The Art Of Magazine: Volume 10

Why Girls Get Called Bossy and How to Avoid it Adam Grant

Create Word-of-Mouth-Worthy Moments with Customers Jackie Huba

Smarter Negotiations: 10 Key Elements of a Total Compensation Package Avinash Kaushik

Marc ECKŌ

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WINTER 2015

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UNLABEL 5 Prescriptions for Authenticity

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CONTENTS 7

61

Lessons on Leading Creative Work David Burkus

11

Live it. Dream it. Do it.

Ron Tite

13

Playing Big Tara Mohr

16 Where Do You

Stand on Important Social Issues?

Dr. Vince Molinaro

25

How Adobe Got Rid of Traditional Performance Reviews Bob Sutton & Huggy Rao

27 Why Girls Get Called Bossy

and How to Avoid it

22

Adam Grant

30 Busyness is No Badge

of Honor Peter Aceto

32 Challenging Ourselves

to Change the World Jason Hermitage

18

Why 20-60% of Your New Customers Leave & How to Stop it Joey Coleman

20

Retargeting Ads Tom Fishburne

22

Actionable Summary: Linda Hill’s Collective Genius Rex Williams

36 Smarter Negotiations Avinash Kaushik

40 Making Charity Work Michael I. Norton & Jill Avery

36

44

Create Word-of-Mouth-Worthy Moments With Customers Jackie Huba

46

We Don’t Need More Relationships John Jantsch

48

Lessons from The Sports Page: The Ultimate Performance Enhancing Drugs Arianna Huffington

EDITOR Scott Kavanagh PUBLISHER Christopher Novais CREATIVE DIRECTOR

53

Joey Van Massenhoven

What is Your Media Really Trying to Do

HOW TO REACH US

Mitch Joel

56 How to Build Habit-Forming

Products Nir Eyal

The Art of Productions Inc. 46 Sherbourne Street 3rd Floor Toronto, Ontario Canada M5A 2P7 ADVERTISING Ron Bester - Director, Business Development

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60 What Leaders Need to

Know About Millennials in the Workplace Penny Partridge, CPA, CA, CHRP

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Unlabel: 5 Prescriptions for Authenticity Marc Eckō

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by The Art of Productions Inc. All rights reserved. Opinions expressed do not necessarily represent those of the publishers. No part of this publication may be used without written permission from the publisher. Subscription rate is $30.00 annually.

The Editor’s Letter Scott Kavanagh, Editor “Creativity is as important now in education as literacy and we should treat it with the same status.” - Sir Ken Robinson Sir Ken Robinson has spoken for The Art Of and along with being one of our most admired speakers has been leading the charge for a revolution in education, starting with creativity.

We often get stuck in routines responding to the demands of both our day-to-day lives and our careers. Creativity can be seen as a luxury afforded to only those with an abundance of free time or to those that have been born with that ‘special’ gift. I would encourage you to think differently about creativity and how it is implemented in your life.

Creativity is about generating ideas or producing things and transforming them into something of value. It often involves being inventive, ingenious, innovative and entrepreneurial. Creativity is not just about special people doing special things. We all have the potential to be creative and creativity is a skill that needs to be developed.

It is our goal as an organization to give you an opportunity to spend time outside of your business and your life to see things in a more creative light and to hopefully provide the inspiration to guide you down the most successful path, regardless of your definition of success. Our platform has been designed specifically to bring a collection of the brightest minds to the forefront in an educational and entertaining format.

I’d love your feedback about our content, conferences and The Art Of in general.

If you have the opportunity, please send me an email at scott@theartof.com Helping you succeed, Scott Kavanagh

The Art of Magazine features exclusive content from bestselling authors, corporate visionaries and leading authorities in the business world. Our magazine is published quarterly with features and insights on marketing, entrepreneurship, sales, leadership and innovation. For more information visit: theartof.com/magazine

Book Pick

Zero to One

By Peter Thiel with Blake Masters “Zero to One is an important handbook to relentless improvement for big companies and beginning entrepreneurs alike. Read it, accept Peter’s challenge, and build a business beyond expectations.”

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FEATURED CONTRIBUTORS Adam Grant

Page. 27

New York Times Bestselling Author of Give and Take: A Revolutionary Approach to Success & Tenured Management Professor at Wharton

Avinash Kaushik

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Digital Marketing Evangelist for Google & Bestselling Author of Web Analytics 2.0 & Web Analytics: An Hour A Day

Jackie Huba

Page. 44

Customer Loyalty Expert & Bestselling Author of Monster Loyalty: How Lady Gaga Turns Followers into Fanatics

Avinash Kaushik Marc EckĹ?

61 Page. 62

Digital Marketing Evangelist for Google & Founder & Chief Creative Officer of Bestselling Author of Web Analytics 2.0 & Web Marc EckĹ? Enterprises & Author of Analytics:Selling An Hour Day Unlabel: YouAWithout Selling Out

WINTER 2015 | 5

LESSONS ON LEADING

CREATIVE WORK

FROM THOMAS EDISON’S GREATEST “INVENTION” David Burkus

Thomas Edison didn’t try ten thousand times before inventing the lightbulb.

That notion is false on three different fronts. Edison didn’t invent the lightbulb so much as he refined it. There weren’t ten thousand attempts to find the right filament to use in the lightbulb, and, perhaps most important, it really wasn’t Edison doing all that trying. The story of Edison alone in a workshop experimenting with ten thousand different materials isn’t true even though

it was most likely first told by Edison himself. Edison may have spread this story to help sell his invention, but the story’s popularity has caused it to become a potentially dangerous myth.

In tracing the origin of the lightbulb, historians Robert Friedel and Paul Israel compiled a list of twenty-two people who invented incandescent lamps before Edison even filed his first patent

for a lightbulb. John W. Starr, who filed a caveat for a U.S. patent in 1845 but died shortly afterward, was among those who preceded Edison. When Edison filed his first patent related to electric lamps, it was rejected because the patent office felt that it infringed on Starr’s preexisting patent. After making a few adjustments to his design, Edison filed a patent titled “Improvement in Electric Lights” in 1878.

WINTER 2015 | 7

At the time, however, the right filament was still an unsettled issue.

Depending on the source, Edison tested seven hundred, one thousand, six thousand, ten thousand, or some other number of filaments before finding the perfect materials. According to the Smithsonian, Edison tested sixteen hundred different filaments—everything from coconut fiber to human hair— before settling on carbonized bamboo fiber. It’s difficult to know the exact

number of attempts, however, as much of the exaggeration was circulated by Edison himself when speaking to the press. Edison told of a worldwide search for the perfect fiber in order to advertise the rigor of his invention process and the superiority of his new lightbulb.

Moreover, whatever materials were actually tried, it’s highly likely that Edison wasn’t the one experimenting with them. The bulk of Edison’s work on electric lightbulbs came as a result of

his greatest invention: Menlo Park.

Edison got his start in the telegraph industry, where he created numerous improvements to the telegraph and generated some considerable revenue by selling the patents for those improvements. In 1876, Edison took that money and built a new complex for himself in the rural town of Menlo Park, New Jersey, a stop on the main line between New York City and Philadelphia.

In its six years of operation, Menlo Park

generated over four hundred patents and became known as the “invention factory.” Over time, the popular image of Edison alone in his giant facility tinkering away on breakthrough innovations developed, despite the fact that it in no way resembled what actually happened in Menlo Park. Edison was no lone inventor, but rather he compiled a team of engineers, machinists, and physicists who worked together on many of the inventions we now attribute to Edison alone. The team referred to themselves as “muckers” and overtook the upstairs space of Edison’s Menlo Park warehouse.

As their worked progressed, the team of muckers quickly realized the power behind Edison’s name. They found that when they advertised their ideas or tried to sell themselves to potential clients, their audience seemed to like the notion that a single individual had authorship of their ideas, especially

when that person was Edison. In the ongoing struggle for new investors, many of the muckers found that the celebrity associated with Edison’s name was too valuable to ignore. So they began turning Edison the man into Edison the mythological lone genius. Edison alone drew better publicity than Edison and the muckers. Even the popular story of Edison’s “worldwide” search for the perfect “filament likely began as a publicity campaign designed to draw attention to and generate interest in the lightbulb. In fact, Edison had already found the bamboo fibers in a folding fan lying in his workshop when the story began to circulate. To those outside Menlo Park, Edison was a lone genius responsible for an astonishing array of inventions. But according to Francis Jehl, Edison’s longtime assistant, those inside knew that “Edison [was] in reality a collective noun and [meant] the work

of many men.”

The lesson of Edison and the lightbulb isn’t to take credit for other people’s work; it’s that creativity is a team sport.

Sometimes your greatest contribution as a creative leader isn’t to forge ahead doing the work that made you into a leader. More often, great leaders, like great innovators, become great because of their ability to coordinate the efforts of a team. Most of the problems in business will not be solved by the efforts of just one person, or even a small group. Instead, they’ll require a team of “muckers” collaborating and experimenting until they find the right solution.

The preceding is an excerpt from The Myths of Creativity: The Truth About How Innovative Companies and People Generate Great Ideas reprinted by permission from the publisher, Jossey-Bass, a Wiley brand, from “The Myths of Creativity” by David Burkus.

Copyright (c) 2013 by David Burkus.

8 | WINTER 2015

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LIVE IT. DREAM IT. DO IT. Or… What I learned from The Art of Entrepreneurship Ron Tite While I curated most of the content below, the original words were written and spoken by the wonderful speakers who graced the stage at The Art of Entrepreneurship at the Convention Centre in Toronto. Thanks to Eric Ryan, Chris Guillebeau, Debbie Travis, Alexis Ohanian, and Gary Vaynerchuk for an amazing day and even better content. My summary of their thoughts is below.

What a day. We learned that business – aka selling shit – is about depth. We learned that Entrepreneur is French for “Has ideas. Does them.” It’s someone who will work 24 hours a day for themselves opposed to working 1 hour a day for someone else. But that dedication isn’t enough. How do you start it? How do you build it? How do you grow it?

Start with what you have. Coming up with great ideas is easy. Coming up with your values is easy. Writing down what you want to do is easy. Doing it and sustaining it is entirely different. Ideas are worthless. Execution is everything.

And luck, my friends, has nothing to do with it.

Freedom is what we want and value is how we achieve it. And you don’t need

to open a factory, just open your laptop.

Don’t play house. Find your passion.

Figure out if you have a good idea.

Surround yourself with the best.

After all, others can steal your ideas or steal your products. But they can’t steal your culture. And they can’t steal your relationships.

Admittedly, no one has any idea what they’re doing. So just… trust your gut.

Be authentic. Be helpful. Be balanced.

Be happy.

Be in the right place. At the right time.

With the right offer.

Market in the year you live in.

Have a sense of humour.

Think “yes and”, not “yes but…” And on that note, say yes to the doughnut.

Don’t care about your competition. Care

about your people.

Reality isn’t a solution. So… Embellish. Lie. Hustle.

Create from scratch.

Make great stuff.

Marry a team player.

Embrace risk. Embrace mistakes.

Attack monsters, not villains.

Experiment with pricing.

Stay in your lane.

Protect the daisy.

Inspire advocates.

Sleep your way to the top. But remember, sex is like marketing. Only losers pay.

Keep it weird because weird people change the world.

We’re all in this together. So let’s all make the world suck less.

Live it. Dream it. Do it.

WINTER 2015 | 11

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PLAYING

BIG JOHN JANTSCH

Most of us walk through life thinking that feedback gives us information about ourselves – our abilities, strengths, and weaknesses, our performance. I invite you to consider a radical, new idea: Feedback doesn’t tell you anything about you; it tells you only about the person giving the feedback.

If you show your paintings to three successful artists in your community, and none of them like your work much, does that give you any facts about the quality of your artwork? No – it only gives you facts about what those three people like or don’t like. What if a million people don’t like your paintings? Surely that tells you that you aren’t a “good artist,” right? I’d argue it doesn’t. Rather it tells you something about what contemporary viewers dislike.

If you pitch your business idea to a potential investor and that investor isn’t interested, that tells you something about what gets her attention and what doesn’t.

It does not actually tell you anything

Tara Mohr

about your merit as an entrepreneur or the quality of your idea. If your relatives think you’re an irresponsible mom, that doesn’t tell you about your mothering.

It tells you something about what they see as responsible parenting.

Feedback gives us facts about the opinions and preferences of those giving

the feedback. It can’t tell you about your merit or worthiness. When we understand this, we’re free; we’re free to seek, gather, and incorporate feedback.

Because here’s the thing: Feedback is wildly important. Stay with me for part two of the idea here, because part two is very important: Feedback shouldn’t WINTER 2015 | 13

be dismissed because it doesn’t tell you anything about you. Feedback is vital not because it tells us about our own value but because it tells us whether we are reaching the people we need to reach.

If an entrepreneur wants her pitch to be effective with venture investors, she needs to hear their feedback in order to learn what inspires them to invest. If an aspiring memoirist wants her work to be read widely, she needs to hear feedback from her intended audience.

If a teacher wants her students to learn a lot and enjoy her class, she needs to know – from their feedback – whether that’s happening.

When you look at feedback this way, you can approach it with a kind of exquisite calm and centeredness because you know it’s just useful data, nothing more. Feedback is not meant to give you self-esteem boosts or wounds. That’s not its place. It is meant to give you tactical information about how to reach the people you want to reach. Feedback is emotionally neutral information that

tells you what resonates for your desired audience, what engages the people you want to engage, what influences the people you want to influence.

When I write a blog post, and no one comments on it, shares it on social media, or writes to me about it, I could conclude that I wrote a “bad post” and start listening to inner critic tapes that I’m not good at what I do. That would be the old paradigm: thinking the feedback tells me about me. In the new paradigm, I can see that the feedback tells me about my readers – about what makes a post compelling for them. The first line of thinking sends me into an unhelpful, self-obsessive, negative spiral.

The second helps me rapidly improve my craft.

Think of Rachel, the photographer I talked about at the beginning of the chapter, who felt so traumatized by the rough criticism she’d received on her work in grad school. What if she were able to reframe her professors’ harsh criticisms not as definitive statements of

her work’s merit but rather as reflections of the preferences of the school’s faculty at the time? She might have quickly realized that elite academia was not where her photography was going to find its most enthusiastic viewers, but that women consumers might respond very differently. It would have been much easier for Rachel to keep taking pictures, doing what she loved to do and what she was quite talented at.

As Meeta Kaur, a writer, speaker, and the creator of a collection of Sikh American women’s writings, puts it, “Now I see criticism as a source of information, somewhat akin to a news article or opinion editorial. Shifting to it being a source of information takes the sting out of it, takes the personal side out of it, and makes it useful and eyeopening.”

Reprinted by arrangement with Gotham Books, a member of Penguin Group (USA) LLC, A Penguin Random House Company. Copyright © Tara Mohr, 2014.

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WHERE DO YOU STAND ON

IMPORTANT SOCIAL ISSUES? Dr. VINCE MOLINARO Where Do You Stand on Important Social Issues?

When Apple CEO Tim Cook decided to lead a contingent of his employees in a Pride Day parade in San Francisco in June, he was subtly crossing into uncharted waters for a major business leader.

It wasn’t a coming out event for Cook; for many years, he has been dubbed one of the most powerful gay business leaders in the United States. No, this was a subtle and highly symbolic statement about the changing role of CEOs. Simply put, by taking the lead at the parade, Cook had decided he needed to be seen to be leading on an important and highly divisive social issue. In the past, that would be seen as a risky proposition for any high profile CEO. Today, it’s appears to be a new

16 | WINTER 2015

expectation of leaders.

In fact, Cook’s Pride Day appearance is just one of several important social and political statements he has initiated since he took over from the late Steve Jobs. Last year, Cook wrote an op-ed piece in the Wall Street Journal urging Congress to pass legislation that would protect LGBT employees from workplace discrimination.

Cook as well waded into the climate change debate at Apple’s annual stockholder’s meeting this past spring.

Cook was challenged by a conservative think-tank to abandon environmental sustainability programs because they were eroding the company’s profitability.

Cook reacted angrily, and invited the questioner to sell all his Apple stock if he did not like the company’s focus on green initiatives. “If you want me to do things only for ROI reasons, you should

get out of this stock,” Cook said in a wellpublicized exchange.

Those kinds of postures from a CEO of a major, publicly traded company would have been traditionally been unheard of. Still, is this behavior particular to Apple, a company that has eschewed traditional corporate culture since its inception? Or, is this the beginning of a trend where CEOs are willing to be more active in pursuit of progressive social and business issues?

Consider that at the same Pride Day parade in San Francisco, many of America’s most prominent companies were represented. It was perhaps not surprising to see names like Virgin America, Whole Foods, Facebook, Netflix and Google in the lineup of corporate participants. More surprising was the presence of companies like Anheuser Busch, Bank of America, Burger King,

JPMorgan Chase and Coca-Cola.

Large corporations, and their corporate leaders, have for many years staked out philanthropic causes to show that they care about broader social issues.

However, many of these efforts were focused on motherhood issues - poverty, third-world development, literacy, disease treatment and research - that were unlikely to spark shareholder or customer ire and reaction.

Issues like climate change, child-labor or same-sex marriage and benefits are fundamentally different, and likely to be divisive for shareholders, employees and customers alike. And yet, the CEOs are wading in.

In June, TD Bank CEO Ed Clark made headlines during WorldPride, an international summit on gay rights being held in Toronto. Clark spoke publicly about the need for increased support for the LGBT community. Most impressively, Clark did this not at a World Pride event, but at an event hosted by the Economic Club of Canada.

For several years now, Starbucks CEO Howard Schultz has been a leading critic of the partisan bickering the U.S. Congress. Schultz launched a public

awareness campaign urging Americans to reject partisan rhetoric and get more involved in the political system.

Schultz also persuaded 150 CEOs to cease corporate political donations to incumbent members of Congress to send a message that Americans wanted their elected officials to get more done.

And in his latest, and perhaps most controversial move for shareholders, Schultz spearheaded a plan to pay tuition for any employee that wants to finish college.

It seems that at a time when political solutions seem so impractical, increasingly corporate leaders are taking matters into their own hands. Certainly, there is no doubt that workers expect more from their employers, that the leaders of their organizations will use their power and influence to create real change.

In North America and Europe, this has prompted many CEOs to wade into what I like to call the big three social and political issues: same-sex marriage and benefits; climate change and environmental challenges; and diversity issues, including the need to get more women in leadership roles.

These are likely to be the issues that all

leaders will have to confront at one time or another – either at a shareholder meeting, or in an interview with a journalist. The old days where no one expected business leaders to weigh in on these issues, and so few questions were asked, are clearly over. Today, people will want to know where a CEO or other senior leader stands on these important issues.

Even so, this is still very unstable ground for any CEO. It’s important to remember that once a controversial position has been taken, it will be impossible to shake. Social media and the broader Internet will make sure that every comment a leader makes at a fundraising dinner or in a scrum with reporters, or in a memo to employees becomes part of your permanent bio.

It’s a bold, dynamic time when business leaders can contribute to meaningful societal change. But it’s also yet another leadership test, perhaps the most daunting to date.

Take time for my leadership gut check question: Are you clear where you stand on these important issues?

Dr. Vince Molinaro is the Managing Director, Leadership Solutions for Knightsbridge.

“in his latest, and perhaps most controversial move for shareholders, Schultz spearheaded a plan to pay tuition for any employee that wants to finish college.”

WHY 20-60% OF

YOUR NEW CUSTOMERS LEAVE

& HOW TO STOP IT Joey Coleman

A catastrophic plague has infected almost every business around the world - and yet most business owners and CEOs aren’t even aware that their business is sick.

Despite all of the time, money, and effort spent on marketing, prospecting, and acquisition, the average business loses 20-60% of their new customers within the First 100 Days of starting to work with them. This staggering

defection rate is rarely discussed, let alone addressed. While most companies spend the bulk of their sales and marketing budgets focused on customer acquisition, few if any put energy toward keeping the customers they’ve worked so hard to gain.

This plague on businesses of all shapes and sizes can be cured. The secret lies in creating remarkable

customer experiences. Extensive research, across a variety of industries, proves the experience you create in the First 100 Days is directly proportional to the ongoing success of your enterprise.

By creating a compelling and engaging experience early in the relationship, you can build a long-term connection with your customers that will benefit your business for years to come.

The Power of Experience In a world that is increasingly commoditized, where products and services are in a race to the bottom on price, where cost of manufacturing keeps dropping, and where 24/7 accessibility is the norm - there are very few things you can do to differentiate your offering from the competition.

The experience you create for your clients and customers is the one thing you have control over. It’s a huge opportunity to differentiate yourself

and be remarkable.

In the typical customer relationship, whether considering business-toconsumer or business-to-business enterprises, the bar for customer experience is lying on the ground.

Most customer interactions are not only plain and uninspiring, but they often leave a customer feeling unappreciated and even disenchanted. Despite the fact that as consumers, we often feel like we are a number in a database,

few business leaders are working to change that experience within their own customer base. Countless meetings and innumerable dollars are spent figuring out how to “fill the funnel” or “drive adoption” - but little time is spent thinking about how to maintain customer engagement after a sale/purchase. Shifting the focus from pre-purchase pursuit to postpurchase service dramatically impacts organizational behavior and profits.

It hinges on exploring the various interactions (or touchpoints) an organization has with a new customer

and then analyzing how to make each of those minute interactions more remarkable. Investigating ways

The First 100 Days The First 100 Days is a methodology, system, and practice for creating remarkable customer experiences.

18 | WINTER 2015

to simplify the experience, while maintaining a sense of emotional engagement, allows every interaction to contribute to an overall feeling of customer delight.

By focusing on the experience

customers are having in the First 100 Days, a company can set finite and achievable goals, in a comfortable timeframe (just three months), that have a significant impact on overall operations.

Designing customer interactions to

produce raving fans increases customer retention and as a result, the bottom line.

By decreasing customer defection by just 5%, the typical business can increase profits from 25-100%. (The Loyalty Effect, Frederick F. Reichheld).

An Onboarding Focus Onboarding - a fancy term for how you bring customers into relationship with your business - is defined as “inviting in new customers using a managed, structured series of contacts designed to create a welcoming experience.� While most companies engage in a haphazard handoff when a new customer transitions from the sales team to the account management team, the most

successful enterprises take calculated steps to ensure a smooth handoff that actually enhances the relationship.

By focusing on the way customers are introduced to your operations and holding their hand as they navigate the first few touchpoints, a company can create a welcoming experience where a customer feels taken care of and appreciated.

In designing these initial interactions, you have a variety of tools and technologies that can deepen the impact of an interaction. Six key methods of communication include: in person interactions, email, phone, direct mail, video, and gifts/presents. Most companies are using two, maybe three of these tools when interacting with customers in the First 100 Days.

In Person

Email

Phone Call

In person meetings allow for the deepest level of connection as nothing trumps looking another human being in the eye and sharing a moment in time. Taking the time to meet with new customers, thank them for their purchase, and walk them through using your product or service builds the strongest foundation for the relationship.

Email, when done properly, can advance the conversation and provide a new customer with insight about the onboarding process. Scalable and cost conscious, email can help build engagement with minimal time and financial investment.

A personal phone call after the purchase helps a customer feel appreciated early in the relationship and counters most feelings of buyer ’s remorse. In addition, it offers you the chance to ask if the customer has questions and address any objections or concerns they already have.

Mail

Video

Gifts/Presents

With more companies moving to email as their preferred communication tool, mailboxes around the world are increasingly less filled. A well-designed mail piece allows for a physical interaction, that if done properly continues the customer conversation in an unexpected medium.

Customized videos allow for a scalable interaction that feels unique and technologically advanced. A quick video - shot on a phone camera - creates a personal connection in a familiar and interactive format.

Targeted gifts and presents create a feeling of surprise and delight as a customer begins what everyone hopes is a long term relationship.

Timing these surprises throughout the relationship leaves the customer feeling appreciated while creating a regular surprise interaction.

Your First 100 Days Experience If you get the customer experience right in the First 100 Days, you can have a customer for life. By showing a new customer early on just how much your organization cares about

this new relationship, a company can build a solid foundation for future interactions. Instead of focusing on booking the next sale, a First 100 Days philosophy will put the energy

and attention where it can have the greatest impact on your business retaining relationships with existing clients and increasing the depth of the the interaction.

RETARGETING ADS Tom Fishburne Tom Fishburne

Hijacking implies that brands own the hashtag at the start.

Unlike traditional marketing messages, brands can’t script the narrative. Brands can spark conversations, but they can’t control them.”

Retargeting has taken the advertising world by storm. No longer do advertisers have to hope that an audience they want will be found at a particular publisher. They can chase audiences everywhere based on some signal of intent, independent of publishers. Not even Waldo can hide.

The problem of course is that ad stalking can be creepy. It’s creepy not just because the ads are persistent, it’s that the ads are tone-deaf. They don’t take any context into account.

Browse a red-and-white striped sweater and ads for that red-and-white striped sweater will stalk you across the Internet. Even if you already bought the sweater somewhere else. And even if you browsed the sweater on a lazy Sunday and are now reading a business article 20 | WINTER 2015

on a work day and aren’t in the mood to shop. The sweater ad won’t leave you alone.

As John Battelle put it recently: “Fast-forward to today, and programmatic has torn audience away from its contextual roots. Using programmatic tools, a media buyer can identify almost any audience segment they want with pinpoint precision – down to the exact cookie or data segment that matches a customer target. And for various reasons, including price, those audience members are targeted mainly on who they are, independently of what they are doing. Put another way, we buy audiences, but we aren’t buying the show they’re watching – we’re ignoring where that impression is served.

“This is nuts.

“After 20 years of chasing click through rates as a core metric for branded display advertising, we’re finally realizing that CTR is a race to the bottom. The ecosystem optimizes for clicks, and we lose the value of branding in the process.

We’re making a similar mistake with audience buying. Exercised without context as a key signal, it’s a bad habit, one we need to change if we’re going to build brands using programmatic media.”

Stalking audiences with retargeting is done in the name of more relevant advertising. But we’re in an awkward adolescent stage of understanding what messaging is truly relevant. To be really relevant, messaging will have to factor in context.

Advertisers will have to think outside the cookie.

CTIONABLE SUMMARY

Summary written by Rex Williams

COLLECTIVE GENIUS

by Linda Hill

When it comes to innovation, leadership matters, and it’s not leadership as commonly conceived today.’ Every person in your group, whether that’s a small team or a large corporation, contains a slice of genius. Your task as leader is to create a place where all those slices can be elicited, combined, and converted into collective genius.”

Collective Genius, page 7 You can find a lot of books about innovation. And you can find even more books about leadership. But you won’t find many about what it takes to lead innovation, a task that may seem easy enough on the surface, but in reality, requires a completely different mindset and strategy.

Collective Genius – The Art and

Practice of Leading Innovation articulates these new requirements of a leader. It provides the insights, guidance, and real life examples you need to create an environment where innovation happens.

Using in-depth research, study, and interviews, the authors, Linda A. Hill, Greg Brandeau, Emily Truelove, and Kent Lineback, uncover what really

happens in some of the most innovative companies. Each of the main points discussed by the authors is backed up by a case study in every chapter of the book (except one). Fascinating stories from Volkswagen, Pixar, Google, eBay and others will demonstrate how a leader’s role in innovation significantly differs from the traditional approach.

Unleash and harness Paradox: a statement or proposition that seems self-contradictory or absurd but in reality expresses a possible truth.

This is why leadership of innovation is so difficult. It requires thriving in the paradox of unleashing and harnessing.

Absurd, but true.

You need a place that unleashes ideas

22 | WINTER 2015

and options, a creative free-for-all where anything goes and everything is possible.

But, you also need a place that produces a final solution—just one answer that solves a specific problem.

This is the fundamental paradox at the core of leading innovation.

Ultimately, innovation is the result

of effective collaboration of diverse people. But collaboration requires give and take, discussion, and even heated contention. Based on their study, the authors identified six paradoxes related to the core unleash/harness paradox.

The unavoidable paradox at the heart of innovation is the need to unleash the talents of individuals and, in the end, to harness those talents in the form of a collective innovation that is useful to the organization.”

UNLEASH INDIVIDUAL SUPPORT LEARNING & DEVELOPMENT IMPROVISATION PATIENCE BOTTOM UP

The implications of these paradoxes explain why innovation is inherently difficult. Managing and balancing each of these paradoxes in context and at the right time is the tough work of the leader

and everyone involved. It’s not easy. But in their extensive research of innovative companies, the authors found these common themes consistently exhibited.

I’ll admit, I’m more of an ‘unleash’

HARNESS COLLECTIVE CONFRONTATION PERFORMANCE STRUCTURE URGENCY TOP DOWN

type of person, but I realize that the ‘harness’ is necessary to actually get things done. So my task is to do more harnessing in my life, but also realize its importance in my organization.

The wise leader knows that innovation is voluntary.”

Collective Genius, page 70

Increase trust with candor You can’t compel someone to care.

But unless they do, you won’t have an innovative environment.

How do you create caring creative employees? People need to be heard.

When people feel heard, it’s like a breath of fresh air. And once they feel that freedom, they’re ready to offer their

best ideas to solve whatever problems emerge. People united by a common purpose and willing to help each other is called a community. Rather than a place where “that’s not my job”, creating a community is one of the best strategies for developing a ‘willingness to innovate.’ It seems simple in concept, but is difficult

to execute. It takes pulling down the silos and organizational structure that creates false barriers between people, and creating a unifying purpose that is greater than any individual’s goals.

“Purpose – not the leader, authority, or power – is what creates and animates a community.” In order to work through

WINTER 2015 | 23

the hard tasks of innovation, such as conflict and tension, or navigate through the other paradoxes, the community needs a strong purpose –

the reason it exists, the ‘why’.

I plan to articulate and frequently communicate a more meaningful purpose to those around me that I

work with on various projects. I will also create a better sense of community by being helpful to others even when it’s not part of my job.

Create the ability to innovate A decade of observing innovative organizations has convinced us that the best leaders of innovation don’t see themselves as people with all the answers who set a direction for others to follow.”

Innovation requires certain organizational skills that can be encouraged by the leader. There are three capabilities that correspond to three key aspects of the innovation process: collaboration, discovery-based learning, and integrative decision making.

Creative abrasion is the ability to create a marketplace of ideas and evolve them through discourse, debate, and even conflict.

Creative agility is the ability to test and refine ideas through quick experiments, reflection, and adjustment.

It aligns with discovery-driven learning and emerges from consistent trial and error, often from efforts that don’t initially succeed.

Creative resolution is the ability to make integrative decisions. Instead of settling by compromise, innovative organizations are able to integrate

disparate and even opposing ideas into a single superior solution. It’s not easy, but the authors show how two teams at Google came up with a unique solution for storing massive amounts of data.

I’ll be working on creating these abilities for myself. And letting them infiltrate more significant projects that I have at work.

How do you plan to build the creative genius in your organization?

This book summary was written by Rex Williams on behalf of ActionableBooks.com

24 | WINTER 2015

HOW ADOBE GOT RID OF

TRADITIONAL PERFORMANCE REVIEWS Bob Sutton & Huggy Rao This is an excerpt from Scaling Up Excellence, which Huggy Rao and I published. Our research revealed that scaling is a problem of both more and less.

The best organizations construe it as more than a process of expanding their reach to more people and places. They treat scaling as “a subtraction game”, a neverending hunt for unnecessary sources of friction and frustration. Twitter’s Executive Vice-President of Engineering Chris Fry emphasizes that the best leaders and teams use the hierarchy to “defeat” dysfunctional bureaucracy as organizations grow and age – to add constraints and processes that help people do their work, but don’t make them feel as if they are walking through muck.

In this spirit, Huggy and I are especially taken with what Adobe has taken to remove and replace one of the most widely used (and questionable) of organizational practices.

Renowned American novelist Ernest Hemingway said that the most essential gift for a good writer is “a built-in shockproof shit detector,” the ability to spot bad or unnecessary text, the skill to fix what is salvageable, and the will to throw away what is beyond repair or unnecessary. Leaders and teams that spread excellence act the same way, ruthlessly spotting and removing crummy or useless rules, traditions,

tools, and roles that clog up the works and cloud people’s minds.

One of our favorite examples of such subtraction was implemented by Adobe’s senior leaders in 2012 – a change that affected all 11,000 employees. Most LinkedIn readers know that Adobe produces software including Photoshop, Acrobat, Creative Cloud, and the Digital Marketing Suite. Adobe killed one of the most sacred of corporate cows: traditional yearly performance reviews.

Management experts have questioned the value of such reviews for decades.

Quality guru W. Edwards Deming blasted away: “It nourishes shortterm performance, annihilates longterm planning, builds fear, demolishes teamwork, nourishes rivalry and politics.” UCLA’s Sam Culbert called them bogus and urged companies to abolish them. We sometimes joke that, if the performance review (as usually done) was a drug, it wouldn’t be approved by the U.S. Food and Drug Administration because it is so ineffective and has so many vile side effects.

Despite such blistering critiques, Adobe has been one of the few companies with the guts and gumption to abandon them: in 2012, they moved from yearly performance rankings to frequent “check-ins” where managers provide employees targeted coaching

and advice. There is no prescribed format or frequency for these conversations, and managers don’t complete any forms or use any technologies to guide or document what happens during such conversations. They are simply expected to have regular check-ins to convey what is expected of employees, give and get feedback, and help employees with their growth and development plans.

The aim is to give people information when they need it rather than months after teachable moments have passed.

Once a year, managers make adjustments in employee compensation. Managers have far more discretion over such decisions than in the past: they have nearly complete authority to allocate their budget among their charges as they see fit. In addition, employees are now compensated based on how well they have met their goals--forced rankings have been abolished. As part of the rollout, managers were trained in the nuances of giving and receiving feedback and other difficult conversations through lectures and role playing, where they practiced challenging scenarios.

Donna Morris, Adobe’s senior vice president for People and Places, explained the motivation for these changes to us. Adobe’s leaders decided that the all-too-familiar drawbacks of their old evaluation system just weren’t

WINTER 2015 | 25

“without trying subtraction experiments such as this, organizations risk becoming imprisoned by faulty assumptions and destructive practices even when there is a better way.” acceptable (that is her picture, to the left) The complex infrastructure required for supporting the system and the time it extracted from Adobe’s busy people every January and February were bad enough. Morris’ team calculated that annual reviews required 80,000 hours of time from the 2000 managers at Adobe each year, the equivalent of 40 full-time employees. After all that effort, internal surveys revealed that employees felt less inspired and motivated afterwards— and turnover increased. Morris and her colleagues decided it was time for a disruptive change. She emphasized that the new “check-in” system where managers and direct reports have regular conversations about performance and other issues (instead of going through a formal process once a year) is part of a broader initiative to instill stronger accountability throughout Adobe.

Managers, for example, are now given far more say in their people’s salaries and merit increases. Adobe’s aim is to give managers the skills, authority, and responsibility so they can act much as if they were running their own businesses. Accountability is amplified by an ongoing “pulse survey” given to a random sample of Adobe employees: it includes measures of how well each manager sets expectations, gives and receives feedback, and helps people with their Peter Aceto, President and Chief growth and development. In addition, Executive Officer of ING DIRECT Canada, Morris emphasized that one of her is a passionate leader and committed main goals was to subtract technology savings advocate. His career with ING from the feedback process—she didn’t DIRECT began in Canada more than a want managers to hide behind forms decade ago as a founding member of and computers. Instead, she wanted its senior leadership team. managers to have candid and unstitled 26 | WINTER 2015

conversations with the people they led.

Morris gave us an update just before Scaling Up Excellence went to press late last year. Adobe’s bold move seems to be working. One employee reported to Morris’s team that a feeling of relief has spread throughout the company because the old annual review system was “a soul-less and soul crushing exercise.”

The pulse survey indicates that most Adobe managers and employees find the new system to be less cumbersome and more effective than the old stackranking system. For example, 78% of employees report that their manager is open to feedback from them, a sizeable improvement over past surveys. As Morris and her team had hoped, by eliminating a system that required managers to discuss performance issues with employees only once a year, and moving to one that involves regular check-ins, strong managers are honing their skills. Equally important, many weak managers have learned how to talk with their direct reports about what is expected of them, how they are performing, and what they can do to become more effective.

The shift in Adobe’s attrition is especially telling. Since the new system was implemented, involuntary departures have increased by 50%: this is because, as Morris explained, the new system requires executives and managers to have regular “tough discussions” with employees who are struggling with performance issues— rather than putting them off until the next performance review cycle comes around. In contrast, voluntary attrition at Adobe has dropped 30% since the

“check-ins” were introduced; not only that, of those employees who opt to leave the company, a higher percentage of them are “non-regrettable” departures.

In short, Adobe’s subtraction experiment appears to be having the desired effect. It is reducing unnecessary cognitive load, while at the same time, nudging managers to engage more often and more candidly with direct reports to help them develop their skills and plan their careers. The new system amplifies also the feeling that “I own the place, and the place owns me” – because it places the onus on managers and their employees to make regular adjustments that improve individual and team performance, It also bolsters accountability because managers have far more responsibility for setting employee compensation than under the old system. As Morris explained, the old excuse that “you deserve a bigger raise, but HR wouldn’t let me” doesn’t work any longer.

Despite this promising start, even if this experiment does not succeed, we applaud Morris and her colleagues for summoning the courage to kill this maligned—yet somehow still sacred— practice. In the end, check-ins may prove worse than traditional reviews. But without trying subtraction experiments such as this, organizations risk becoming imprisoned by faulty assumptions and destructive practices even when there is a better way.

I am a Stanford Professor and co-author (with Huggy Rao) of Scaling Up Excellence: Getting to More without Settling for Less.

You can learn more about my ideas and writing from my LinkedIn Influencer posts and Work Matters blog.

Why Girls Get Called

BOSSY and How to Avoid It

Adam Grant POWER LIES IN HOLDING A FORMAL POSITION OF AUTHORITY OR CONTROLLING IMPORTANT RESOURCES. STATUS INVOLVES BEING RESPECTED OR ADMIRED. Many girls want to lead, only to be discouraged by criticism for taking the reins. By launching a campaign to ban the word “bossy,” Sheryl Sandberg is planting important seeds for many more women to become leaders. For these seeds to blossom, we need to understand the behaviors that lead people to brand girls as bossy.

As my daughters learned when we read the classic Little Miss Bossy book

by Roger Hargreaves, girls get pegged as bossy when they order people around.

Yet we don’t label every girl who issues commands and exercises authority as bossy. To make sense of bossiness, we need to tease apart two fundamental aspects of social hierarchy that are often lumped together: power and status.

Power lies in holding a formal position of authority or controlling important resources. Status involves being respected or admired.

We react very differently when power is exercised by high-status and

low-status people. In a pair of clever experiments, researchers Alison Fragale, Jennifer Overbeck, and Maggie Neale show that when people with high status also possess power, we perceive them as dominant, but also warm. We hold them in high regard, so we’re willing to follow their commands. When the same commands come from people who lack status, we judge them as dominant and

cold. Since they haven’t earned our respect, they don’t have the right to tell us what to do.

When young women get called bossy, it’s often because they’re trying to exercise power without status. It’s not a problem that they’re being dominant; the backlash arises because they’re overstepping their status.

If we want girls to receive positive WINTER 2015 | 27

reinforcement for early acts of leadership, let’s discourage bossy behavior along with banning bossy labels. That means teaching girls to engage in behaviors that earn admiration before they assert their authority.

What are those behaviors? After decades of research, we know that there are two paths to earning status: competence and caring. We look up to people who are capable and concerned about others. We follow people once they’ve demonstrated that they have unique skills and will use them for the benefit of the group.

These principles apply to boys and men, not only girls and women. In Give and Take, I cover extensive evidence that the men and women who gain the most status are those who are giving and generous. By helping others, sharing credit, and showing an interest in others’ opinions, men and women alike gain respect. Teammates end up rooting for them, instead of gunning for them.

Right now, due to the gender stereotypes that haven’t yet evaporated, girls do seem to get penalized more than boys for exercising power. It’s patently unfair, and to course-correct, Sandberg is fond of sharing a provocative and amusing recommendation from CBS anchor Norah O’Donnell: “Next time you hear a girl called bossy, take a deep breath and say, ‘That girl’s not bossy. She has executive leadership skills.’”

I love this reframe. I want to make sure it gets applied to the right actions, because some “bossy” behaviors fail the test of executive leadership skills. Great leaders begin by earning status through their contributions, and only then assert their authority.

This pattern is exemplified in Sandberg’s own trajectory. When she gave her TED talk and published Lean In, she became the authoritative leader of the 28 | WINTER 2015

That girl’s not bossy. She has executive leadership skills.” women’s leadership movement. It is telling that she embraced this leadership role after she had proven her competence and contributions as a woman in leadership.

On the basis of her extraordinary achievements as the COO of Facebook, VP at Google, and chief of staff for the U.S. Secretary of the Treasury, she gained the admiration of a wide audience who was eager to listen and follow her lead.

Let’s teach girls—and boys—to follow Sandberg’s inspiring example. By

demonstrating competence and concern for others, they’ll earn the esteem to step up into positions of power. Then, when they lean in, others will be cheering them on.

Adam is a Wharton professor and the author of Give and Take: Why Helping Others Drives Our Success, a New York Times bestseller that debuts in paperback on March 25. You can follow him on Twitter @AdamMGrant and sign up for his free newsletter at www.giveandtake.com.

BUSYNESS

IS NO BADGE OF HONOR

Peter Aceto

I know you are such a busy person, thank you sooo much for making the time to meet with me.” Ever hear someone tell you that? I do, and frankly I think it’s silly. Of course I understand that it is meant well, and that it comes from a good place but I’d like to challenge that particular place a bit.”

Being busy is not a badge of honor.

My choice to make time to meet with someone is also not charitable.

If I am meeting with you it is likely because it is necessary, strategic or certainly important. It is part of my responsibilities as a leader.

We talk so much about “being busy” as something that separates us from the rest. As if my time is more valuable than yours. We use “being busy” as an excuse to lean on when things don’t go the way we want. I’m too busy to go to the gym, I’m too busy to take a day off, or I’m too busy to connect in a meaningful way with someone on the team. Being busy is nothing to be rewarded or be proud of.

Here’s the truth: we all make time for the things we deem important. So what have you decided is important in your life? That’s right. What are you doing to make your life more meaningful? What do you do to regain focus, stay alert and active in the

decisions you make about your life?

This argument will now take a turn you may not have expected. Everyone requires time to recharge and renew. It brings energy and focus that you need to succeed. If you don’t see the value in reflection, you run the risk of harming how you communicate and connect with your colleagues and loved ones.

I’ve seen the negative effects of being busy, of burnout and as much of a concern as that is, it is not as bad as spiraling down a dangerous slope, making poor choices and losing who you are as a person.

Reflection time allows you to step back, step away, reframe and change your perspective. From reflection often comes great advancement – like the very important notion of being in the driver seat of our own life. Even I, the so-called “busy” CEO allow myself that time because I know the positive impact that it has on my energy, my family, my

teammates and my leadership.

I love Arianna Huffington’s perspective on life in her new book Thrive. Here’s someone who we all know must be incredibly busy! But she makes the most compelling case for the need to redefine what it means to be successful today. “The third metric,” as she calls it, to redefining success and creating a life of well-being, wisdom, and wonder, a life outside power and money. Imagine that! A life, where we put value on things like rest, sleep, quality of relationships, which – ironically – will absolutely lead to a successful career.

I realize that it may be unrealistic for us to be reflective, self-aware, and incontrol at all times. But that is precisely why defining our priorities, and why building on the skill of being reflective is absolutely crucial – so we can lean on it and know how to use it, when “busy” gets in the way of our lives.

Peter Aceto is the President and CEO of Tangerine. Peter publishes a bi-monthly blog on leadership, business transformation, corporate culture, innovation and customer experience. Follow Peter on Twitter @PeterAceto.

30 | WINTER 2015

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CHALLENGING OURSELVES TO

CHANGE WORLD THE

By Jason Hermitage

When I was a kid, I loved playing with Lego. I went through it by the boxful, dreaming up new things to build.

I am sure I didn’t realize it at the time, but looking back, that was probably the start of the path that led me to Microsoft, a company that continues to dream up how to build new things and change the world.

32 | WINTER 2015

I originally thought I would follow in my father’s footsteps and be an entrepreneur.

Yet I started my career as a lawyer, inspired during a high school visit to the Supreme Court of Canada, where I met many famous Canadian lawyers.

And while I did love the practice of law, I realized I was missing a creative element in my life.

That is when I joined Microsoft. My first role with the company was at our corporate headquarters in Redmond, Washington, as part of the global launch team for Windows Server 2003. My second day on the job, my boss’ boss said “welcome aboard, I want you to train 25,000 IT professionals on our new product over the next four months.”

In the end, it actually took us five months to reach 30,000 IT specialists.

And I learned two things. First, think big. Second, enabling customers to touch and use the product is what sold it.

They realized how they could save their

organization money and make their own jobs better – and that directly translated into early adoption, sales and market success.

The experience taught me something that has become a cornerstone of my career: you first have to really put yourself in your customers’ shoes.

Whether you’re dealing with a CEO, CIO or CMO, you have to listen carefully and understand how you can help them solve the problem or seize a new opportunity. Build an innovative solution that addresses their needs better than anybody else, and you’ve got a loyal new customer. And you need to continue to earn that loyalty every day.

Every day I ask my team, what can we do to accelerate our impact on the world? We discuss innovative ways to enable SMBs to use the cloud to rapidly expand their business, support enterprises to achieve faster time-tomarket with new products or services,

and help government prepare students for the workforce of the future.

In the past two years, my work with Microsoft has taken me to 42 countries and I have been fortunate to have had the opportunity to see first-hand how technology and great ideas are enabling success.

In Latin America, I had the chance to meet two developers with a great idea for a Facebook app. They built it on Microsoft Azure which gave them access to unlimited servers in the cloud. Their business idea went viral – from 5,000 users to 50,000 to 5,000,000 in less than a year! Before the cloud, they would never have succeeded because they would never have been able to meet the demand.

That’s the power of the cloud – unlimited capacity, no upfront capital expenditures and a pay-as-you-go model.

And there are many more possibilities to come. For example, Microsoft Research has pioneered a way deliver

internet connectivity leveraging unused TV spectrum (yep very technical).

So imagine being able to Skype with children in a remote village in Africa using a laptop powered by solar energy.

I can tell you, it’s pretty amazing.

We live in remarkable times, and it’s an incredible period to be in technology. There’s a lot more on the

horizon in the areas of mobility, cloud, big data, machine learning and voice recognition to name just a few. Creative use of technology is literally changing the world, and we continue to build new things never before imagined.

If you have kids, take my advice and give them some Lego. You never know where it might lead.

Creative use of technology is literally changing the world, and we continue to build new things never before imagined.”

Jason Hermitage is Vice-President of Marketing and Operations for Microsoft Canada.

WINTER 2015 | 33

Help salespeople deliver amazing customer experiences to close more deals, faster The way people buy has changed…

57%

9 of 10

business buyers say they’ll find you when they are ready to buy IDG Enterprise, “Lead Generation Marketing Trends”, 2013

Customers are 57% through the buying process before they talk to you CEB, “The New High Performer Playbook”, 2012

…shouldn’t you change the way you sell?

3% vs.

67% 73%

3% of cold calls vs. 67% of seconddegree LinkedIn referrals result in appointments Microsoft, “The Dynamic Sales Team”, 2013

of sales people using social media to sell outperform those who don’t Sales Centered Guy Consulting, A Sales Guy Consulting andASocial Selling “Social Sales Quota”, 2012 “Social Media Media and Sales

Microsoft Sales Productivity Solution Microsoft provides a single user experience with Microsoft Dynamics CRM Online and its interoperability with Microsoft Office 365 and Power BI for Office 365.

Sales reps can go to one place for all of their tasks, like viewing sales leads, researching companies, finding social connections, communicating with prospects, reviewing sales insights, and creating sales proposals.

Eliminate application-flipping by giving sales reps contextual information in a simple user experience.

 Outcome-driven user experience drives adoption  Business and social data power insights  Easy collaboration wherever you are

Help salespeople deliver amazing customer experiences to close more deals, faster

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SMARTER NEGOTIATION 10 Key Elements of a Total Compensation Package “KFC’s salary offer is $58,000 and Greyhound’s offer is $64,000. How can KFC be so silly and offer me less than I’m making now, and less than Greyhound!!”

The numbers and companies mentioned are fictitious, but it is a

discussion we are all a part of from time to time – on either end of it.

I believe that tempting as it might be, because of its abject simplicity, comparing base salaries is a terrible idea. Yes, base salary is a very important part of our compensation. But it is just

Avinash Kaushik

one part. When we compare job offers, as we surely will given our new year resolutions (!), the number to focus on is our total compensation.

There are ten elements that comprise a typical compensation package. They are:

1. Base Salary 2. Annual/Quarterly Bonus 3. Other bonus (Peer, boss, outstanding non-normal accomplishments) 4. Stock options 5. Stock units (Hurray!)

6. 401k contribution (Pre-tax and Roth) 7. Health & Wellness (Medical, dental, vision, employee assistance program) 8. Life & Accident Insurance (Basic life, accidental death and dismemberment, long term disability, survivor income benefit) 9. Other Insurance (Travel, legal) 10. Perks (Food, internet services, gym memberships, cell phone and service, company bus/train/plane, massages, company discounts, electric car chargers, university/ ongoing education funding, etc.)

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Depending on the size of the company, the type of industry, or even geographic area, not all of these elements might apply to your package. It is still important that you are aware of them.

For some senior positions, there might be even more elements.

When you get a job offer you’ll typically get base salary and bonus target. Thank the HR person. Then,

ask for a bit more information about the other eight elements above.

Ask what performance determines allocation of stock options and units.

Check if the company 401k match maxes out at $8,750 or $2,500. Inquire what the health plan per month cost is, what the typical co-pay for doctor visits and prescriptions is and what’s the max out of pocket payment for

medical expenses. Seek insights into perks.

S o m e c o m p a n i e s a re c a g e y about these things, and many HR professionals not used to providing information. Don’t push them too much. Be polite, get as much as you can.

Then throw it all into a spreadsheet, press Insert Chart, and boom!

Questions like these will take some of the superficiality out of the decision, and help you arrive at the optimal answer.

Perks Benefits Equity Bonuses Base Pay Company X It turns out base pay is important, but it might also not be that the most important thing.

One purpose of this exercise is to get you to collect all the information you need.

Company Z might not look as attractive now when compared to just looking at base pay plus bonus.

Another hidden agenda I have is to push you to think in a much more sophisticated manner about the job you are taking.

For example, what are the future pros-

Company Y

pects of this company? The value of your equity depends on that. Have you look at the last five years of stock performance?

Or, do you understand what performance will get you that bonus?

Hearing that the bonus target is 40% sounds awesome, but what if just 1% of the company qualifies for full bonus? Would your skills put you in that bucket?

Or, does a company that nickels and dimes their company health insurance program the type of company culture you want to be a part of? I’m not saying

Company Z you should not, I’m saying you should ask yourself that question because you’ll spend 5x more time in that culture than with your family.

Questions like these will take some of the superficiality out of the decision, and help you arrive at the optimal answer.

Even if you take Company Z’s offer, you’ll be much more aware of why you made the decision you did.

I wish you all the best. May every offer you get have all ten elements in it, and may they all be gigantic!

MAKING CHARITY PAY Michael I. Norton & Jill Avery

TOMS Shoes - One for One Charity

Companies are increasingly experimenting with the use of philanthropy to enhance consumer loyalty, brand awareness, and sales.

But even highly creative approaches that garner a lot of buzz often fall short of sales goals, leading many companies to conclude, prematurely, that charity doesn’t pay. Our research, in contrast, suggests that charity can drive engagement—when done right.

A cautionary tale: Pepsi decided 40 | WINTER 2015

to forgo advertising in the 2010 Super Bowl and instead put the money—$20 million—toward social causes through a program called the Pepsi Refresh Project.

It posted consumer-generated initiatives such as school renovations and park restorations on a dedicated website and funded them according to how many votes they received. The effort made a big splash on social media—more votes were cast for Pepsi Refresh projects than in the 2008 U.S. presidential election—

but sales of Pepsi products actually declined.

What went wrong? Pepsi failed to align what we call the three Cs of consumer philanthropy. Put simply, companies need to choose causes that resonate with customers in a way that drives sales. The lack of any connection between Pepsi Refresh causes and a product purchase meant the link between the customer and the company was missing. Lots of the people who

responded to the effort were not Pepsi consumers or even likely prospects.

An experiment we recently conducted shows the importance of synergy among the three Cs. The nonprofit DonorsChoose lets public school teachers post projects—buying microscopes for their students, say—that consumers can fund directly. In collaboration with Crate and Barrel, we sent $25 gift cards that could be put toward any project on the DonorsChoose website to thousands of the retailer’s customers and then compared their subsequent purchases and their attitudes about the store with those of customers who did not receive gift cards. The recipients not only came back to Crate and Barrel sooner to make another purchase but also reported more positive feelings toward the retailer.

This campaign succeeded because the

three Cs were tightly linked: Crate and Barrel customers are interested in home improvement, and DonorsChoose is all about school improvement.

We suggest three strategies for managers considering consumer philanthropy. First, don’t make project decisions according to causes the CEO cares about (a common practice in corporate philanthropy). Instead, consider causes your customers care about. And don’t base that judgment on what they have “liked” on Facebook; look for causes to which they have already given time and money. Those are the ones that will inspire them to act.

Second, be clear about how a purchase will benefit the cause. Customers of Toms Shoes know that if they buy a pair of shoes, the company will send a pair to someone in need. So, faced with spending

the same amount to get two pairs from Toms (one of which is donated) or one pair from a competitor, they see the value in the first choice.

Third, conduct careful experiments.

Many people assumed that the Pepsi Refresh initiative caused Pepsi’s poor sales. But a host of other factors, including aggressive advertising by Coca-Cola, may have been responsible.

When feasible, assign some customers to the charitable promotion and others to a control condition, as we did. That will give you the best opportunity to gauge the effect of doing good.

Michael I. Norton is a professor at Harvard Business School and a coauthor of Happy Money (Simon & Schuster, 2013).

Jill Avery is a senior lecturer at HBS. *This article originally appeared in the Harvard Business Review.

WINTER 2015 | 41

THE

LIST

12 BOOKS ON OUR R ADAR

DIRECT MAIL WAS A KEY MARKETING TOOL FOR PRINCESS AUTO. Trevor Rempel,

Marketing Analyst, Princess Auto Ltd.

“Those who redeemed the offer ended up spending close to three times their normal spend.”

NEARLY

THE SITUATION:

customer spending

THE SOLUTION:

3X MORE

Princess Auto is a retailer that specializes in equipment, tools and more.

They wanted to promote a special sales event to drive purchase throughout the entire store.

Princess Auto chose to send Addressed AdmailTM postcards with Canada Post to create a sense of urgency for their two-week sales event.

THE BOTTOM LINE:

Customers who responded spent 300 percent more than usual. For every dollar Princess Auto put into their postcard campaign, they got more than six back in sales.

USE THE POWER OF DIRECT MAIL TO GROW YOUR BUSINESS. To see how other businesses have grown with Direct Mail, visit canadapost.ca/Growth

Addressed AdmailTM is a trademark of Canada Post Corporation.

Create

WORD-OF-MOUTH-WORTHY

MOMENTS WITH CUSTOMERS

Jackie Huba

Every customer interaction is an opportunity to not just make a customer happy but to create a moment worth talking about. Kick your usual standardized processes around customer engagement to the curb and get creative! When you surprise and delight customers, they can’t help but talk about it. The folks at Dell understand this and recently shared their #DellLoves program with me.

Susie Gidseg, Global Social Media Manager for Dell, explained that the company started creating short, personalized videos to thank customers 44 | WINTER 2015

for their comments about Dell products on Twitter, blogs, and other social media properties. No two videos are alike.

Recipients are always mentioned by name or Twitter handle. The idea here is that a great customer experience extends beyond the product itself. The #DellLove program started with a small group of people in Dell’s Social Outreach Services team with the simple but important act of reaching out to satisfied customers and thanking them. Susie told me: “As you can imagine, we surprised and delighted many of our customers with our videos as they weren’t anticipating the direct

response (let alone video) from our team.

The videos also helped place a face on the social team here at Dell, making that more personal connection. With the successful pilot of this program, we then set out to increase views and reach more of our customers on Twitter, taking the program to the next level.”

Create Word-of-Mouth-Worthy Moments With Customers Every customer interaction is an opportunity to not just make a customer happy but to create a moment worth talking about. Kick your usual standardized processes around customer

engagement to the curb and get creative!

When you surprise and delight customers, they can’t help but talk about it. The folks at Dell understand this and recently shared their #DellLoves program with me.

Susie Gidseg, Global Social Media Manager for Dell, explained that the company started creating short, personalized videos to thank customers for their comments about Dell products on Twitter, blogs, and other social media properties. No two videos are alike.

Recipients are always mentioned by name or Twitter handle. The idea here is

that a great customer experience extends beyond the product itself. The #DellLove program started with a small group of people in Dell’s Social Outreach Services team with the simple but important act of reaching out to satisfied customers and thanking them. Susie told me: “As you can imagine, we surprised and delighted many of our customers with our videos as they weren’t anticipating the direct response (let alone video) from our team.

The videos also helped place a face on the social team here at Dell, making that more personal connection. With the

successful pilot of this program, we then set out to increase views and reach more of our customers on Twitter, taking the program to the next level.”

Below is an example of #DellLove outreach to a customer.

Now, the #DellLove series is taped weekly by a small group of volunteers who film the personalized videos, not only thanking customers but speaking about Dell products, sharing tips and tricks for a great experience, etc. The videos have led to an increase in positive sentiment, a high percentage of RT’s

and Replies, and an average reach of 6-7 million per month. Since #DellLove started in 2012, the team has filmed over 500 thank you videos. They’ve also started sending out postcards and #DellLove t-shirts to especially excited fans. Says Susie, “Through the program, customers are able to share their #DellLove with the world and we’re able to send that love right back to them.”

Warby Parker, the online eyeglass retailer, is using this same outreach technique to surprise and delight customers who ask them customer service questions on Twitter. The

company found it difficult to answer complicated questions, such as those about prescriptions, given Twitter ’s 140-character limit. In order to give customers a substantive response, the company’s social media team shot videos of themselves answering questions, uploaded the videos to YouTube and replyed to customer’s tweets with a link to the video. The company found that customer service tweets that included a video were retweeted 65 times more than other tweets from the company.

“Customers were so blown away that we are going to these lengths to meet their

needs that they tweet about it and tell dozens of other people,” Warby Parker co-founder Dave Gilboa told Jordy Leiser of StellaService.

Are you monitoring online chatter to see what your customers are saying about you? Can you find fun and interesting ways to thank them or connect with them that are worth talking about?

Jackie Huba is a customer loyalty expert and bestselling author of three books on loyalty including her most recent book, Monster Loyalty: How Lady Gaga Turns Followers into Fanatics. More on Jackie at jackiehuba.com.

WINTER 2015 | 45

WE

DON’T NEED MORE

RELATIONSHIPS John Jantsch

Okay, I know that title of this article may seem like a harsh way to make a point, but things have changed a bit.

There was a time when marketing was about creating the message and sales was all about creating relationships

– you got to know a prospect, maybe a lunch, then golf and now we can talk business.

But, who has time for that kind of thing anymore. I mean, now we’ve got 25,439 Twitter relationships we have to

get to and please, you just left another voice mail?

I’m not saying that human contact and relationship building isn’t essential, I’m saying that things have flipped around to a large extent.

MAKE A BUSINESS CASE FIRST Today you must prove your value, make a business case for why a prospect should take your call, email or connection request, before you earn the permission to go deeper.

Test this out – did you wake up today with the hope that you would meet a new entrepreneur or salesperson hoping to come tell you about their products. I’m guessing no, but you may have woken up

today and thought, “I sure need to figure out how to get more from my marketing efforts,” or something of that sort.

So now you might actually be receptive to an article written by someone that addresses that very subject. And upon reading that article you might start thinking – “I wonder what it would be like if this person consulted with our business?”

Perhaps your next move might be to Google the author of that piece and jump on over to LinkedIn to see what others are saying about her.

You may indeed move to email to invite her to answer a specific question you have and that may very well lead to a meeting where you walk through a case study of a business just like yours getting the precise result you’re hoping for.

THEN A RELATIONSHIP CAN HAPPEN At this point you may be convinced that this person has the experience and talent to help your meet your objectives.

Once that conclusion is drawn you may become very interested in a full blown relationship where other elements of your business are on the table, things unrelated to your business are discussed and ultimately your hopes and dreams can be explored.

Maybe that point in a relationship never forms, but the experience and 46 | WINTER 2015

relationship that grows from that experience is what makes you stay and what gets you talking.

Relationships for relationship sake or, worse, as a tool to convince someone to buy from you, are a thing of the past and have little place in a world driven by technology connection points.

You must work to earn the opportunity to connect by providing business value early on. You must figure out how to connect others, share insights, prove that

time spent with you will be worth it.

I know that sounds harsh, but I believe it’s a reality. Unless and until you build such a strong personal brand that people want to spend time with you for the sake of doing so, you need to think in terms of delivering value first and building relationship as a product of that.

Personal relationships in business matter, perhaps as much as ever, but they come as a result of building trust by making a solid business case first.

www.pwc.com/ca

Leading through change

Millenials are redefining the global workplace: the most educated, tech-savvy generation in history — and with significantly different expectations than their predecessors. As the boomer generation exits the workforce, competitive advantage will increasingly depend on understanding what motivates your people, and making that work for your business.

How are you planning to lead through change and get ahead of your competition? © 2014 PricewaterhouseCoopers LLP, an Ontario limited liability partnership. All rights reserved.

LESSONS FROM THE

SPORTS PAGE THE ULTIMATE PERFORMANCE-ENHANCING DRUGS

ARIANNA HUFFINGTON

The fundamental flaw at the heart of our misguided definition of success is the belief that overworking is the route to high performance and exceptional results.

One easy way to see the folly of this belief is to look at the world of sports, where performance is objectively quantified and measurable. The sports world, the source of many metaphors in the business world—“ home run,” “slam dunk,” “dropping the ball,” “heavy hitters,” “step up to the plate,” and so forth—is, 48 | WINTER 2015

in fact, way ahead of the business world in its thinking about productivity and burnout.

Top athletes are all about results. And because sports are endlessly quantifiable, it’s often very easy to measure just what does and doesn’t work. The tough, hardhitting world of elite sports is increasingly embracing meditation, yoga, mindfulness, enough sleep, and napping precisely because athletes and coaches realize that they work. And for the shrinking pool of

doubters, there is perhaps no better way to see the tangible effects of mindfulness and stress-reduction tools on performance than in the world of sports.

One of the most interesting—and widely cited—studies came out of Stanford. Over ten years ago, Cheri Mah, a researcher at the Stanford Sleep Disorders Clinic, was looking into the impact of sleep on the brain. Several of the subjects in her research were on the Stanford swim team. They revealed to

And for the shrinking pool of doubters, there is perhaps no better way to see the tangible effects of mindfulness and stress-reduction tools on performance than in the world of sports.”

Mah that during the portions of the test when they were asked to get more sleep they swam better and set personal bests.

So Mah set out to see how strong the connection was between increased sleep and increased performance.

Some early studies—using swimmers, football players, and tennis players—had pointed to a strong connection. So Mah ran a bigger study, which, as ESPN’s Peter Keating writes, “jolted the world of sports analytics by essentially showing that you can get safe, legal HGH [human growth hormone] just by shutting off the lights.”

Over three seasons, Mah had eleven Stanford basketball players keep a normal schedule for a few weeks and then, for five to seven weeks, had them take naps, eat carefully, and try to get ten hours of sleep a night. All eleven players saw improvements in their performance.

Three-point shooting went up 9.2 percent.

Free throws were up 9 percent. Not only did on-court performance improve, but players said their moods were lifted and that they generally felt less fatigued.

“What these findings suggest is that these athletes were operating at a sub-optimal level,” Mah said. “They’d accumulated a sleep debt. ... It’s not that they couldn’t function—they were doing fine—but that they might not have been at their full potential.”

And all over the sports world, new practices are being introduced:

In 2005, the U.S. Olympic Committee, in consultation with sleep expert Mark Rosekind, upgraded the rooms at its Colorado Springs training center. The renovation consisted of better mattresses, blackout curtains, and encouragement for the athletes to aim for nine or ten hours of sleep. And many have taken the advice to heart. “Sleep is huge in my sport,” says Olympic marathoner Ryan Hall. “Recovery is the limiting factor, not my ability to run hard. I typically sleep about eight to nine hours a night but then I make sure to schedule 90 minute ‘business meetings’— aka naps— into my day for an afternoon rest.”

The Dallas Mavericks partnered with Fatigue Science from Vancouver to monitor players’ sleep and compare it with their on-court performance using a wristband device. Fatigue Science founder Pat Byrne explained the logic: “If a player is sleeping six hours a night and says, ‘I feel fine,’ we can actually say, ‘We can make your reaction time better if you’re sleeping eight hours.’ We can prove it to you, we can show you.”

Los Angeles Lakers superstar Kobe Bryant will often linger at the team hotel before a game to get more sleep.

He’s also done meditation—a practice brought in by former coach Phil Jackson.

Jackson also taught the concept of “one

breath, one mind” to his players and had them engage in exercises such as a day of silence. “I approached it with mindfulness,” he told Oprah. “As much as we pump iron and we run to build our strength up, we need to build our mental strength up ... so we can focus ... so we can be in concert with one another.”

When Michael Jordan was the star of the Chicago Bulls, the team worked with meditation teacher George Mumford.

“When we are in the moment and absorbed with the activity, we play our best,” Mumford explained. “That happens once in a while, but it happens more often if we learn how to be more mindful.” And a video of four-time NBA MVP LeBron James meditating during a timeout became a hit on YouTube.

Former Miami Dolphins running back Ricky Williams used to meditate before every game, and later ended up teaching a class on meditation at Nova Southeastern University in Florida.

“This is my passion,” he said. “I think a lot of people are so used to being stressed, they don’t realize they’re stressed. And I was one of those people.”

Tennis great Ivan Lendl used mental exercises to deepen his concentration. He would schedule downtime for relaxing and recharging often by taking naps.

WINTER 2015 | 49

Since Lendl became Andy Murray’s coach in 2012, the four-time grand slam runner-up won the U.S. Open in 2012 and Wimbledon in 2013. Charlie Rose, in an interview with Murray, described what it’s like watching Murray and other great pro players: “You see the ball coming off the racket ... it almost looks like slow motion.”

What a great image to hold in mind: a performer at the top of his game— rested, recharged, and focused; time slowing down, the ball moving in slow motion, allowing him to make the best decision and execute it. I have found that mindfulness and stress-reduction techniques do the exact same thing for the rest of us. In a rushed, harried, stressedout state, the onslaught of what we have to do can go by in a jumbled blur. But rested and focused, what’s coming next appears to slow down, allowing us to manage it with calm and confidence.

As Tony Schwartz, founder of the Energy Project, says, with exercise, it’s during rest and downtime that muscle growth occurs. To achieve peak physical fitness, we push ourselves hard in short bursts of high intensity, and then we rest and recover. And that’s exactly how we should live our lives for overall performance and well-being.

“The same rhythmic movement serves

50 | WINTER 2015

Meditation is a lot like doing reps at a gym,” Levy said. “It strengthens your attention muscle.” us well all day long, but instead we live mostly linear, sedentary lives,” Schwartz writes. “We go from email to email, and meeting to meeting, almost never getting much movement, and rarely taking time to recover mentally and emotionally. ... The most effective way to operate at work is like a sprinter, working with single-minded focus for periods of no longer than 90 minutes, and then taking a break. That way when you’re working, you’re really working, and when you’re recovering, you’re truly refueling the tank.”

As with elite athletes who put in the necessary preparation—both mentally and physically—you’ll see a tangible difference in your work performance.

In a study last year at the University of Washington, computer scientist David Levy had a group of human resources managers go through an eight-week mindfulness and meditation course. He

then gave them some challenging office tasks, involving email, instant messages, and word processing. Members of the group who had gone through the training could concentrate for longer stretches of time, were less distracted, and, most important, had lower stress levels.

“Meditation is a lot like doing reps at a gym,” Levy said. “It strengthens your attention muscle.”

We don’t have to have a four-foot vertical leap to be like Michael Jordan and perform at our best. All we need is the commitment to get enough sleep, take time to recharge our mental and emotional batteries, put away our phones and laptops and tablets regularly, and try to introduce some stress-reduction tools into our lives. Mindfulness, yoga, prayer, meditation, and contemplation aren’t just tools reserved for retreats over long weekends anymore—they are the ultimate everyday performance enhancers.

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MEDIA WHAT IS YOUR

REALLY TRYING TO DO?

By Mitch Joel

THAT OLD SAYING ABOUT ADVERTISING AND PERFORMANCE. When people talk about media and advertising, they inevitably trot out the old John Wanamaker saying: “Half the money I spend on advertising is wasted; the trouble is I don’t know which half.”

That saying is like some kind of beacon to the realities of waste, lack of analytics and “go by the gut” instinct that has enveloped advertising for decades. It

is also - without question - one of the main reasons that marketers within the organization are most often perceived as a cost center above all else in the c-suite. On the other hand, you have brilliant minds like Peter Drucker, one of the forefathers of business consulting, who once said, “The business enterprise has two-and only two-basic functions:

marketing and innovation. Marketing and innovation produce results; all the rest are costs. Marketing is the distinguishing, unique function of the business.” Which camp does your business sit in? What is your c-suite’s core feeling about marketing? Is it a cost center or is it the distinguishing, unique function of the business?

WINTER 2015 | 53

IN TODAY’S DAY AND AGE, BRANDS CAN HAVE IT ALL. It’s hard to argue that the media opportunities that brands are confronted with every day are boundless. It’s hard to argue that the advertising space hasn’t moved from a world of scarcity to a world of abundance. If you can’t get your message out to the world at eight pm on Thursday night via network

television, there are still countless (and many unique) opportunities to do so anywhere and everywhere else... in realtime. As anyone who is old enough to remember, this is something new. In my second business book, CTRL ALT Delete, I brought forward the case of advertising destruction. The idea was

to break down the media silos and to not think about channels (TV, print, radio, online advertising, search, email, social media, mobile, etc...) and to try and figure out when your media needs to be active or passive, based on how the consumer consumes or engages with it.

forces them into another mindset. And, while this is possible - in a world where more and more people watch TV with another device nearby (smartphone, tablet, interactive remote, etc...) - it is still an experience that creates friction. If you flip this, and look at Google’s business model, a consumer is on the Internet (which is an active experience) and the advertising models is aligned with the consumer’s

mindset (they are searching... or active) on a channel that is active as well (the Internet is driven by active consumer behavior... it does not just wash all over you). When brands complain that things like Facebook or YouTube are ineffective channels for advertising, I laugh (sometimes under my breath... sometimes out loud). There are, in my experience, one of the best channels to reach consumers of all kinds.

LET ME EXPLAIN. Advertising works best when it is conducive to the platform it is on, the mindset of the consumer and the space in which it occupies. So, if someone is watching TV, it is best to understand that TV is primarily a passive experience (with the exception of infomercials), that has the consumer in a passive mindset (they are sitting back and soaking it in). Asking them to tweet follow, friend and chat

LET’S DIVE A LITTLE DEEPER… More often than not, companies are simply doing passive and traditional advertising in a channel that is anything but that. So, this leaves the door wide open to think differently. To not just think about the channel or platform, but to guide all messaging in a more structured approach.

So the next time you’re doing a planning session, start looking (very intensely) at when you need a branding message, and when you need a performance one (a piece of advertising that the consumer must take an action with). Don’t stop there. Dig deeper into the proposed

channels that will have this messaging on it, and ask if these are the kinds of messages that people can or will connect with contextually to their experience and the channel experience. Case in point: Facebook. A lot of brands are looking for transactions and conversions on Facebook.

After the targeting and localization is placed, spend some time looking at how many friends these consumers have, what types of content works for them? Brands will often find that they’re branding in world where these consumers are eager to engage and connect. Conversely, many

brands are trying to shill for something, without realizing that the folks on Facebook may simply be looking to graze the newsfeed, so an awareness/branding campaign could be enough to capture a quick impression, as the images get flicked up the newsfeed. It’s complex, and that is the point. Advertising is no longer about dropping dollars and praying that they convert to sales later down the line. Your businesses ability to think in specifics and analytics when it comes to marketing will be paramount to your success.

BREAKING DOWN THE SILOS. What if all media was proposed this way? What if we asked just two questions: • Question #1: Are our consumers active or passive when this advertising will be shown to them?

• Question #2: Are our consumers ready from a branding or performance-based experience?

That feels more integrated (and smart) than most fully-integrated campaigns, doesn’t it? Are you up for the challenge?

54 | WINTER 2015

The more hunches you follow.

The more bars you raise.

The more we’re inspired.

Dell salutes the entrepreneurial spirit in everyone.

The Dell for Entrepreneurs is now in Canada!

Dell.ca/Entrepreneurs

Excerpted from HOOKED

How to Build Habit-Forming Products Nir Eyal

79 percent of smartphone owners check their device within 15 minutes of waking up every morning. Perhaps more startling, fully one-third of Americans say they would rather give up sex than lose their cell phones.

A 2011 university study suggested people check their phones 34 times per day. However, industry insiders believe that number is closer to an astounding 150 daily sessions. Face it, we’re hooked.

The technologies we use have turned into compulsions, if not fullfledged addictions. It’s the impulse to check a message notification. It’s the pull to visit YouTube, Facebook, or Twitter for just a few minutes, only to find yourself still tapping and scrolling an hour later. It’s the urge you likely feel throughout your day but hardly notice.

Cognitive psychologists define habits as, “automatic behaviors triggered by situational cues:” things we do with little or no conscious thought. The products and services we use habitually alter our everyday behavior, just as their designers 56 | WINTER 2015

intended. Our actions have been engineered.

How do companies, producing little more than bits of code displayed on a screen, seemingly control users’

minds? What makes some products so habit-forming? For many products, forming habits is an imperative for survival. As infinite distractions compete for our attention, companies

are learning to master novel tactics to stay relevant in users’ minds.

Today, amassing millions of users is no longer good enough. Companies increasingly find that their economic value is a function of the strength of the habits they create. In order to win the loyalty of their users and create a product that’s regularly used, companies must learn not only what compels users to click, but also what makes them tick.

Although some companies are just waking up to this new reality, others are already cashing in. By mastering habit-forming product design, the companies profiled in this book make their goods indispensable.

FIRST-TO-MIND WINS Companies who form strong user habits enjoy several benefits to their bottom line. These companies attach their product to “internal triggers.” As a result, users show up without any external prompting. Instead of relying on expensive marketing, habit-forming companies link their services to the users’ daily routines and emotions. A habit is at work when users feel a tad bored and instantly open Twitter. They feel a pang of loneliness and before rational thought occurs, they are scrolling through their Facebook feeds. A question comes to mind and before searching their brains, they query Google. The first-to-mind solution wins.

How do products create habits? The answer: They manufacture them.

While fans of the television show Mad Men are familiar with how the ad industry once created consumer desire during Madison Avenue’s golden era, those days are long gone. A multiscreen world of ad-wary consumers has rendered Don Draper’s big budget brainwashing useless to all but the biggest brands.

Today, small startup teams can profoundly change behavior by guiding users through a series of experiences I call “hooks.” The more often users run through these hooks, the more likely they are to form habits.

A habit is at work when users feel a tad bored and instantly open Twitter. They feel a pang of loneliness and before rational thought occurs, they are scrolling through their Facebook feeds.”

WINTER 2015 | 57

How I got hooked In 2008, I was among a team of Stanford MBAs starting a company backed by some of the brightest investors in Silicon Valley. Our mission was to build a platform for placing advertising into the booming world of online social games.

Notable companies were making billions of dollars selling virtual cows on digital farms while advertisers were spending huge sums of money to influence people to buy whatever they were peddling. I admit I didn’t get it at first and found myself standing at the water ’s edge wondering, “How do they do it?”

At the intersection of these two industries dependent on mind manipulation, I embarked upon a journey to learn how products change our actions and, at times, create compulsions. How did these companies engineer user behavior?

What were the moral implications of building potentially addictive products? Most importantly, could the same forces that made these experiences so compelling also be used to build products to improve people’s lives?

Where could I find the blueprints

f o r f o r m i n g h a b i t s ? To m y disappointment, I found no guide.

Businesses skilled in behavior design guarded their secrets and although I uncovered books, white papers, and blog posts tangentially related to the topic, there was no how-to manual for building habit-forming products.

I began documenting my observations of hundreds of companies to uncover patterns in user experience designs and functionality.

Although every business had its unique flavor, I sought to identify the commonalities behind the winners and understand what was missing among the losers.

I l o o k e d f o r i n s i g h t s f ro m academia: drawing upon consumer p s y c h o l o g y, h u m a n - c o m p u t e r interaction, and behavioral economics research. In 2011, I began sharing what I learned and started working as a consultant to a host of Silicon Valley companies, from small startups to Fortune 500 enterprises. Each client provided an opportunity to test my theories, draw new insights, and refine my thinking. I began blogging about what I learned at NirAndFar. com and my essays were syndicated

I embarked upon a journey to learn how products change our actions and, at times, create compulsions.”

to other sites. Soon, readers began writing in with their own observations and examples.

In the fall of 2012, Dr. Baba Shiv and I designed and taught a class at the Stanford Graduate School of Business on the science of influencing human behavior. The next year, I partnered with Dr. Steph Habif to teach a similar course at the Hasso Plattner Institute of Design.

These years of distilled research and real-world experience resulted in the creation of the Hook Model: a four-phase process companies use to forms habits.

Through consecutive hook cycles, successful products reach their ultimate goal of unprompted user engagement, bringing users back repeatedly, without depending on costly advertising or aggressive messaging.

While I draw many examples from technology companies given my industry background, hooks are everywhere — in apps, sports, movies, games, and even our jobs.

Hooks can be found in virtually any experience that burrows into our minds (and often our wallets).

WHAT LEADERS NEED TO KNOW ABOUT

MILLENNIALS IN THE WORKPLACE

A new kind of employee is redefining the workplace globally. Known as “Millennials,” these young workers – born between 1980 and 2004 – are the most educated and tech-savvy generation in history and they have significantly

different expectations of work than their predecessors. At the same time, “Boomers,” those born between 1943 and 1960, are starting to retire, and a race to replace them with top talent has begun. It’s predicted that by 2020, Millennials will make up 50%

of the workforce globally, so having a plan to attract and retain the best and brightest is critical to your business’ long-term success.

So what do you need to know about “Millennials” in order to drive your business into the future?

COMPETITIVE ADVANTAGE THROUGH YOUR PEOPLE As the massive Boomer generation exits the workforce, your competitive advantage will become even more tied to the ability to understand and capitalize on what motivates your people and make that

work for your business. Millennials are less afraid of failure and driven less by financial incentives, so if you aren’t able to meet their needs, they’ll find an employer that will. This, coupled with the challenges of

implementing successful succession plans for retiring senior leaders, will significantly impact your business’ strategy for growth.

And, if you aren’t planning for this now, you’ll most likely be left behind.

ENGAGING AND RETAINING MILLENNIALS So how do you develop and retain the best people who will move your business forward? The solution isn’t as complex or as expensive as you may think. Millennials put high value on learning and development

opportunities, being thanked and appreciated for their efforts and being provided with flexibility in terms of how and when they work. Implementing flexible work hours, for example, is a way to drive productivity, at next to

no cost. But this type of culture change within an organization, while free, can be tough for Boomers and Gen Xers to adopt. These generations have relied on a more traditional way of operating.

They’re typically accustomed to working WINTER 2015 | 59

at their desks in an office, and have the understanding that no feedback from a superior must mean good feedback – a stark contrast to how today’s younger workers operate. So for a culture change of this magnitude to be successful, it

needs to start with the right tone from the top. Leadership can implement programs where people are rewarded for demonstrating the behaviours the company values, like saying thank you and working collaboratively. Aligning

the desired culture change to your company programs, like rewards and flexibility, and overall business strategy is critical to appeal to and retain top talent not just for Millennials but across the generations.

PEOPLE RISK IS A KEY PART OF YOUR ENTERPRISE RISK MANAGEMENT STRATEGY Keeping your people engaged by demonstrating that you understand their needs, and then aligning those

needs to your business strategy, is a sign of a high performing company. It’s also been found that multigenerational

working groups are the most innovative, and when properly engaged, these teams will help set your business apart.

HOW ARE THE LEADERS OF YOUR ORGANIZATION ALIGNING STRATEGIES AND ADAPTING TO THE CHANGING RISK MANAGEMENT STRATEGY If they aren’t doing anything, consider the risks and the impact on your reputation and bottom line. Your people risk needs to be a component

of your Enterprise Risk Management strategy, or your productivity and ability to meet your strategic objectives will be compromised. These are our

top 10 questions leaders should be talking about in managing a multigenerational workforce to get the conversation started.

1. Characteristics of the multigenerational workforce

them from their social media profile. To assess talent, focus on the candidate profile your organization needs for the future, which is moving much more towards leadership capabilities and less on technical skills. Qualities like being able to adapt to change, understanding and supporting a team and being flexible are increasingly important in a multigenerational workforce. Recruitment techniques need to move beyond the traditional interview into assessment centres, profiling and other methods to help get a fuller picture of the capabilities of the people you are hiring.

learning opportunities, the ability to give back to the community and by offering competitive compensation?

Do we understand the different values and motivations in our multi-generational workforce?

By looking at what drives people engagement, you can clearly see differences in what each generation values and what they look for in an employer. While your Boomers sought good paying jobs, recognition and status, your Millennials want to be part of a diverse team, learn new things every day, have more flexibility to manage their lives and interact with people through social media. Identifying these differences and addressing them proactively will help you retain top talent.

2. Recruitment How are we making sure we’re finding top talent?

If you’re not connected daily to potential recruits through social media then you’re missing out on some of the top talent. Your recruiters should be using social media sites as key sources for finding non-active job seekers. Not only will these potential recruits learn about your organization, you’ll learn a lot about 60 | WINTER 2015

3. Retention What kind of work environment and practices do we have in place to drive retention?

For the Millennial generation, they need to feel emotionally connected to their place of work to be engaged and to stay. Retention, for this generation, is founded on four key drivers: a flexible work environment, engaging work and development opportunities, a sense of community and competitive pay. Are you supporting these drivers by ensuring your organization promotes flexibility,

4. Balance and workload Excessive and prolonged work hours has been found to predict higher turnover, lower commitment and reduced job satisfaction. How are we addressing this imbalance?

Work/life imbalance has a negative impact on people’s commitment to their work and may even influence their choice to leave a job, and this is even more pronounced with top performers and Millennials. Looking at different ways to manage your workforce through, for example, offering flexible work hours, flexible time off programs and supplementing your workforce during peak periods with contingent workers, are a few ways to address this issue to mitigate the risk of losing your top talent.

5. Leadership development As a Baby Boomer or Gen X, what are some of the things I need to learn or change to manage Millennials?

Millennials don’t expect their employers to manage their career or

provide them with job security, but they do expect learning and development opportunities, engaging work and flexibility in how they work. Leaders will need to adapt to this style of working.

Learning about what this generation needs from you, and monitoring how well you’re doing is how you can demonstrate to your Millennials that you value them and want them to stay.

6. People and teams Do I have the right people with the right skills in place to manage more flexibility in the workplace?

Just as talent needs are shifting, so too is the way business is conducted.

Flexibility is important to all generations, but is critical for Millennials. We are

7. Cultural change How are we addressing the cultural change that needs to take place to support a multigenerational workforce?

Having leaders who are comfortable working within a flexible work environment and who are supportive of a flexible culture is critical. This is a challenge for leaders who didn’t grow up in that type of flexible environment.

Equally, the need to give continual recognition and appreciation for a job well done is very important to the Millennial generation. Think of it as ‘instantaneous feedback’. For many leaders who were occasionally told they were doing a good job, this is another big change to realize that Millennials need more regular feedback and appreciation for their efforts.

work. They want to be continually learning and improving their skill sets.

We continue to see a trend towards the gamification of learning solutions to adapt to this generation’s needs. It’s a different approach to learning and one many organizations are adapting. To engage your workforce, what solutions do you have in place for developing your people on an ongoing basis? Take into consideration all of your options— secondments to other offices or groups, formal and informal mentoring and other experiential learning opportunities, like job shadowing to help meet this growing need from your teams.

9. Compensation Are there differences in how each generation perceives compensation?

How people perceive their pay plays a key role in retention and job satisfaction.

Millennials aren’t as concerned with pay (providing the pay is competitive) and choose to stay with an organization for other reasons. Giving your Millennials more control over their career path, development opportunities and work/ life flexibility are things to keep in mind to retain them.

10. Planning for the future

seeing the rise of more and more virtual teams which present unique challenges for management in terms of providing leadership, coaching and general oversight to a team that you don’t see, and who don’t see each other in the workplace every day. What technology do you have in place to make work more efficient, productive and flexible and do your leaders trust their staff to be productive in a virtual workplace?

Remember, for Millennials, flexibility and appreciation are major drivers of commitment, so your corporate culture will need to adapt to reflect this trend.

8. Learning and development What kinds of learning and development solutions do we have in place to support our people’s development?

Millennials expect skill development in return for delivering high quality

Why’s understanding the multigenerational workforce so important for leaders today?

In a relatively healthy Canadian job market, top performing Millennials can and may go elsewhere—either for an environment that they perceive will help them grow professionally or improved work/life flexibility. Due to improvements in technology and increased mobility, competition for the top talent continues to be a challenge.

If you don’t stay vigilant and continue to find ways to adapt to and support your changing workforce needs, you risk losing your best and brightest.

For more information, you can reach out to: Penny Partridge, CPA, CA, CHRP Partner, Chief Human Resources Officer, PwC Canada - 416 815 5166 - penny.partridge@ca.pwc.com

WINTER 2015 | 61

Marc Eckō

UNLABEL: 5 Prescriptions for Authenticity My name is Marc Ecko and I’ve been an artist and a builder of brands my whole life. I’m a white Jewish kid from New Jersey who was able to create a company based on the ethos of hip hop. From the packaging on the outside, I suspect i did not quite “look the part.”

I dropped out of college but I’ve run companies that have generated billions of dollars of revenue over the last 20 years.

How did I do it? I can tell you there was no one singular step. But by far, the singular element that motivated me along the way was to “ just be authentic self”...

62 | WINTER 2015

I know what you are saying, “authenticity, really”?

Authenticity, in my judgment, is the key to all creative success. It is as a notion and word as mis-used/misunderstood as the word “love” is with your first girlfriend. It has inadvertently become code for “relevance.” But is what is relevant, REAL... or authentic? I mean... really?

Authenticity. Consciously or not, it is an expectation that we build ourselves and our business to always be. Unfortunately this “measure of authenticity” can will/be used as a weapon against you. How? In our

culture, it is too often “governed” externally, by outside gatekeepers in our lives or industries. Those gatekeepers may indeed formally be that “certifying body,” or a boss, an “influential person” or just those cool kids that will roll their eyes at you for even having dare tried.

They will get in your way, but those GATE-keepers are not the GOALkeepers. Dig? They will be there; all passive aggressive or sometimes with their knives out -- shouting “I.D.G.A.F.” (I don’t give a fuck). But know this -- in order to break through and meet your authentic self -- you have to demand the

opposite. You had better GIVE a fuck.

Because, it may be all you have and it will always be more valuable than money.

Since the “realm of the authentic” is so murky and manufactured these days, I wanted to give my thought process for reclaiming it in our lives.

It’s a simple prescription.

PRESCRIPTION 1: BE A CREATOR Raise your hand if you’re an artist.

Try saying that to a room full of kindergarten kids. Nearly every kid raises their hand. Then say it to grownups at business conference or in an executive meeting: almost no one.

What happens to us when we get older? Why did we let them beat the creative spirit out of us? What happens in adulthood that leeches our desire to create, to build, to get messy and explore?

As a teenager, I used to paint in my parents’ garage. And now, even after so much has changed, I still follow that

ancient ritual of retreating to my office, blocking out the noise, and unrolling my canvas bag of markers and color pencils and bristle paper. It is in that quiet where I harvest and mine inspiration. Its those quiet, often mundane moments in batting practice -- swing and miss, swing and miss, rinse and repeat -- that are the moments when you will create your personal brand. Don’t expect a fanfare or flashing lights at those moments of eureka.

This is what I thirst for. This defines my purpose. These are the quiet moments when I create and work on the brand of me. What are your moments?

PRESCRIPTION 2: SELL WITHOUT SELLING OUT Sellout. They said it behind my back, they said to my face. I’ve had an army of naysayers.

We like to imagine that there’s a holy war between art and commerce. “One is creative and pure, the other is crass

and dirty.” But the two aren’t mutually exclusive. I’ve learned how to be a starving artist without literally having to starve. Starve for the right things.

Starve to create something new. But never starve your brand.

Creation need not only be the work of the divine. And branding need not only be the dirty work of the ad man on Madison Avenue. In this fragmented media culture hyper-enabled by efficiencies of social media and self-publishing, you are a brand. You must strive to be both commercially responsible in your business and creatively fulfilled by the exhibition of your ideas. If you find that balance, you will see that what makes you a good artist is what will make you a good entrepreneur. If you’re authentic in the one, you’ll be authentic in the other. The labels “they” will project on you will not matter. And if you’re willing but unable to commercialize your art? That’s okay, too. You’re still an artist.

Every artist should live by these words:

Fight this label.

Peel off this label.

UN-Label.

Refuse to be labeled by the gatekeepers. Or if you’re going to be a label, be an UN-Label.

WINTER 2015 | 63

Never feel bad about successfully selling your creations.

Never feel bad about creating art you can’t sell.

PRESCRIPTION 3: CREATE WEALTH THAT MATTERS In the spirit of being authentic, I need to share something. I’ve never been more financially stable and “worth more” than I am now. Okay, I said it. Why? You know when you go to the gym, you don’t want a personal trainer who’s fat, right?

Since 2008, a funny thing happened.

I stopped making appearances on the Today show, but I started making investments in companies and quietly launched my latest platform, Artists & Instigators. We put the brakes on retail expansion, but I put the pedal to the metal on Complex, and it repaid us with explosive growth.

All I care about now is being wealthy in the currency that matters most.

Wealthy with an authentic, actualized awareness of my personal brand and how it fits into the world. Authenticity isn’t about Ws and Ls, successes and failures. And I hate talking about what’s in my bank account as some measure of compliance to success. The reason I am wealthy today is because I’m free to better serve the Ecko beast, to steward and support new start-ups, to grow Complex media, and actually wax philosophical about life.

I’ve gotten so much value in life from Eckō Unltd. and the rhino brand. It has been a platform that has granted not just material wealth but also an education that could not have be granted in any other way than having lived it.

PRESCRIPTION 4: BE AN UN-LABEL We as a society put things in a certain

taxonomy. These labeling frameworks help us, as consumers, navigate the world. Without labels, we’d be unable to tell a can of peaches from a can of beans.

But this has unintended consequences. If we’re not careful we find ourselves acting out the label that society has slapped on our tin can, wearing pleated khakis, making our résumé look just like everyone else’s, and joining the herd of sheep. Even when we try to shake free of the herd, sometimes we end up as a black sheep in an identical herd of black sheep. (Exhibit A: The “rebellious” goth high school kids who all wear the same eyeliner.)

Fight this label.

Peel off this label.

UN-Label.

Refuse to be labeled by the gatekeepers. Or if you’re going to be a label, be an UN-Label.

This takes work. In the same way that you exercise your body, you need to challenge yourself to shake free of the herd, find your own unique voice, and create your personal authentic brand.

Make it hard for them to classify you.

Make it hard for them to label you.

Don’t let yourself be placed in a silo.

When you refuse to be labeled, suddenly you play by your own rules, not theirs. You measure yourself by your own standards, not the gatekeepers’ standards. You define the terms of your brand, your creations, and your success.

PRESCRIPTION 5: FOCUS ON AN AUTHENTIC PURSUIT, NOT DESTINATION We want to organize our life in rational, logical, quantitative ways. But humans are not rational. We are emotional creatures. And just like there is no straight line in nature it’s impossible to

imagine your life in such an organized fashion. We are, after all, just one big work in progress.

AUTHENTICITY is a work in progress. Too many business and self-help books give tidy little formulas and Venn diagrams for success like A + B = C. It’s not that simple. Even if some Doogie Howser-type brainiac could actually crunch the numbers and compute a number -- authenticity score of 72.0829, say -- that score of “72.0829” is constantly changing.

The answer is a constantly iterative thing. It’s not a measure that’s neatly defined by a number. It’s a moving target.

The forces of life are always changing.

And the forces of life can hurt like hell; they’re designed to. You thought it would be easy? They can make progress look like failure. These forces can at times seem subtractive--maybe they smack your ego, maybe they look sloppy -- that’s okay.

That’s part of the ride of creating that will eventually reveal itself as the texture, the essence, the very definition of what it is you seek to create.

Conclusion: My perscription isn’t something you can just slavishly follow, and the formula will be different for everyone. It’s not important that you use my formula to build an authentic brand, but it’s critical that you develop your own.

It’s critical that you dig deep down, from the inside out, and look outward and upward for your Vision for the Future.

Not a vision of the gatekeepers’ future.

But a future that’s authentic.

I am a brand.

I’ve shown you my brand. I’ve peeled back the label and showed you its guts.

You are a brand.

And your brand is...?

Marc Eckō is an American fashion designer, entrepreneur, investor and artist. He is the founder of Marc Eckō Enterprises, a global fashion and lifestyle company. He is also the founder and chairman of Complex Media, a network of 110+ websites that generate more than 700 million page views and 70 million unique visitors per month. Eckō serves as an emeritus board member to the Council of Fashion Designers of America, Big Picture Learning and Tikva Children’s Home. Ecko’s first book “Unlabel: Selling You Without Selling Out” was published in October 2013.

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