offline. “People would get the home try-on sent to their office, and they would immediately ask their coworkers [how they looked],” Blumenthal says. “It exposed us to an entire [group].” Facebook and Twitter simply provided a means to extend what was already happening.

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PHOTOGRAPH BY ERIC KULIN

{MARKETING}

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Digital content marketing can be both fun and effective, Blumenthal says. One favorite: WarbyBarker.com, a gag site that pretends to sell eyeglasses to dogs. You may laugh (they hope you do), but Blumenthal says the companyâ&#x20AC;&#x2122;s sales spiked on April Foolsâ&#x20AC;&#x2122; Day, when the site went live. (To learn more, search #wordofmouth.) SEE ALSO A.01

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What are workers willing to sacriﬁce for a sustainability initiative? Depends on the ROI.

{SUSTAINABILITY}

Sure, you could call them hippies. The 120 bakers, buyers, and executives who run Alvarado Street Bakery—one of an estimated 300 worker cooperatives in the United States—are proud stewards of the environment. For 34 years, the bakery has produced organic whole grain breads using methods that practically scream “green.” But even the most committed Alvarado workers understand that any earth-friendly strategy will fail if they drain company coffers. That’s why the co-op’s early interest in solar-energy projects went nowhere, explains CEO JOSEPH TUCK. Solar power was “neither affordable nor cost effective” as recently as 10 years ago. The company, however, didn’t abandon the idea. “The question was really how much we, as workers, would be willing to sacrifice—in terms of our wages—to implement solar,” Tuck tells Build. “We were willing to sacrifice to a point; it was a question of our limit.” After a series of meetings, conversations, and straw votes, Tuck determined that employees were willing to forgo roughly $1,000 per year in compensation to make solar panels a reality. With that in mind, the co-op conducted an ROI study and subsequently voted to use cash (and a 30 percent government subsidy) to finance the $1.8 million installation of 1,722 solar roof panels in 2010. Today, 40 percent of the company’s energy—some 2,000 kilowatt hours a day—comes from solar power. What’s more, the solar initiative puts $200 a year in each worker’s pocket. “Future savings now depend on how fast energy prices rise in relationship to inflation,” Tuck says. As if that weren’t motivating enough, the company also keeps a running online tally of its CO2 impact. Some highlights: It would take 38,514 mature trees one year to reduce the total amount of C02 avoided. The total amount of C02 avoided is equal to nearly 6.4 million miles driven in a family sedan. The total amount of energy generated would power 1,466 houses for one month. Though less quantifiable, the cultural and marketing impact cannot be ignored. “This makes all of us feel that much better about being part of the business,” Tuck says. “Plus, ‘bread baked by the sun’ has a really nice ring to it.”

Alvarado Street Bakery has gone from selling 650 loaves of bread per day to selling 40,000. As with any company, growth brought with it some challenges, but Tuck credits Alvarado’s cooperative structure with encouraging employee buy-in, maintaining a strong culture, and powering clear communication—even during manic growth spurts. “In a culture that’s worker-owned and worker-managed,” Tuck says, “we don’t have a lot of managers, because you don’t really need them.” (To learn more, search #buildsustainability.) SEE ALSO A.13

B.08

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To keep ideas ﬂowing, jot them down fast. Just make sure you jot them down on paper.

{INNOVATION}

Your smartphone is charged, you’ve updated all the apps on your tablet, and your laptop is tucked into your bag. You’re ready to head to work. Just one more thing: Don’t forget the pen and paper. So suggests JUSTIN ROSENSTEIN, and he is no Luddite. Cofounder of task-management software developer Asana, Rosenstein always keeps paper close at hand, and for good reason. In a post for LinkedIn’s “Things I Carry” series, he elaborates: “Computers are great when information is highly structured, but for brainstorming and early designs, nothing beats writing on paper. And I say that as a hard-core technologist who tracks every tiny detail of my life electronically.” That’s because good ideas can occur to you anytime, anywhere. And when they do, grabbing pen and paper is often the fastest, most efficient way to capture them. “Inspiration can strike at the most surprising moments,” Rosenstein continues, extolling the virtues of paper. “I can sketch a few quick drawings for what a new product feature might look like. Because it’s just an ugly drawing (I have pretty poor penmanship), I can focus on the ideas rather than getting bogged down in the pixel-level details. And when I show the ideas to others, it forces us to keep the discussion high-level—otherwise it can be easy to start debating color before we’ve even decided what we’re building.” BETH KANTER, another contributor to the “Things I Carry” thread, describes herself as “bilingual,” because she relies on pens and notebooks as well as tech tools. “I have noticed that analog and digital methods of note-taking or knowledge capture seem to make me think in different ways,” writes the speaker, author, and trainer. “I suspect that whether you type or write, [ideas] somehow get encoded into your brain differently.” She’s on to something. (Take the quiz at C.10 to learn what research has revealed about the relationships between paper and performance.)

PHOTOGRAPH BY ERIC KULIN

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One disciple of Rosenstein’s philosophy is Jerry Seinfeld. The iconic comedian tells the New York Times Magazine that he’s never written a joke on a computer. As he explains on video, “I don’t like that cursor ﬂashin’, looking at me like, ‘So, whaddya got?’” One episode of Seinfeld, in fact, centered on the frantic search for a piece of paper on which Jerry had written a joke. No doubt it was pure gold. (To learn more, search #buildinnovation.) SEE ALSO A.02 A.06

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This is author and consultant LEE COLAN’s Build Live talk, on how to turn your business into an execution machine, as transformed into art in real time by “graphic facilitator” KELVY BIRD.

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Who’s who in The Build Network? Our guide to the executives, thought leaders, researchers, partners, organizations, artists, infographic makers, and authors whose ideas ﬁll the pages of this catalog—plus data, backstories, free opinion, and random scuttlebutt from around our virtual watercooler.

ACHOR, SHAWN

A.11

Founder and CEO of Good Think Inc. and author of The Happiness Advantage @shawnachor ANTHONY, SCOTT D.

C.09

Managing partner at global strategy and innovation consulting ﬁrm Innosight @ScottDAnthony BERKUN, SCOTT

B.10

CLANCY, KEVIN

C.08

Chairman of Copernicus Marketing COMCAST BUSINESS CLASS

Comcast Business Class offers a wide range of products and services, an enhanced ﬁber-optic network, and experienced customer service, all to help a business’s bottom line. @Comcast

Public speaker and author of several books, including The Myths of Innovation @berkun

DAMOULAKAS, JAMES

BIERMAN, TIM

DELOITTE

B.09

Manager of Pearl Jam’s Ten Club @10CTim BLUMENTHAL, NEIL

C.13

Co-CEO of online eyeware retailer Warby Parker @NeilBlumenthal

BORIS, CYNTHIA

B.13

Marketing consultant and contributor to MarketingPilgrim.com

BUCKINGHAM, MARCUS

A.04 A.13

Management consultant and author of Now Discover Your Strengths and Stand Out, among other leadership books @mwbuckingham BURTZLOFF, MARY

B.14

CARDONE, GRANT

C.11

Archivist at the Eisenhower Presidential Library and advisor to Build on how the “Eisenhower Matrix” played out in the real world. Sales expert and author of The 10X Rule @GrantCardone CHOUDRAY, SANGEET PAUL

C.02

Business model analyst and author of Platform Thinking @sanguit

A.10

B.12 C.04

Deloitte Growth Enterprise Services: Global resources with the personal touch of a trusted professional advisor serving midmarket and privately held companies in four key business areas (audit, ﬁnancial advisory, tax, and consulting) and combining the talents of those groups to address clients’ needs. @McGee_Midmarket B.08

Staff writer for the New York Times who penned “Is Giving the Secret to Getting Ahead?” @susandominus DOMTAR

B.15

Author of the new edition of the HBR Guide to Persuasive Presentations, as well as two award-winning books on the art of presenting @nancyduarte DYCHE, JILL

A.17

Vice president of Thought Leadership for SAS, blogger for the Harvard Business Review, and author of the book The CRM Handbook @jilldyche

@glasshouse_tech

DOMINUS, SUSAN

@Cynthialil

A.17

CTO of GlassHouse Technologies

DUARTE, NANCY

C.10

Admit it: Holding a physical copy of Build in your hands feels gratifying—and very personal. We’ve got Domtar to thank, in part, for those margin notes and dog-eared pages that make this copy your copy. Domtar is the sustainable paper company that designs, manufactures, markets and distributes a wide-variety of ﬁber-based products, including communication papers, specialty and packaging papers, and personal care products. @DomtarPaper

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FIDELMAN, MARK

B.05

CEO of Evolve! Capital and author of Socialized: How the Most Successful Businesses Harness the Power of Social Media @markﬁdelman FIGLIUOLO, MIKE

A.12

Managing director of the personal training and coaching consultancy thoughtLEADERS, LLC @thoughtLEADERS GE CAPITAL

B.04

At GE Capital we’re not just bankers, we’re builders. We provide smart ﬁnancing and the GE knowhow to help our customers’ capital go further and do more. Your company is building something, and we get that. What you’re building takes money, but it may also need knowledge and expertise. We can help. gecapital.com, @GECapital GINO, FRANCESCA

B.08

Harvard Business School associate professor and author of the book Sidetracked: Why Our Decisions Get Derailed and How We Can Stick to the Plan @francescagino

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HubSpot’s Dan Ritzenthaler (right) and Nelson Joyce explain the ABC’s of successful meetings.

IT TAKES A NETWORK: BUILD COMES ALIVE AT THE “SOLVE SESSIONS” IN CAMBRIDGE. The Build Network is committed to all forms of interactivity, including the original variety: face-to-face communication. In June, nearly 100 members gathered in Cambridge, Massachusetts, at the American Academy of Arts & Sciences, for a daylong confab that offered a mix of learning, JUNE 2013 mingling, sharing, and sketching (more on that later). The sessions were educational in the truest sense: The speakers provided plenty of useful ideas to the attendees, and the attendees were quick to point out to the speakers things they may have missed or failed to address. (Count on a Build Network event to inspire plenty of lively Q&A exchanges.) Also, there was a cocktail party. We dubbed this event “The Solve Sessions” and there was a strong emphasis on practical (if sometimes novel) solutions to common problems. For example, Dan Ritzenthaler and Nelson Joyce (pictured above), from HubSpot’s UX team, kicked the day off with a quick tutorial on a technique they’ve labeled “ABC: Always Be Capturing,” a great way to keep meetings on track and productive by visually recording every relevant point. Helpful hint: If someone’s comments can’t actually be captured, they should stop talking. In hallway conversations between sessions, many audience members offered their own solutions to vital management challenges. When talk turned to the perils of fast growth, DAN KING, founder of Allconnect, warned about a reduction in what he called “talent density.” Too often, he said, rapid growth prompts companies to staff up quickly. That can lead to weak hires. “Have a talent pipeline,” he advised. “We learned to recruit for positions before we had openings. Don’t wait. Our managers had to cultivate an on-deck circle or they’d live with mediocrity.” Happily, there was no mediocrity in sight at the American Academy of Arts & Sciences—especially among the executives who attended. We at The Build Network are grateful to them and to our host, who gave us the chance to realize our collective dream of one day saying, “We’d like to thank the Academy….” BUILD LIVE BOSTON

PHOTOGRAPH BY JÖRG MEYER

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WHAT WAS YOUR BIGGEST TAKEAWAY FROM TODAY’S “SOLVE SESSIONS?”

“The necessity of inbound marketing and building a protective ‘moat’ around your business.” LAURA BROCKWAY, ASSOCIATE BRAND STRATEGY DIRECTOR, MECHANICA, NEWBURYPORT, MASSACHUSETTS

“To stop wasting money on traditional marketing methods in lieu of newer forms.” ANDREW PAIRMAN, CEO, ANBELL, KINGSTON, JAMAICA

“The fact that I can create a much more passionate, engaged workforce--and now have a way to measure that level of engagement.” DANIEL E. GALLAGHER, PRESIDENT & CEO, SOLEO COMMUNICATIONS, FAIRPORT, NEW YORK

“That you need to be surrounded by people who have bigger visions, bigger ideas.” SANDY BONNEY, CEO, LASER FOCUS COACHING, WESTBROOK, MAINE

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“Frankly, each [speaker] here had maybe two or three really critical, actionable items that I can take away.” WENDY MEADLEY, FOUNDER AND CEO, SOCIAL WENDY GROUP, MINNEAPOLIS, MINNESOTA

“Employees have an emotional bank account, and you’ve got to continue to make deposits.” SCOTT RICE, COO, POWERLINK FACILITIES MANAGEMENT SERVICES, DETROIT, MICHIGAN

PHOTOGRAPH BY JÖRG MEYER

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GOLDSMITH, JEFFREY

A.11

GRANT, ADAM

B.08

GREEN, ALISON

B.02

THE NETWORK

Marketing consultant and head of marketing at Kean who wrote the 1993 Wired classic “This Is Your Brain on Tetris” Associate professor of management at the Wharton School and author of Give and Take @AdamMGrant Management consultant and author of the “Ask a Manager” blog @AskAManager GUTERMAN, JIMMY

B.15

HALL, JULIE

C.01

An executive curator for TEDxBoston and consultant with Collective Next, a Boston-based collaboration agency @jimmyguterman Executive vice president of marketing ﬁrm Schneider Associates B.06 HASTINGS, REED @reedhastings

CEO of Netﬂix

HEUSNER, GARY

A.17

HEWITT, PERRY

B.16

KALTENECKER, EVODIO

C.09

KANNAN, PV

B.13

Client partner at the Chicagobased custom software development ﬁrm Geneca @Geneca Dr. Gary Kunkel (above) and Maya Townsend (left) share their insights with attendees between sessions.

Chief digital officer at Harvard University @perryhewitt Editor of strategy blog Estratagia Para Todos CEO of [24]7, a digital customerservice solution provider @pvkannan

KAUSHIK, AVINASH

C.08

KAYE, DEBRA

A.15

Digital marketing evangelist for Google @avinash

Fast Company contributor and author of the book Red Thread Thinking: Weaving Together Connections for Brilliant Ideas and Proﬁtable Innovation @DebraA_Kaye KNAPP, JAKE

A.02

KRAUSOVA, MARIKA

B.05

LAUBY, SHARLYN

A.03

Design partner at Google Ventures Design Studio @jakek Senior research analyst at Corporate Executive Board and author of the CEB blog post “Who Really Has the Biggest Impact on Employee Performance?” Human resources consultant with ITM Group and blogger at hrbartender.com @sharlyn_lauby

OVERHEARD AT BUILD LIVE, 140 CHARACTERS (OR FEWER) AT A TIME In the spirit of capturing the spirit of Build Live, here are a few selections from the event’s orbit in the Twittersphere: [Tweet from JetBlue customer, cited by HubSpot CEO Brian Halligan in his keynote session:] “I want to make love to the @jetblue terminal.” [JetBlue back to customer, minutes later:] “Goodness, I hope you at least buy the terminal dinner ﬁrst.”. . . From Lee Colan’s talk: “Employees ask four fundamental questions: Where are we going? How will we get there? How can I contribute? What’s in it for me?” . . . From Gary Kunkle, Build economist-in-residence (pictured above, top) on growth: “The faster you get it, the faster you lose it” . . . From Colan: “If the problem isn’t solved within three e-mails, it probably shouldn’t be solved with e-mail”. . . From Maya Townsend’s (pictured above, bottom) talk: “To make change stick, we need to make the undesirable desirable”. . . From Halligan: “The CEO’s role [now includes]: 1) Salesman-in-Chief 2) Messenger of transparency and openness”. . . From Colan: “You don’t have to be great to get started, but you need to get started to be great.”

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AT BUILD LIVE: THE ARTIST-IN-RESIDENCE AT PLAY Takeaways. Bullet points. Action steps. That’s what you want. And that’s what attendees at the Build Network’s “Solve Sessions” got, thanks to the scribing power of Kelvy Bird. She’s a graphic facilitator who—in real time—listens to presentations on complex business subjects and maps out the highlights. (She does it at events around the world—most recently in Myanmar.) In other words, she takes notes so you don’t have to. All you have to do is snap a photo of Kelvy’s masterpieces on your smartphone. Here are ﬁve of her drawings from the “Solve Sessions.” (For a digital version, go to thebuildnetwork. com/build-boston/.)

An overview of the day’s sessions, which explored topics such as leadership, change management, and the drivers of sustained growth.

Dan Ritzenthaler (@ danritz) and Nelson Joyce (@ nelsonjoyce) of HubSpot’s UX Design Team (@HubSpot) explain the one rule that makes their meetings run smoothly: Always Be Capturing.

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THE NETWORK

According to McKinsey, only 38 percent of executives described their latest change effort as better than somewhat successful. Maya Townsend (@mayapare) of Partnering Resources shared six strategies that will make change efforts more likely to succeed.

Seventy-two percent of new jobs are created by 1 percent of U.S. companies. What do those 1-percenters have in common? Gary Kunkle, Build economistin-residence, explains that it’s not location, industry, or huge bursts of growth.

Old “pushmarketing” paradigms (interruption, annoyance) no longer work, argues Brian Halligan (@bhalligan), CEO of HubSpot. Today, marketers must create valuable content to which existing and potential customers will be drawn.

Kelvy Bird (@KelvyBird, dpict.info) translates oral presentations into visual, graphically rich formats. She describes her work as “The Fine Art of Listening,” a way of scribing that captures both the explicit and more subtle layers of conversations. Her current partners and clients include the World Economic Forum (you know, the guys who host that annual meeting in Davos), MIT Sloan Executive Education, Harvard Ed and Business Schools, The Nature Conservancy, the U.S. Government, and several Fortune 100 companies.

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“Who in here can’t get better at communication?! Please don’t raise your hand, there’s another class for egomaniacs.” LEE COLAN, CO-FOUNDER, THE L GROUP

I M LAVOIE, JIM

A.08

LEDDY, CHUCK

B.08

CEO of Rite-Solutions Correspondent to the Harvard Gazette and Boston Globe @ChuckLeddy LEE, BILL

A.01

President of the Customer Reference Forum and author of The Hidden Wealth of Customers: Realizing the Untapped Value of Your Most Important Asset @bill_lee LUIJKE, JORIS

A.06

Global HR chief at Australian software company Atlassian and blogger at Culture Hacking @meJoris LYNN, AARON

B.11

Cofounder and chief productivity officer at Asian Efficiency @aaronlynnme

MADDEN, JERRY

A.14 B.03

MANN, DARRELL

C.07 C.12

Former associate director of ﬂight projects at NASA’s Goddard Space Flight Center

O’DONNELL, J.T.

B.01

CEO and founder of Careerealism Media @jtodonnell OSTERWALDER, ALEX

C.03

CTO of strategy consulting ﬁrm Blackswan and former chief engineer at Rolls-Royce @darrellmann

Author of the book Business Model Generation: A Handbook for Visionaries, Game Changers, and Challengers @AlexOsterwalder

MCDERMOTT, RICHARD

PARRISH, SHANE

A.05

Coauthor of the book Cultivating Communities and president of McDermott Consulting, specializing in organizational change MOHAMMED, RAFI

C.11

Pricing strategy consultant and author of The 1% Windfall: How Successful Companies Use Price to Proﬁt and Grow B.16 NARANJO-BOCK, CATALINA UX researcher at Yahoo @catalinaNB

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B.14

Writer/director of the Farnam Street blog @farnamstreet PASTOREK, WHITNEY

B.09

Writer and photographer with the New York Times, Village Voice, Fast Company, Sports Illustrated, and other publications @whittlz PAQUETTE, ERIC

C.08

Senior vice president at Copernicus Marketing

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Read this issue (again) on your iPad! Each new copy of Build: The Catalog of Ideas is available as an iPad app. WorldMags.net

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PERLOW, LESLIE A.

A.16

Harvard professor and author of the book Sleeping With Your Smart Phone: How to Break the 24/7 Habit and Change the Way You Work @LesliePerlow PICKUS, JOSH

C.05

President and CEO of Support. com, a provider of cloud-based services and software based in Redwood City, California @support_com PIGLIUCCI, MASSIMO

C.08

Professor of philosophy at the Graduate Center of the City University of New York @mpigliucci PORTER, JESSICA

A.16

Organizational consultant and coauthor of the Harvard Business Review article “Making Time Off Predictable—and Required” PORTER, JOSHUA

A.02 B.16

Director of UX at the Boston-based marketing ﬁrm HubSpot @bokardo PORTERFIELD, AMY

C.08

Social media consultant and co-author of Facebook Marketing All-In-One for Dummies @amyporterﬁeld A.07

PostcardMania is a full-service postcard direct-mail marketing company in Clearwater, Florida, with nearly 200 employees—three of whom we’ve proﬁled in this catalog. postcardmania.com @postcardmania THE PRINCIPAL FINANCIAL GROUP

The economy has taken a toll on investments, businesses, and employee benefits. The Principal Financial Group can give you an edge when it comes to protecting your business. If you’re ready to forge ahead, we can help you assess and rebuild your financial dreams. Principal. com/biz.htm,

C.15

SANDBERG, SHERYL

A.13

Organizational development consultant with Carolinas Healthcare System @EvaRykr Chief operating officer at Facebook and author of Lean In: Women, Work, and the Will to Lead @sherylsandberg SCANDURA, TERRI

A.05

SCHNEIDER, JOAN

C.01

A.08

University of Miami management professor @Terr_Scandura

@ThePrincipal C.08

CEO of Romulus Advisory and former partner at Peppers & Rogers Group

thousands of qualiﬁed technicians, and a personal passion for helping you protect your business. TycoIS.com UNUM

More than 160 years of providing employee beneﬁts solutions that help employers manage their businesses and employees protect their families and livelihoods. unum.com/employers, @unumnews WATKINS, MICHAEL D.

A.09

President and founder of the integrated marketing ﬁrm Schneider Associates @JoanSchneider

CEO coach and author of the book The First 90 Days: Proven Strategies for Getting Up to Speed Faster and Smarter @watkinsmichael

SCHRAGE, MICHAEL

WEBER, LAUREN

A.03

Research fellow at MIT Sloan School’s Center for Digital Business and author of the book Serious Play SCOTT, MARY MICHELLE

B.05

President of Fishbowl Inventory and contributor to the HBR Blog Network @MaryMichelleS SEARCY, TOM

C.11

Founder and CEO of consultancy Hunt Big Sales @tomsearcy

SEXTON, CLIFF

POSTCARDMANIA

RHODEN, MATTHEW

RYKRSMITH, EVA

B.16

UX director at CareerBuilder.com @cliffsexton

SOUZA, LINDA

A.04

TELLIS, GERARD J.

C.01

Vice president of marketing at Central Desktop @lindasouza Director of the Center for Global Innovation and author of Unrelenting Innovation: How to Build a Culture for Market Dominance

Reporter at the Wall Street Journal who wrote “The One Question to Ask In an Exit Interview” @laurenweberWSJ

WHEELER, CODY

B.01

WILLIAMS, DAVID

B.05

YANOVSKY, STEVE

C.03

ZETLIN, MINDA

A.17

Management consultant, owner of Academy Success, and writer of the Lifehack.org article “Are You Making This Major Daily To-Do List Mistake?” @codybwheeler CEO of Fishbowl Inventory and contributor to the HBR Blog Network @DavidKWilliams Marketing consultant with ChiefOutsiders Contributor to Inc., Computerworld, New York, and other publications @MindaZetlin

@gerrytellis THOMPSON, LEIGH

A.15

TUCK, JOSEPH

C.14

Professor at the Kellogg School of Management at Northwestern University and author of the book Creative Conspiracy: The New Rules of Breakthrough Collaboration CEO of Alvarado Street Bakery @AlvaradoStreet

TUCKER, THERESE

RILEY, TIM

C.13

ROSENSTEIN, JUSTIN

C.15

Director of online experience at online eyeware retailer Warby Parker @tmrly Cofounder at Asana, a task-management software company

A.01 B.07

CEO of the Los Angeles-based software company BlackLine Systems and former CTO of SunGard Treasury Systems @BlackLineSys

TYCO

Tyco Integrated Security is the leader in business security, with world-class monitoring centers,

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