Sending a Strong Message: Protecting Your Employees

In 1985, a film company facing financial pressure hired a new president. In an effort to cut costs, the president asked the two leaders of a division, Ed and Alvy, to conduct layoffs. Ed and Alvy resisted—eliminating employees would dilute the company’s value. The president issued an ultimatum: a list of names was due to him at nine o’clock the next morning.

When the president received … [ Read more ]

The Beauty of Many Quick Pricing Experiments

When Gary Loveman joined Harrah’s Entertainment (now Caesars Entertainment) in 1998, the casino company priced its slot machines like everyone else in the gaming industry. Management presumed that decreasing payouts—essentially raising the price—would drive some customers to other casinos. A sensible assumption, perhaps, but Loveman—a quantitative type who left a professorship at Harvard Business School to join the company—wasn’t one to assume. He commissioned a … [ Read more ]

Putting Your Money Where Your Mouth is in Customer Service

About ten years ago, two weeks before Valentine’s Day, a female customer, whom we will call Sue, stopped into the store to buy a bike for her husband. Because she had gone all out to get the very best bike she could for her husband, she needed to pay us in increments. So, she put a deposit on the bike until she could save up … [ Read more ]

What Should Be True

Some organizations and initiatives are so successful that a sort of folklore arises around them. John F. Kennedy is said to have asked a janitor scrubbing a floor at Cape Canaveral what he was doing and received the reply, “I’m working to put a man on the moon.” The story is probably apocryphal, as it’s also been attributed to architect Christopher Wren at St. Paul’s … [ Read more ]

Would You Invest in Your Own Company?

The CEO of one company was determined that his employees understand the issues surrounding the company’s recent poor results and become fully engaged to help turn the company around. Here’s how he accomplished this.

The company held four brown bag lunch meetings over four weeks where employees could attend for free for one hour and hear from an outside professional about how to invest in the … [ Read more ]

Staying on Top

A turkey was chatting with a bull. “I would love to be able to get to the top of that tree,” sighed the turkey, “but I haven’t got the energy.”

“Well, why don’t you nibble on some of my droppings?” replied the bull. “They’re packed with nutrients.”

The turkey pecked at a lump of dung, found it actually gave him enough strength to reach the lowest branch … [ Read more ]

Hey, You Got the Elephant

Recognition can be given in traditional ways—a complimentary e-mail, or a pat on the back for a job well done. But you can also get creative with it. One of my favorite examples is the one business consultant Alexander Kjerulf cites about a Danish car company that instituted “The Order of the Elephant.” The elephant is a two-foot-tall stuffed animal that any employee can give … [ Read more ]

The Best Bosses Shield those Who Work for Them

Annette Kyle managed some 60 employees at a Texas terminal where they loaded chemicals from railcars onto ships and trucks. In the mid-1990s, Annette led a “revolution” that dramatically raised her unit’s performance through a host of changes, including better planning, greater responsibility at the lowest levels, improved and more transparent metrics, and numerous cultural changes. She personally sewed “no whining” patches on workers’ uniforms, … [ Read more ]

Where is the Glass?

John Sunderland, the former CEO of Cadbury Schweppes, often responded with a parable when an executive argued that the business could increase either margins or sales, but not both. Sunderland would remind the executive of a time when people lived in mud huts and struggled to get both light and heat: Put a hole in the side of your hut, and you let the daylight … [ Read more ]

Where’s the Brown M&M in Your Business?

In its 1980s heyday, the band Van Halen became notorious for a clause in its touring contract that demanded a bowl of M&Ms backstage, but with all the brown ones removed. The story is true — confirmed by former lead singer David Lee Roth himself — and it became the perfect, appalling symbol of rock-star-diva behavior.

Get ready to reverse your perception. Van Halen did … [ Read more ]

Being Open to New Ideas

Rosabeth Moss Kanter tells a great story about an executive at a fabric manufacturer who took over a group and demonstrated that he was open to any new ideas. Someone from the production line approached the executive and, in a heavy foreign accent, said he had an idea that might solve a problem that had long bedeviled the company: An important type of fiber would … [ Read more ]

Treating Mistakes as Training

There’s the story of a top salesman who made a terrible mistake. He’d bought a vast amount of fruit. He thought it would be a bargain but had totally overestimated and his company was left with tons and tons of this rotting fruit. He arrived at his office the following day and started to tidy his papers, clearing his desk. He gets a call from … [ Read more ]

What a Waste of Brainpower

Several years ago, I visited a manufacturing plant in Florida, which had the best quality and productivity metrics in its division. My client and I were there to learn what the facility was doing right so we could apply those management techniques at other facilities. As the plant manager took us on the tour, he pointed out an hourly employee working on his machine. “See … [ Read more ]

An Outsider’s Point of View

You don’t necessarily need an outsider to provide an outside perspective, however. Occasionally a creative, clear-headed insider can break free of both his company’s and his own preconceptions by adopting a novel point of view.

This was demonstrated by Andy Grove in 1985, when he and his boss, Gordon Moore, were fighting what appeared to be a losing battle against an impossible business dilemma. In … [ Read more ]

What is an Employee’s Total Contribution?

In 2005, the National Basketball Association’s Houston Rockets were looking for a talented player to add to their roster. The usual scouting reports and analyses delivered a list of names. Some of them were unavailable or too expensive, and others did not seem like the right ft for the team.

Then, using advanced analytics capabilities, the Rockets’ general manager identified a player named … [ Read more ]

Reframing Your Business Equation

The EOQ formula dates back to the Industrial Revolution and a 1913 article by Ford Whitman Harris, a self-trained engineer at Westinghouse Electric Company, in Factory: The Magazine of Management, a relic of another era. The article showed how to balance the fixed cost of ordering or producing a batch of goods with the cost of carrying the inventory between order periods. Graphically displayed with … [ Read more ]

When you look at me, what do you see?

A fable from the East tells of an emperor and a zen monk who came face to face for the first time. The emperor ruled over a kingdom that practiced Buddhism and the monk was eager to meet with him, looking forward to sharing tales of enlightenment.

But when they met, the emperor decided to test the monk by saying to him: “When you … [ Read more ]

The Example of the Iowa Gambling Task

The field of neuroscience has been especially helpful in expanding our understanding of the role of emotions in decision-making. Research shows that while emotions are essential for decision-making, they can also lead us far astray in ways we may not anticipate. Antonio Damasio, one of the world’s leading researchers in neuroscience, helped design a seminal experiment that assessed the role of emotions in decision-making. It … [ Read more ]

Do you have your client’s best interests at heart?

In 1959, Play of the Week, an icon of civilization on television, was at risk of being canceled. Broadcast on Channel 13, New York’s public television station, the show offered high-quality theater week after week — including works by such writers as Eugene O’Neill, John Steinbeck, and Jean-Paul Sartre, with top talent. But the ratings were low, and sponsors were dropping out.

Ogilvy was looking for … [ Read more ]

Knowing Your Customers

In the 1930s, when I first knew the automotive industry, Alfred Sloan, who ran General Motors, would disappear from Detroit once every six weeks. Next morning he would walk into a dealership in Cincinnati or Kansas City and say, “I am Mr. Sloan from Detroit. Would you allow me to work for two days as your assistant service manager?“ When he left, customers always said, … [ Read more ]