Wednesday, February 19, 2003

Stever's comments regarding Heskett's question -  can getting things done be taught. http://www.venturecoach.com/resources/ ================================================== Execution can certainly be taught, though not necessarily using current business school methods. There's a world of difference between asking someone, "Tell me what you would do" and handing them a task and saying, "Go." First-person learning engages a learner in ways that produce behavior change. Third-person discussion teaches students to discuss (the activity they're "first-person" engaged in), but doesn't produce behavior change in the area being discussed. That may be one reason so many B-school grads are so like consultants--that's the first-person skill they've practiced for the last two years! Give student teams tasks to complete that require the kind of coordination and planning that they'll encounter on the job. Then, as they struggle to complete the tasks, drop in project management tools, interpersonal communalization tools, etc., so the learning becomes linked directly to context where it's most needed. Stever Robbins President Leadership Decisionworks, Inc. 6:23:45 PM

Sterling Hughes: "Google is not a horrible monster, but it is also not an entity to be worshipped. It is a for-profit company that develops a quality product, and it isn't yet evil. That's a big accomplishment." [Scripting News] 4:35:08 PM

Why Bad Projects Are So Hard to Kill     New initiatives often gain momentum even as it becomes clear that they're doomed. The reason: blind faith in their success.     by Isabelle Royer     You can still find them on eBay, sleek and gleaming videodisc players with LP-sized discs. The product: RCA’s SelectaVision – one of the biggest consumer electronics flops of all time. But it isn’t simply the monumental failure in the marketplace that makes the SelectaVision story worth remembering. It’s that RCA insisted on plowing money into the product long after all signs pointed to near certain failure. When the company developed its first prototype in 1970, some experts already considered the phonograph-like technology obsolete. Seven years later, with the quality of VCRs improving and digital technology on the horizon, every one of RCA’s competitors had abandoned videodisc research. Even in the face of tepid consumer response to SelectaVision’s launch in 1981, RCA continued to develop new models and invest in production capacity. When the product was finally killed in 1984, it had cost the company an astounding $580 million and had tied up resources for 14 years. Companies make similar mistakes – if on a somewhat more modest scale – all the time. Of course, hindsight is 20/20; it’s easy after the fact to criticize bold bets that didn’t pay off. But too often managers charge ahead in the face of mounting evidence that success is pretty well unachievable. Why can’t companies kill projects that are clearly doomed? Is it just poor management? Bureaucratic inertia? My research has uncovered something quite different. Hardly the product of managerial incompetence or entrenched bureaucracy, the failures I’ve examined resulted, ironically, from a fervent and widespread belief among managers in the inevitability of their projects’ ultimate success. This sentiment typically originates, naturally enough, with a project’s champion; it then spreads throughout the organization, often to the highest levels, reinforcing itself each step of the way. The result is what I call collective belief, and it can lead an otherwise rational organization into some very irrational behavior. The value of someone who is able to pull the plug on a project before it becomes a money sink hasn't generally been appreciated. Of course, a strongly held conviction and the refusal to let inevitable setbacks undermine it are just what you need to get a project up and running. But there is a dark side: As the project moves forward, faith can blind you to increasingly negative feedback – from the lab, from vendors and partners, from customers. To better understand why this happens and what can be done to prevent it, I analyzed two failed product innovations at two large French companies. (For a brief description of my research, see the sidebar “What Were They Thinking?”) One was a new lens created by Essilor, the world’s largest maker of corrective lenses for eyeglasses. The other was an industrial additive used in manufacturing paper, paint, and plastics, developed by Lafarge, the largest producer of building materials. In both cases, the projects absorbed millions of dollars of investment before the companies finally abandoned them.  What Were They Thinking? My analysis revealed a number of practices that can help companies avoid this kind of disaster. For one, they can assemble project teams not entirely composed of people enthusiastically singing from the same hymnbook. They can put in place a well-defined review process – and then follow it. Perhaps most important, companies need to recognize the role of “exit champions”: managers with the temperament and credibility to question the prevailing belief, demand hard data on the viability of the project, and, if necessary, forcefully make the case that it should be killed. While the importance of project champions is well documented, the value of someone who is able to pull the plug on a project before it becomes a money sink hasn’t generally been appreciated. Faith That Wouldn’t Be Shattered Essilor has long been proud of its research. In 1959, it invented the Varilux “progressive” lens, for instance, which corrects both near- and farsightedness without the telltale lines that denote traditional bifocals. But this story starts in the summer of 1979, when a similar breakthrough appears possible. Since 1974, the company has been working on a composite glass-and-plastic material that’s lightweight, shatter resistant, scratch resistant, and light sensitive. Now a researcher has come up with a way to make a lens from this material. Essilor’s research manager immediately takes a personal interest in the idea, and he orders the creation of a trial lens. Two days later, it’s done. The news spreads quickly throughout the company and is greeted enthusiastically. The research manager seeks and gets approval to proceed with additional research. The CEO himself helps select the managers who will oversee the project, many of whom have worked together on the Varilux lens and other successful projects. Early on, some questions are raised about the potential cost of this new composite lens, as well as its durability. It’s common for layers of any composite material to separate. Indeed, the director of research and manufacturing questions whether the product is even viable. But his concern isn’t heeded because he is, as one colleague says, “always skeptical.” No initial marketing studies are conducted, but none had been done for Varilux, either; in both cases, the projects are driven by the exciting technology. Based on the current sales of other Essilor products, internal estimates predict sales of nearly 40 million units a year by 1985. In April 1980, the project is accepted for development and a target launch date is set for late 1981. Excitement is high. In September 1980 though, some bad news arrives: Corning, which supplies the glass for the composite lens, says that meeting the U.S. Food and Drug Administration’s test for shatter resistance is proving more difficult than expected. If this continues to be the case, company estimates indicate that sales in 1985 will total just 10 million units. Then, pilot tests in January 1981 reveal a number of other problems, including a tendency of the lens to crack as it’s mounted into the frame. Researchers are confident that this problem can be solved (though the company later decides it will offer an exchange guarantee to opticians). Despite the problems revealed in the pilot test, production facilities are built, and trial manufacturing begins. But now another issue arises: Production costs turn out to be twice what was forecast, which will make the lens as much as six times as expensive as normal lenses. Essilor proudly launches the lens in June 1982. The president of the company sends a sample to the French Ministry of Industry. One researcher tucks a prototype away in his attic so that he can someday show his son “how you do innovation.” The manager who unveils the lens at a press conference says he feels a sense of “real jubilation.” Customers are less enthusiastic: Opticians complain about the price and the difficulties of mounting the lens. Essilor has forecast sales of 200,000 units by the end of 1982, a number limited solely by initial production capacity. But sales reach just 20,000 by that date. What’s more, concerns about the tendency of the lens’s layers to separate are proving justified. These setbacks are an emotional blow to those involved in the project but are not enough to destroy their belief. “It felt like a knockout,” one recalls. “Still, although we were in shock, we knew failure was impossible.” After all, those involved point out, initial sales of Varilux had also been slow, because people found the progressive lens difficult to get used to. The problems continue. In 1985, Essilor launches a second-generation lens meant to fix the separation problems, but it fails to do so. Sales drop below 15,000 units a year. In 1986, a modified composite material solves the separation problem, but the lens remains difficult for opticians to mount in the frame. Researchers are asked to fix this problem before the company will commit itself to launching a third-generation lens. After a year of further research, the problem still isn’t solved. But the research manager argues to the executive committee that, since the separation problem has been corrected, the third-generation lens should be launched. The company does so at the end of 1987, and, in 1988, sales grow to a lackluster 50,000 units. Then, in the spring of 1989, because of retirements and a restructuring of the company’s overall research and production activities, four new managers join the project. A new research manager replaces the lens’s foremost champion. In September, the new research manager completes his own evaluation of the project. Sales are still low, and the U.S. market remains out of reach because the lens still hasn’t passed the FDA test. The investment needed to develop a full range of products, including a progressive lens, could double what has been spent so far. He recommends that the lens be abandoned. Top management rejects his recommendation. The company does decide, however, to conduct a thorough evaluation of the project. To no one’s surprise, a business analysis shows that the lens currently doesn’t generate a profit. But a marketing study further concludes that even if the quality problems are ironed out, potential sales will reach only 1.5 million units per year, a fraction of the 40 million originally predicted. The implication: The lens will never be very profitable. In September 1990, with quality problems still unsolved and no prospect of passing the FDA test, the company decides to call an immediate halt to research on the lens and stop production within a year. It’s been ten years since the first warning signs arose. It has cost Essilor Fr 300 million, or more than $50 million in 1990 dollars. A Belief in Crystals Lafarge, like Essilor, has a big stake in the success of the product it is developing. It’s early 1985, and research that Lafarge has done on the crystallization of gypsum, a mineral commonly used in the company’s core building- materials businesses, looks like it is about to bear fruit. The engineering manager of the gypsum division has concluded that the crystals could serve as a superior substitute for the ground-up minerals commonly used in making paper and paint. The market could be large: One internal forecast puts potential annual sales at Fr 400 million, or about $40 million at the time. And pride as well as profit is at stake. Lafarge has typically grown through acquisition; here is a chance for the company to prove it can grow organically by leveraging its resources into new businesses. Later that year, the engineering manager of the gypsum division begins research on the use of the crystals as a paper filler (something added to paper stock to improve such physical or optical properties as texture or opacity). He finds a partner in a big paper producer, Aussedat Rey. The engineering manager and his boss, the division’s director of operations, seek and receive project backing from Lafarge’s top management. Because the crystal-based approach is so innovative, enthusiasm quickly grows. Over the next several years, the project enjoys both successes and setbacks. The paper filler product is superior in a number of ways to existing fillers, and the crystals turn out to have another potential application in plastics manufacturing. Aussedat Rey agrees to pay for further paper filler tests. These highlight several problems. The product has the potential to clog certain papermaking machines. And it is not concentrated enough, making it relatively expensive for customers to use. Researchers are confident, however, that these problems can be solved. Lafarge’s top management accepts the project for development, including applications for paper, paint, and plastics, and sets 1990 as the target launch date. Aussedat Rey’s first production trial of the paper filler in December 1987 is a technical success, although the paper company still wants a more concentrated version. The successful trial heightens Lafarge’s optimism; informal estimates of annual sales grow to Fr 1 billion, or about $190 million in 1988 dollars. To be sure, projections indicate that the paper filler itself probably won’t be profitable. But the full range of products for paper, paint, and plastics taken together should be. Unfortunately, only the paper filler has advanced beyond the laboratory stage. Still, people are eager to get the product to market. To begin production in 1990, the gypsum division’s director of operations needs funding to break ground on the plant in 1989. At the end of 1988, Lafarge’s top management, aware that tests on the more-concentrated version of the paper filler have not yet been run, approves funding for the plant, so long as certain criteria are met. Before the money is released, the project team must have “verified the feasibility of the manufacturing process in the pilot workshop and the product’s quality and acceptability to customers.” This tentative go-ahead is greeted enthusiastically by project members. A lone dissenting voice is Lafarge’s new mineral-fillers manager, recently recruited from a consumer products company. He raises concerns about remaining technical challenges, especially after a more-concentrated version of the paper filler fails a new test at Aussedat Rey. But his concerns are generally ignored because of his lack of experience in industrial products. In fact, others involved in the project repeatedly remind him of this fact. He stops raising questions – and ultimately resigns. Meanwhile, Aussedat Rey is showing less interest in the paper filler and repeatedly delays further trials. (It later will sever its relationship with Lafarge because the price of the paper filler is too high.) The paper filler’s “quality and acceptability to customers” – the criteria that must be met to receive funding for the plant – seem far from assured. And yet, after a presentation by members of the project, top management gives the plant a green light, and it is inaugurated in September 1990. Several weeks later, at Lafarge’s annual meeting of researchers from labs across the company, the paper filler researchers and their managers present the project as an example of a successful internal research initiative. But the new plant remains idle, as no product has yet emerged from the lab that is ready for production and no customer or partner has been found to fund further tests. Meanwhile, one of the project’s champions, the gypsum division’s director of operations, has left Lafarge for health reasons and has been replaced by an operations director from another division of the company. He forms a task force to formally evaluate the viability of the project. This isn’t easy because of the lack of data. For example, although an initial market study was done, there have been no follow-ups to gauge demand for a product that is now likely to lack some of the features originally envisioned. Still, in April 1991, the task force’s report confirms that the paper filler itself won’t be profitable and estimates that two years and another Fr 30 million (about $5.3 million in 1991 dollars) would be needed to get other products ready for pilot testing. The new director of operations recommends terminating the project. Most team members agree with the factual findings, but many reject the recommendation that the project be killed. So, although top management stops development of the paper filler, it authorizes continued research on products to be used in paper coating and plastics manufacturing. At the end of 1991, however, a test of the paper-coating product produces poor results and offers little hope that it can be improved. In early 1992, the plant is sold and the entire project is stopped, having cost a total of Fr 150 million (nearly $30 million in 1992 dollars) over seven years. The Seductive Appeal of Collective Belief So what got into the decision makers at these two companies? Why did Essilor persist with the development of its new lens in the face of so much negative evidence? Why did Lafarge build a brand-new production facility before determining whether its gypsum crystal additive had a future in the marketplace? These were not cases of bureaucratic inertia. If anything, the procedures and controls over these projects were too lax rather than too unresponsive or inflexible. Nor were these cases in which project champions were flogging a dead horse to justify their original touting of it. What the many interviews and myriad contemporary documents reveal in both companies is the power, and troublesome implications, of a very human impulse: the desire to believe in something – in these situations, in the projects’ ultimate success. In both companies, this belief was held not just by a handful of individuals but by much of their organizations. When it reinforces others' perceptions and desires, collective belief is often contagious and can easily spread among the various decision makers who control a project's fate. How does that happen? Collective belief arises because individual belief is often contagious, particularly when it reinforces others’ perceptions and desires. When this is the case, the belief can spread easily among the various decision makers who control a project’s fate. Here’s how that played out at Lafarge and Essilor. The Emergence of Belief. The original true believer is a project champion, who holds an unyielding conviction – based, often as not, on a hunch rather than on strong evidence – that a project will succeed. This belief then spreads to others; how quickly and with what intensity depends on a number of factors. Some of these are organizational and some are particular to the champion – for example, his personal credibility and charisma and the robustness and range of his social network within the company. Indeed, if the champion’s reputation is strong enough, the belief can pass from person to person until it is shared by individuals who don’t even know the champion and know little of the project. At Lafarge, two project members candidly admitted that they couldn’t truly assess the potential of the new product but took the word of one of the project’s champions that it was a winner. Belief in a project is all the more contagious when its ultimate success is something that people greatly desire. For both Essilor and Lafarge, the two projects furthered important companywide goals: the development of products that embodied a strong technological tradition of “research for the sake of vision” at Essilor, and the desire to generate organic growth rather than growth through acquisition at Lafarge. But a project can also satisfy individual desires, ones that are often quite various and even potentially conflicting. Some at Essilor reported they saw the lens as something “that would permanently eliminate competitors.” Others hoped the project would maintain employment levels in the glass factories as plastic lenses grew in popularity. Some senior executives saw the composite glass-and-plastic lens as a way to strengthen corporate culture: Essilor was born from the merger of Essel, a glass-lens manufacturer, and Silor, a rival that made plastic lenses, and the two divisions still competed against each other. At Lafarge, some viewed the new additive as a way to enhance the reputation of the company’s R&D function. Others saw it as a strategically important move beyond building materials. In both companies, the collective belief served as an umbrella that sheltered an array of hopes and dreams; those, in turn, worked together to reinforce the collective belief. The Persistence of Belief. Once a collective belief takes hold, it tends to perpetuate itself. For one thing, groups have a way of drowning out dissent. At Essilor and Lafarge, both lone initial dissidents – Essilor’s director of research and manufacturing and Lafarge’s mineral-fillers manager – were generally ignored or told that the questions they raised reflected their lack of experience or competence. Eventually, they stopped raising questions. This self-censorship gave the groups an illusion of unanimity and invulnerability, which in turn helped sustain individual belief. One manager at Essilor said that the lens’s failure in the market in 1982 raised doubts in his mind. But he chose not to voice these and, because of the group’s apparent unanimity, soon forgot them. Curiously, setbacks, rather than undermining faith, often drive people to work all the harder to maintain it. Despite the Essilor lens’s poor market performance, the company continued to produce it in vast quantities, consistently more than were sold. Since project members believed the market failure was only a prelude to ultimate success, they exhibited what one manager called “technological relentlessness” in their pursuit of both improvements and customers. This intensity is not surprising, given the emotional attachment people feel for a project they passionately believe in. As one Essilor manager said of an early version of the lens: “It was a dream, and a dream come true on top of that! The product existed! It was beautiful.” Another manager, recalling a setback in lens development, observed, “We didn’t dare wonder whether we should stop or not. It was too hard.” The Consequences of Belief. The greatest danger posed by an organization’s collective belief in a project is that problems, even if acknowledged, won’t be seen as signs of failure – or at least as issues that should be resolved before moving on to the next stage of development. At Essilor, some managers explained away the lukewarm initial demand for the lens as an aberration related to the soon-to-be-solved technical problem of layer separation, forgetting that the market was generally unaware of this problem. At Lafarge, one manager knew that the decision to build the plant was probably premature, given the available test results for the product, but he said nothing because he was eager to move forward on an enterprise everyone was certain would succeed. Managers at both companies referred to the blindness that resulted from their faith in the projects. This blindness persists in part because collective belief undermines normal organizational procedures and safeguards. For one thing, the enthusiasm generated by faith in a project can lead to an unrealistically tight development timetable. Essilor canceled some tests and substituted shorter, less reliable ones in order to stick to its aggressive development schedule. A test to see how durable the lenses remained over time, for example, was shortened from two years to six months. Lafarge’s desire to remain on schedule was the driving force in the construction of the plant before necessary tests on the additive had been completed. Enthusiasm also can result in lenient procedures for reviewing the viability of a product throughout its development. For instance, scratch-resistance specifications for Essilor’s new lens were not defined until 1990, eight years after the product was initially launched. Furthermore, widespread enthusiasm can lead to the formation of a project team filled with, and overseen by, uncritical boosters of the initiative. Together, these factors can create a reinforcing chain that perpetuates collective belief. Decision makers’ faith in the project results in an absence of clear decision criteria, which leads to ambiguous information, which in turn favors wishful thinking by those decision makers and further bolsters their belief in the project’s success. In a sense, the project takes on a life of its own. Avoiding the Dangers of Blind Faith In your own company, you have undoubtedly known projects that dragged on but went nowhere. You may be aware of a handful of bad projects that are grinding along, or even picking up speed, right now. How can companies prevent this sort of thing? How could the managers at Essilor, for example, have known that the composite lens project wouldn’t turn out the way the Varilux lens effort did? They probably couldn’t, at least for a while. But they could have done a number of things that would have made them better able to judge their progress and counteract the distorting effects of collective belief. Two kinds of safeguards can be built into a project before it even gets under way. Another one requires a manager involved in a project to play an important, new role. Beware of cheerleading squads. All too often, project teams are self-selected. They include people who have volunteered because they share an initial enthusiasm for the project. They may even have worked together on successful projects in the past. They know the drill and can anticipate one another’s moves. In fact, they know them too well. As they interact, there are none of the awkward missteps or misunderstandings that can produce unexpected insights – or signs of trouble. Warning flags that do appear may be ignored; after all, everyone is rooting for something they believe in. Executives launching a project would do well, then, to include skeptics along with believers in the project teams from the outset, paying particular attention to those who will be directly involved in making decisions. Then, over the course of the initiative, some decision makers should be replaced with others, who will look at the project with fresh eyes. At Essilor and Lafarge, top management populated the projects with true believers. In fact, in both cases, the sole initial critics joined the projects somewhat by chance. Essilor’s director of research and manufacturing was involved only because he was the immediate supervisor of the manager of the plant where the lens would be made. Lafarge’s mineral-fillers manager had originally been hired for another job and joined the project only because Lafarge had difficulty finding someone with both minerals and project expertise to fill out the team. At Essilor, personal relationships also came into play; some members had been friends for 20 years – a further reason that robust criticism, which might jeopardize those friendships, didn’t emerge. Only when turnover occurred for reasons unrelated to the project – retirement, health problems, the restructuring of a companywide research function – was the cohesiveness of the project groups disrupted and some measure of objectivity introduced. Establish an early warning system. From the start, no matter how exciting or important a project is, a company needs to make sure that its control procedures and criteria for evaluating project viability at each stage of development are truly working – that they are clearly defined, rigorous, and actually met. Big companies like Essilor and Lafarge typically have these kinds of effective internal controls for all sorts of processes – for example, “stage gates” that companies must go through as they proceed with a potential acquisition. But they can easily forget to establish such structures at the beginning of a project that seems bound for glory. Or even if they do establish processes for good decision making, they can end up ignoring them – or the results – amid the excitement generated by a new project. Lafarge executives concede that they failed to adhere to their own decision criteria when they went ahead and built the plant – although the criteria were vague enough to make this fairly easy to do. Essilor had several clear procedures for testing the lens during development that weren’t followed; others produced negative results, which were ignored. As one Essilor manager said: “The decision to launch was implicit. It was just a question of when.” Recognize the role of the exit champion. Sometimes it takes an individual, rather than growing evidence, to shake the collective belief of a project team. If the problem with unbridled enthusiasm starts as an unintended consequence of the legitimate work of a project champion, then what may be needed is a countervailing force – an exit champion. These people are more than devil’s advocates. Instead of simply raising questions about a project, they seek objective evidence showing that problems in fact exist. This allows them to challenge – or, given the ambiguity of existing data, conceivably even to confirm – the viability of a project. They then take action based on the data. At both Essilor and Lafarge, exit champions – the new research manager at Essilor, and the new operations director at Lafarge – joined the projects as evidence of their unpromising futures was mounting. But supporters were still clinging to the shreds of positive evidence that occasionally emerged – or ignoring the evidence altogether. Had it not been for these exit champions, team members said later, the projects probably would have continued for months or even years. To be effective, an exit champion needs to be directly involved in the project; a negative assessment from someone based elsewhere in the company is too easy to dismiss as ill-informed or motivated by organizational rivalry. The exit champion also needs a high degree of personal credibility. The managers at Essilor and Lafarge who had raised questions about the lens and paper filler during the early development stages lacked this credibility. Essilor’s director of research and manufacturing was known within the organization as a naysayer; Lafarge’s mineral-fillers manager, who came from another company, appeared to lack industry experience. The exit champions, by contrast, had been with their companies for a long time and were well regarded by top management. Both had a strong network of people at different levels of the company ready to provide support when they decided the project should be killed. What kind of person would willingly assume such a role? Even if killing a project doesn’t put an exit champion out of a job – the individuals at Essilor and Lafarge had responsibilities beyond the projects in question – the role, unlike that of a traditional project champion, seems to offer little in the way of prestige or other personal rewards. (For a discussion of the differences between the two roles, see the sidebar “The Exit Champion and the Project Champion.”) In fact, the exit champion faces inevitable hostility from project supporters; those at Essilor and Lafarge were variously described as villains or dream breakers.  The Exit Champion and the Project Champion Consequently, exit champions need to be fearless, willing to put their reputations on the line and face the likelihood of exclusion from the camaraderie of the project team. They need to be determined: Both Essilor’s and Lafarge’s exit champions failed in their first attempts to stop their projects. Perhaps most important, exit champions need to have some incentive for putting themselves out to halt a bad project. For many, this will simply be an acute distaste for wasted effort. As one exit champion at another company I researched said, “When I work, I need to believe in what I do. I don’t want to waste time on something that is worthless.” It is important to understand that an exit champion is not a henchman sent by top management to kill the project. The exit champions at Essilor and Lafarge certainly weren’t: They were assigned their positions only because their predecessors had left the company, and they simply took the initiative to determine if their projects were likely to be successful. Indeed, it wasn’t initially clear to either of them that their respective projects should be killed. Although signs that the projects wouldn’t succeed were accumulating, in neither case was the evidence conclusive because it wasn’t based on hard data. Senior executives need to recognize the exit champion as a defined role that someone might play in the organization – otherwise, they may not know an exit champion for who he is and give him the support he will need. And they can take steps to create an environment in which such a savior would be more likely to emerge. Just as companies celebrate and recount stories of the great successes of product champions, they could perhaps identify and spread tales of courageous exit champions in their midst (or at other companies) who saved their organizations millions of dollars. Top managers should at the least make it clear that challenges to a popular project would be welcome or even rewarded. At the same time, though, they need to demand from the exit champion strong evidence of the project’s weaknesses – just as they should have earlier demanded growing evidence of its viability. It Couldn’t Happen Here When all is said and done, do Essilor’s and Lafarge’s experiences – not to mention RCA’s in the case of its ill-fated SelectaVision – simply reflect bad business judgment? Were they nothing more nor less than dumb business moves? Aren’t situations like these unlikely to be repeated at your company? Don’t bet on it. Although they may not always be played out on such a grand scale, stories like these are all too familiar in business. That’s because belief is a powerful sentiment, and collective belief is even more powerful. Clearly, any project has to start with faith because there typically isn’t much objective evidence, if any, at the beginning to justify it. But, as a project unfolds and investments increase, this faith has to be increasingly tested against the data. Indeed, the challenge for managers in the “can-do” culture of business is to distinguish between belief as a key driver of success – and belief as something that can blind managers to a project’s ultimate failure.     Reprint Number R0302C 1:33:39 PM

Who’s Bringing You Hot Ideas (and How Are You Responding)?     by Thomas H. Davenport, Laurence Prusak, and H. James Wilson     There’s an unsung hero in your organization. It’s the person who’s bringing in new ideas about how to manage better. Mind you, we’re not talking about product and service innovations. The people who cook those up – and they are heroes of the organization, too – are celebrated loudly and often. We’re talking about the person who, for instance, first uttered the phrase “intellectual capital” in your hallways, believing that better management of knowledge assets could yield a competitive advantage. Or perhaps it was the notion of “real options” as an antidote to overly risk-averse capital investment analysis. Or, depending on how long the person has been around, maybe it was even “total quality management.” Exactly who are these people in your particular organization? You probably already know. It’s the middle manager you called when you decided to include something about process redesign or balanced-scorecard management in your letter for the annual report. It’s the smart executive who advised you on which consulting firm to employ for help with e-commerce and who seemed to know all about each one’s strengths and weaknesses. It’s the first person who comes to mind when you need a strategic thinker to do a special project. Come to think of it, it’s that manager who just sent you a conference binder on a topic you’ve expressed some interest in. As much as you might wish you did, you don’t have many such people. And they’re more important than ever because fresh ideas about management are more critical than ever to enhancing business performance, to motivating workers, and to revitalizing your organization. Product innovations are copied quickly and easily today, leaving managerial innovation as an important way for companies to differentiate themselves. So shouldn’t you be doing more to manage your idea people to get the benefit of this peculiar talent of theirs – or at least to keep them from leaving? A New Type of Practitioner For the past couple of years, and less formally for our entire working careers, we’ve been studying the people who bring management ideas into organizations. As management researchers and authors, we’ve always worked with such people as “customers” and long ago had to admit that any impact we had on actual management practice was owing to their translation and implementation efforts. Rather belatedly, we’ve come to recognize them as a distinct type of practitioner. That is to say, they share a common way of working and resemble their counterparts in other organizations more than they resemble their own colleagues. We tested this notion by identifying and interviewing 100 of them in various organizations, industries, and locales. The group was diverse – it included, for example, a chief financial officer of a global manufacturer, a chief learning officer of an investment bank, and a chief operating officer of a large U.S. government agency. But sure enough, we found a surprising degree of commonality in how these “idea practitioners” go about their work. The similarities begin with how they scout for ideas. All of them, not surprisingly, are avid readers of management literature and enthusiastic participants in business conferences, and many are friendly with business gurus. They approach all their sources with open minds; they’re neither cynical nor overly credulous. The philosopher William James once wrote, “The art of being wise is the art of knowing what to overlook,” and this is a discerning group. They are extraordinarily attuned to the zeitgeist – the often opaque economic, social, or technological environment that can determine whether an idea will thrive or quickly perish. In our interviews, too, we discovered that idea practitioners tend to value an interdisciplinary perspective, looking to fields outside business for new approaches to solving problems. When we interviewed Lawrence Baxter two years ago at Wachovia Bank, for example, he was reading a book on superstring theory in physics. He, like others we interviewed, believes a singular focus on management theory is “very limiting.” No business idea takes root purely on its own merits; it has to be sold. Scouting for ideas is only the first phase of a four-part process by which these practitioners infuse their organizations with new ideas. The next phase is packaging an idea with promise for broader organizational consumption. Idea practitioners add to, subtract from, or otherwise translate the ideas they want to introduce, tailoring them to fit their organizations’ specific needs. Often this is a question of, as one of our interviewees put it, “building a logic between the idea and the firm.” The most successful idea practitioners are able to gear ideas to the issues executives care about and express them in terms of the key themes – such as innovation, efficiency, or effectiveness – that executives stress in their rhetoric. At Whirlpool, for example, the senior management passionately believes in and communicates the idea that innovation is the key to the company’s future success. When Antonella Padova, an idea practitioner, wanted to bring knowledge management to Whirlpool, she realized she would need to tie the concept to innovation – as opposed to, say, cost efficiency. She personally believed knowledge management would prove valuable in many ways, but to ensure that the idea got traction, she hitched it to a train already leaving the station. No business idea takes root within an organization purely on its own merits. Instead it has to be sold – to senior executives, to the rank and file, to middle managers. In this third phase, idea practitioners advocate for new ideas: They build marketing campaigns, find early adopters, and work to persuade other leaders and managers to “put some skin in the game.” One way they do this is by illustrating the competitive pressure to change. Dave Barrow of British Petroleum told us, “What is universally helpful in gaining executive support is benchmarking data.” Another made the same point, calling it “show and tell.” He told us, “I like to call it benchmarking, but basically you’re finding users who are using or doing whatever it is you want to show and putting them on the stage.” Finally, all good idea practitioners have some hand in the fourth phase: making it happen. Most are well versed in the principles of change management and understand the importance of rolling out a new idea simultaneously from the top down and the bottom up. As one manager told us, “I try to work both sides toward the middle in terms of ideas, but this means you must participate in a dance.” They realize that their advocacy must reach from the boardroom to the grassroots level of the organization – and sometimes beyond. One idea practitioner who works with franchisees told us that at her organization new ideas often must rest on a “three-legged stool.” The company’s employees, owner-operators, and suppliers all have to buy in to a different way of working. Idea practitioners also know when their work is done. They are usually involved in early, small-scale experiments, but when those take off, they get out of the way and let others execute. People who do these four things – scouting, packaging, advocating, and implementing ideas – are properly called practitioners because, by sharing practices and a common body of knowledge, they learn from one another how to better advance what they do. Indeed, one of the surprising findings in our study was how many of these people are repeat offenders. Dave Barrow at BP, for example, has worked on a variety of special projects involving government relations, network computing, crisis management, capital productivity improvement, and human resource processes in engineering. Mike Burtha, an idea practitioner at Johnson & Johnson, has helped introduce new concepts in process improvement, quality management, and knowledge management. Each has been able to apply lessons learned in successfully championing one idea to those that follow. A Certain Kind of Person Idea practitioners don’t share only their processes; they also share personality traits. Optimism is one quality we observed in nearly all our interviewees. That’s notable because it’s quite easy to be cynical about the business-idea business. Many executives are quick to dismiss the endless stream of new practices and approaches as fads or as opportunism and media hype gone mad. But where cynics see only consultants hungry for billable hours or academics jockeying for tenure and speech deals, idea practitioners see the true potential of new business ideas. They see the possibility of a better way and hold out a belief that people and organizations can change. Idea practitioners are also devoted to ideas in general. Most of the people we interviewed are well educated, often with liberal arts backgrounds, and are clearly not lacking in basic brainpower. One entered Harvard at 14, for example, and completed a PhD program at 20. They are well versed in the art and science of management, but most also subscribe to a variety of nonbusiness, idea-focused publications. They are intellectually restless and passionate about ideas for their own sake. At the same time, they don’t come across as fanatical, or as fadmongers. Most seem quite mild-mannered at first blush. In fact, several attributed their success partly to their reasonableness: “Cultivating a moderate image is important,” one noted. “Lecturers and zealots always fail.” Some said they try to ensure that an idea, and its success in the enterprise, doesn’t get tangled up in their own personalities. Hubert Saint-Onge, who shepherded various ideas at Canadian insurer Clarica, argues that idea practitioners should “allow organizations to reach their own conclusions” and that they should “become invisible” to the process as individuals. Idea practitioners must be self-confident because putting new business ideas in place is difficult and often politically charged. Every organization is full of senior managers who are happy with the status quo and who don’t want threatening new ideas coming in from left field. At the same time, the manager who lives to fuel his own ego is destined to fail as an idea practitioner. We have known of several people (though they’re not included in our sample) who would appear frequently at conferences to discuss their organizations’ efforts at reengineering, customer relationship management, and so forth. Some even wrote an article or two. But when we’d visit their companies and ask about these individuals, we’d get dirty looks and muttered curses in reply. Or we’d ask, “What’s going on with your ‘knowledge superhighway’ project or your ‘customer relationship reengineering,’” and we’d get blank looks. Such people are great at publicizing their own work, but not as good at bringing others on board. Finally, idea practitioners tend to be boundary spanners. They have the personal networks within their organizations to know whom to enlist in their efforts. These networks often give them a nearly direct line to the CEO. World Bank employee Steve Denning, for example, formed a collegial relationship with a VP who worked closely with CEO Jim Wolfensohn. This helped Denning vault knowledge management to the top of that organization’s agenda. Because of their networks, idea practitioners don’t have to resort to door openers like “I’m from corporate, and I’m here with a better idea.” Outside their organizations, these people are likely to show up on conference agendas, as members of communities of practice, and as sponsors of multicompany research programs. Gene Meieran at Intel, for example, is the senior sponsor for the company’s relationships with MIT. He works both with the business and engineering schools there and with special programs such as the Media Lab and Leaders for Manufacturing, a joint business and engineering program. At one point, Meieran even became the director of research for the program with a faculty designation. He’s on advisory boards at Purdue and the University of New Mexico, and he also “hangs out” at Berkeley, Stanford, and Michigan. Care and Feeding of an Idea Practitioner It’s far from clear how many idea practitioners a given organization needs. But it’s safe to say that every company should have at least a few – and that the better these people perform in that role, the more competitive the organization will be. In our study, we looked at how some companies enable and others hobble their idea practitioners. We asked our interviewees what makes their life difficult, what motivates them, why they left some companies, and why they’ve stayed at others. Based on our research, we have seven pieces of advice to offer. Recognize their existence. It’s your obligation to determine just who is playing this role in your organization. It might take some digging; they’re likely to be scattered around the place. There may be someone in manufacturing who’s spotting operations-oriented ideas, while someone else in marketing may be on the lookout for new approaches to innovation and customer management. Your strategic-planning function ought to be good for at least one strategy maven. Find out who your idea practitioners are, and then let them know you’ve taken note. Carve out roles for them. Some organizations have begun to create formal units to deal with new business ideas. Ericsson, for example, has a group dedicated to importing and implementing approaches to business improvement. This structure recognizes that some people are better at propelling new ideas along than others, and they should be freed from other duties to do so. Still, almost all of the idea practitioners we know have other jobs and play their idea roles somewhat on the margin. They are most often found in staff functions like strategy, IT, or HR, which may not be ideal – at least not initially – given the difficulty of making change happen from corporate. We have seen companies establish high-ranking corporate offices for idea practitioners – Hubert Saint-Onge’s role as senior VP of strategic capabilities at Clarica is an example. But that approach seems to be wisely reserved for those individuals who have already earned the respect of the organization. We suspect that the best approach would be to identify a capable idea practitioner and carve out a role to leverage his or her strengths, rather than to establish a formal idea-oriented role and then look for candidates to fill it. However you structure the role, as leader, you must ensure that the idea practitioner ends up in a good position after the idea has run its course or becomes embedded within the organization. If idea practitioners don’t prosper from championing ideas, then people in the organization won’t see the value in pushing ideas. At General Electric, for example, senior managers try to ensure that the business unit leaders of idea initiatives emerge with good jobs. Gerry Podesta, who led the e-business initiative at GE Plastics, for example, was promoted to head of GE Plastics for the Americas after e-business was embedded within other business functions. Give them license. Idea practitioners need freedom to pursue ideas. But this doesn’t mean they should be given carte blanche by top management from day one. One of our interviewees noted: “New people come into the company – maybe right out of business school – and they think it would be really cool to go to conferences and work with external gurus. But it doesn’t work that way. You have to earn your stripes as someone who can…actually do something with the idea when it comes inside.” The best way to set idea practitioners loose is within the bounds of explicitly stated values and leadership-driven initiatives. At Johnson & Johnson, for example, the values of the organization are clearly articulated in the company’s famous credo. Mike Burtha feels that the credo gives him a framework for exploring new business ideas and makes him more comfortable taking risks. “For me, it provides a relevant foundation for my idea generation process,” he says. “As long as I’m staying in that framework of values, I know I’ll be okay.” Reward them…carefully. Idea practitioners, like everyone, need reward and recognition. But throwing too much money and power at them might be counterproductive – if only because such rewards will attract wanna-bes, who lack the intrinsic motivation integral to the role. Idea practitioners are primarily motivated not by money or power but by intellectual stimulation and the excitement of seeing ideas transformed into action. Some we talked to, in fact, felt they could have been more successful in traditional terms had they been less passionate about ideas. Whatever you do with regard to cash and perks, don’t fail to reward idea practitioners with attention. Your willingness to hear them out, and to visibly get behind an idea, is a powerful motivator – and your disregard counts as a penalty. Your public acknowledgment of their roles in bringing important ideas to the organization may be the highest reward you can give. It may even make sense to adopt a practice commonly employed by technology and engineering companies, which live or die on the strength of their innovation: granting the status of “Fellow” to innovators who continually make important contributions to the business. Motorola, for instance, annually announces new recipients of its Dan Noble Fellow Award and also recognizes a broader group, consisting of about 1% of its technologists, called its Science Advisory Board. Gene Meieran, the idea practitioner we mentioned earlier, is an Intel Fellow – that company’s most senior technical role. All Intel Fellows – 49 of them thus far – have been technical visionaries, but Meieran is also a managerial innovator. Together with CEO Craig Barrett, he introduced a quality and reliability initiative to the manufacturing organization. Meieran has championed the modeling of manufacturing processes and supply networks, remote data sensing, supplier maintenance, process control methodology, the role of the Internet in manufacturing, and knowledge management. Meieran admits that his designation as a Fellow has helped him start “brushfires” around a new idea. “Whether I’m right or wrong,” he says, “my stuff at a minimum will get a fair hearing.” Get into the ideas. Again and again in our interviews, we heard that the single greatest factor determining whether an idea catches on in a company is the perception of CEO-level backing. A leader can signal support for an idea in any number of ways: by sending out an organizationwide memo; by calling a meeting of the management team at which each member discusses how his or her unit is addressing the idea; by introducing a guru associated with the idea at a management meeting; even by keeping a copy of a thoughtful book about the idea on his or her credenza. We’ve seen many other types of signals – some subtle, some not so subtle. If you’re looking for real change, not-so-subtle is better. For example, when Jack Welch was championing e-business and digitization at GE, he declared that the opportunities and threats created by the Internet were “the biggest change I have seen at GE,” and “number one, two, three, and four on my agenda.” That advocacy, of course, sends a very powerful message. If any e-business leaders missed it, Welch left nothing to chance. Steve Kerr, formerly of GE and now chief learning officer at Goldman Sachs, told us: “In typical fashion, Jack began calling personally on the newly appointed e-business leaders to ensure there was sufficient urgency and boldness in their actions. At every encounter, he would ask them how much they were selling over the Internet, and what more they could be doing. ‘It’s a great job because Jack is into it,’ said one. ‘And it’s a terrible job because Jack is into it.’”  Do Ideas Make a Difference? Run occasional interference. An idea practitioner without the protection of an idea-oriented leader is unlikely to get very far. One practitioner described how important such support was in clearing obstacles: “We didn’t have much of an organizational hierarchy. But I was given a mandate from the CEO – a very rare thing at the company – to pull off this particular idea. If anybody questioned it, I could say, ‘Bob wants this to happen.’ And that made all the difference.” An idea-friendly company encourages tolerance for the failures that come with experimentation. That’s not to say that a manager should be able to railroad an unpopular idea through the organization by liberally dropping your name. But that person should be able to come to you occasionally for help in overcoming unhealthy resistance. Another of our study participants put it this way: “Leaders need to provide high-level cover – like a Strategic Air Command. They have to clear a path for you to keep the idea protected, so that it can continue to spread. When you have high-level cover at the executive level, you can make sure that it works and it’s going to last.” Without protection from top managers, an idea can fall quickly by the wayside, with all the appearances of having been a fad. Even one experience like that, he explained, “can ruin an organization’s capacity for ideas for a long time.” Create an idea-friendly culture. Finally, more than anything, it is the leader’s responsibility to create an organizational culture that lets good ideas flourish. In many cases, CEOs are willing to embrace new ideas, but they are surrounded by what one of our interviewees called “centurion guards” – middle managers bent on resisting change at every turn. For idea practitioners, this state of affairs is tolerable, perhaps even expected. But idea practitioners are apt to divest themselves emotionally and intellectually – then inevitably move on – when a CEO or senior executive communicates an aversion for risk greater than that of the rank and file. Noting the paralyzing rhetoric of a former boss, one idea practitioner recalled, “He always said, ‘Don’t make us better; make us money!’” Cultivating an idea-friendly organization is also about encouraging tolerance for the failures that come with experimentation. It’s often been said that innovation requires the ability to fail, and innovation driven by business and management ideas is no exception. Some ideas will not work out, despite the best intentions and efforts. One might argue that the experiments undertaken with business and management ideas are, in some ways, more difficult and complex than those in any laboratory, yet no one expects that all laboratory experiments will succeed. Your Real Movers and Shakers Everyone knows the expression “movers and shakers,” but few people realize it was coined by a poet, Arthur O’Shaughnessy, talking about the role poets play in the world. “We are the music-makers,” he wrote, “And we are the dreamers of dreams…Yet we are the movers and shakers/ Of the world forever, it seems.” Like O’Shaughnessy’s poets, idea practitioners are the people who envision a new reality. Without them, new ideas would remain on the periphery of organizations and would never get embedded into practice. Idea practitioners are a valuable resource for organizations that shouldn’t be taken for granted – or they’re likely to leave. In conducting this study, we found it was common for idea practitioners to have worked for several different organizations. Dave Clarke, for example, recently joined the not-for-profit world after working in the chemical and automotive industries, moving from WL Gore to General Motors to the American Red Cross. Maybe this is part of their value – like business honeybees, they pollinate new ideas across industries and companies. But we suspect that their ability to add value grows with their tenure in a particular company, making it all the more important for senior executives to identify and champion them. The more seasoned practitioners have seen a lot of ideas in their time, and they have a good feeling for which ones will fit into the context of their own companies. “Since I know the kinds of ideas this company is receptive to and what it actually needs,” says one practitioner, “I can strike the match that lights the fire of innovation.”     Reprint Number R0302D 1:30:35 PM

Clueing In Customers     When a company’s offerings are hard to judge, customers look for subtle indicators of quality. The Mayo Clinic knows how to send the right signals.     by Leonard L. Berry and Neeli Bendapudi     Nobody likes going to the hospital. The experience is at best unnerving, often frightening, and, for most of us, a potent symbol of mortality. What’s more, it’s very hard for the average patient to judge the quality of the “product” on the basis of direct evidence. You can’t try it on, you can’t return it if you don’t like it, and you need an advanced degree to understand it – yet it’s vitally important. And so, when we’re considering a doctor or a medical facility, most of us unconsciously turn detective, looking for evidence of competence, caring, and integrity – processing what we can see and understand to decipher what we cannot. The Mayo Clinic doesn’t leave the nature of that evidence to chance. By carefully managing a set of visual and experiential clues, Mayo tells a consistent and compelling story about its service to customers: At Mayo Clinic, the patient comes first. From the way it hires and trains employees, to the way it designs its facilities, to the way it approaches care, Mayo offers patients and their families concrete and convincing evidence of its strengths and values. The result? Exceptionally positive word of mouth and abiding customer loyalty, which have allowed Mayo Clinic to build what is arguably the most powerful brand in health care – with very little advertising – in an industry where few institutions have any brand recognition beyond their local markets. It’s called “evidence management”: an organized, explicit approach to presenting customers with coherent, honest evidence of your abilities. Evidence management is a lot like advertising, except that it turns a company into a living, breathing advertisement for itself. Other organizations manage evidence well, too. Ritz Carlton, for example, very effectively communicates outstanding personal service: Employees at all levels take note of customer preferences and are empowered to solve problems on the spot, continually tailoring the experience to each person. Mayo Clinic does not have all the answers; health care is a highly inventive industry, and many institutions could serve as fine examples to business. However, during our extensive study of the Mayo organization over a five-month period, we saw evidence-management practices that rival or surpass anything we’ve seen in the corporate sector, practices that are applicable outside of health care. As part of our research design, we interviewed approximately 1,000 Mayo employees and patients, observed hundreds of doctor-patient visits at two of Mayo’s three major campuses (Scottsdale, Arizona, and Rochester, Minnesota; the third is in Jacksonville, Florida), and stayed in the hospitals overnight as patients. In almost every experience and interaction, in subtle and not-so-subtle ways, we got the message that at Mayo Clinic, the patient comes first. Many businesses sell products that are intangible or technically complex – financial and legal services, software, and auto repair are just a few – and their customers naturally look for clues that can help explain what they don’t understand or see. In fact, in just about any organization, the clues emitted by people and things (humanics and mechanics, respectively, as introduced to the management literature by Lewis Carbone and Stephan Haeckel) tell a story to customers or potential customers. The question for managers is whether the clues tell the intended story. Mayo Clinic’s effectiveness at designing and managing evidence offers a lesson other service organizations would do well to heed: Understand the story you want to tell, and then make sure your people and your facilities provide evidence of that story to customers, day in and day out. Clues in People When we interviewed Mayo patients, we were struck by how consistently they described their care as being organized around their needs rather than the doctors’ schedules, the hospital’s processes, or any other factor related to Mayo’s internal operations. The actions of Mayo staff members, according to what we were told, clearly signal the patient-first focus. Here are representative remarks: “My doctor calls me at home to check on how I am doing. She wants to work with what is best for my schedule.” “When I had a colonoscopy, [my doctor] waited to tell me personally that I had a polyp because he remembered that my husband died from small bowel cancer, and he knew that I would be worried I may have the same thing.” “My oncologist is…the kindest man I have ever met. He related some of his personal life to me. I was more than my problem to him. He related to me as a person.” Such glowing praise isn’t limited just to the doctors and nurses. One patient, for example, was “amazed” at how well the people at the registration desk handle requests: “People who come up to the desk are nervous, or angry, or abusive. These ladies at the registration desk just keep their cool. I wish they could train the customer service reps in department stores.” It’s no accident that employees communicate a strong, consistent message to patients. Mayo explicitly and systematically hires people who genuinely embrace the organization’s values. The clinic emphasizes the importance of those values through training and ongoing reinforcement in the workplace, a practice that began in the very early part of the twentieth century, when Drs. William and Charles Mayo started the organization. Indeed, William Mayo’s credo – “The best interest of the patient is the only interest to be considered” – guides hiring decisions to this day. It’s difficult to get a job at Mayo Clinic because of intellect or technical skill alone. Demonstrated task competence is essential, of course, but the hiring managers are also trained in behavioral interview techniques, and they are expected to use them to elicit an applicant’s values. A candidate may be asked, for instance, to discuss a time when he set a developmental goal for himself and how he met that goal, or to describe the proudest moment in his career or even the moment he found most frustrating. Interviewers avoid discussing hypothetical situations that allow candidates to figure out the “right” answer and instead probe for specific details that reflect true experiences and perspectives. For example, a candidate who identifies making a difference in a patient’s life as his or her proudest moment may be more attuned to Mayo’s values than one who mentions achieving a career milestone. Evidence management is a lot like advertising, except that it turns a company into a living, breathing advertisement for itself. The people who make the cut – indeed, the people who are drawn to Mayo in the first place – are those who take pride in having the freedom to put patients first. We heard many doctors and nurses say that they appreciate being allowed to practice medicine as they feel it should be practiced. Those feelings of pride and the alignment of employees’ attitudes with Mayo’s values contribute to lower staff turnover across the board. Annual turnover among hospital nurses is only 4% at Mayo versus 20% for the industry as a whole – continuity that, in turn, helps boost the quality of care. Once hired, all new employees go through an orientation process specifically designed to reinforce the patient-first mentality. The program for nonphysician employees – whether janitors, accountants, or nurses – is designed to help all staff people understand how their jobs affect patients’ care and well-being. If housekeeping fails to maintain sanitary conditions, for instance, a patient’s health may be compromised no matter how excellent the medical care received. Storytelling figures heavily in these programs, with the emphasis on how employees have used Mayo values to make difficult decisions on patients’ behalf. Storytelling continues in the workplace because, once people are away from the classroom, the idea of putting the patient first can seem distant and sometimes even unrealistic, given the stress and unpredictability of day-to-day work. Consider, for instance, one story featured at several orientation sessions and widely disseminated throughout the organization. A critically ill patient was admitted to the Scottsdale hospital shortly before her daughter was to be married, and she was unlikely to live to see the wedding. The bride told the hospital chaplain how much she wanted her mother to participate in the ceremony, and he conveyed this to the critical care manager. Within hours, the hospital atrium was transformed for the wedding service, complete with flowers, balloons, and confetti. Staff members provided a cake, and nurses arranged the patient’s hair and makeup, dressed her, and wheeled her bed to the atrium. A volunteer played the piano and the chaplain performed the service. On every floor, hospital staff and visiting family and friends ringed the atrium balconies, “like angels from above,” to quote the bride. The wedding scene provided not only evidence of caring to the patient and her family but also a strong reminder to the staff that the patient’s needs come first. They got the message: We heard the story again and again in our interviews with employees. Another story was initially told at a leadership development program for rising Mayo administrators. In one session, Mayo staff members shared experiences that showed how the service philosophy affects care. An emergency room physician told of a patient who walked into the ER with severe shortness of breath. When told she had a bacterial infection requiring immediate surgery, the woman expressed concern about her sick dog, which was in her illegally parked truck. The attending nurse assured her that he would move the truck and take care of the dog, but when he walked outside, what he saw was not a pickup but a semi, which he wasn’t licensed to drive. He was about to have it towed – for $700 – when he stopped to consider ways he might save the patient the expense. In the end, the nurse took it upon himself to obtain permission to park the truck at a nearby shopping center for a few days and find a fellow nurse – a former trucker – to drive the truck there. He took the dog to a veterinarian and then cared for it in his own home while the patient recovered. When asked what prompted him to do this, the nurse replied, “At Mayo Clinic, the patient’s needs come first.” Various events celebrating exceptional service on behalf of patients further reinforce employees’ commitments. The Rochester campus hosts an annual Heritage Week, celebrating the clinic’s history and values and reinforcing their relevance to Mayo’s work today through historical presentations and displays, lectures, ecumenical and liturgical services, concerts, and social events. Employees, retirees, volunteers, patients, visitors, and members of the community are invited. Mayo Rochester also recognizes exceptional service with its quarterly campuswide Karis Award (Karis is Greek for caring). All staff members are eligible and can be nominated by a coworker, patient, or family member; the identity of the nominator is not disclosed, which removes political considerations from the process. One 1999 winner, a world-renowned colorectal surgeon with numerous scientific recognitions, told his tablemates at the award luncheon that he cherished the Karis more than any other award he’d received, calling it “the only award I have for just being a really good doctor.” Clues in Collaboration In 1910, William Mayo said: “In order that the sick may have the benefit of advancing knowledge, union of forces is necessary.…It has become necessary to develop medicine as a cooperative science.” Dr. Mayo’s vision profoundly influences the organization’s approach to care. Patients experience the Mayo Clinic as a team of experts who are focused on patients’ needs above all else. They perceive an integrated, coordinated response to their medical conditions and, often, to related psychological, social, spiritual, and financial needs. Elsewhere, doctors may be reluctant to admit to any gaps in their knowledge. Not so at Mayo. Mayo Clinic assembles the expertise and resources needed to solve the patient’s problem. If a Mayo doctor can’t answer a question and needs to bring someone else onto a team, she freely admits it to the patient. The doctors meet with one another and with the patient – visible evidence that they are collaborating to solve the patient’s problem rather than passing it from one doctor to another. One patient we interviewed expressed a common sentiment when he said, “I have a lot of problems, and I like that I can go to Mayo and be seen by a team of specialists who work together to see the big picture.” Collaboration is particularly important because the institution’s reputation has become so well known that patients often come in looking for a miracle. Many have consulted several other doctors and consider Mayo the last resort, so the physicians there regularly see patients with complex problems and high expectations, a situation that puts the doctors under extra pressure to make the right diagnoses and treatment decisions and not miss often subtle medical distinctions.  The Research Mayo Clinic encourages this type of collaboration through various organizational incentives. All physicians are salaried, so they don’t lose income by referring patients to colleagues, and the organization explicitly shuns the star system, downplaying individual accomplishments in favor of organizational achievements. In the words of one cardiovascular surgeon, “By not having our economics tied to our cases, we are free to do what comes naturally…to help one another.” Doctors who are focused on maximizing their incomes or who want to be the star of the show don’t work for Mayo Clinic. A surgeon specializing in the liver explained, “The kind of people who are attracted to work for Mayo Clinic have a value system that places the care of those in need over personal issues such as salary, prestige, and power. There is little room for turf battles. It is never a problem to add [a new case] on to the workload of the day. It’s simply the best thing to do for the patient.” In just about any organization, the clues emitted by people and things tell a story to customers or potential customers. The question for managers is whether the clues tell the intended story. Mayo also supports teamwork with its use of technology. Staff members partner via a combination of face-to-face and remote collaboration using a sophisticated internal paging, telephone, and videoconferencing system that connects people quickly and easily. Remote teamwork through voice or virtual interaction is just as common as in-person teamwork at hallway or bedside consults. One physician told us, “I never feel I am in a room by myself, even when I am.” Recently, for example, a Mayo ENT specialist in Scottsdale called together 20 doctors from all three campuses to discuss a difficult case – a patient with skin cancer at risk for metastasis and, owing to the necessary surgery, nerve injury and disfigurement. The team, assembled in a day, met by videoconference for an hour and a half and reached a consensus for a course of treatment, including specific recommendations on how aggressively to sample the patient’s lymph nodes and how best to reconstruct the surgical wound. Mayo’s electronic medical record (EMR) improves the clinic’s ability to present a seamless, collaborative organization and manage the evidence that patients see. The EMR provides an up-to-date narrative of the patient’s symptoms, diagnoses, test results, treatment plans, procedures, and other related data, connecting in- and outpatient information and communicating across disciplines in outpatient practices. This connection is critical to patient-first decisions in ways that patients don’t necessarily see. One emergency room physician said it had prevented her from intubating a patient who had asked not to be resuscitated, for instance, and others told of the importance of the EMR in managing patient medications to avoid allergic reactions or dangerous drug interactions. But patients notice and appreciate the single source of information as well, as we heard time and again in our research. One patient told us: “On my last visit, the doctor pulled up all my test scores from the past five years on a computer and showed me the trends, and we discussed what to do. I thought that was excellent.” In short, patients told us in numerous interviews that Mayo’s team service gave them a sense that the organization was coordinating its resources to provide the best possible care, with the patients’ needs foremost in employees’ minds. Clues in Tangibles In health care, the visual clues about an institution’s core values and the quality of care are particularly difficult to separate from the actual service because people spend significant time in the facility – some stay for days or even weeks. The physical environment is also connected to medical outcomes: The potential of design to promote healing through stress reduction has been documented in dozens of studies. For these reasons, more medical institutions are making an effort to create open, welcoming spaces with soft, natural light. Mayo Clinic goes further with its design philosophy, which is perhaps as well honed and articulated as that of any major service provider in America, and pays strict attention to how every detail affects the patient’s experience. From public spaces to exam rooms to laboratories, Mayo facilities have been designed explicitly to relieve stress, offer a place of refuge, create positive distractions, convey caring and respect, symbolize competence, minimize the impression of crowding, facilitate way-finding, and accommodate families. In the words of the architect who designed Mayo Rochester’s new 20-story Gonda Building: “I would like the patients to feel a little better before they see their doctors.” A well-designed physical environment has a positive impact on employees as well, reducing physical and emotional stress – which is of value not only to employees but also to patients because visible employee stress sends negative signals. In our interviews, patients commented on the lack of apparent stress; one said, “It did not seem like a doctor’s office when we went to Mayo. There was no tension.” The Gonda Building has spectacular wide-open spaces, a marble stairwell and floor, glasswork sculpture suspended above, and a multistory wall of windows looking onto a garden. The building’s soaring lobby houses a cancer education center because, as one administrator put it, “the more visible the center, the more you remove the stigma of having cancer.” The lobby of Mayo Clinic Hospital in Scottsdale is also visually stunning, with its atrium, indoor waterfall, stonework, and wall of windows overlooking a mountain range. Mayo doesn’t limit its facilities’ clue management to public spaces. After all, the scary stuff in a medical facility happens elsewhere – in the catheterization lab, in diagnostic imaging, in the hospital room. At Mayo hospitals, staff members write the names of attending doctors and nurses on a white board in every patient’s room, which helps stressed-out patients and families keep track of multiple caregivers and serves as a visible clue that there’s a real person they can talk with about any concerns. In-hospital showers, microwave ovens, and chairs that convert to beds are available for family members because, as one staff member explained, “People don’t come to the hospital alone.” The pediatric section of the emergency department of Mayo’s St. Mary’s Hospital in Rochester transformed artwork by local schoolchildren into a colorful array of wall and ceiling tiles. The resuscitation equipment in pediatric examination rooms is hidden behind a large picture (which slides out of the way when the equipment is needed). While the hospital was under construction at the Scottsdale campus, officials arranged to have an automobile lifted into the building so physical rehabilitation patients would be able to practice getting in and out of a car in the privacy of the hospital. Environmental clues in the outpatient setting are orchestrated just as carefully. Mayo Clinic buildings include quiet, darkened private areas where patients can rest between appointments. Public spaces are purposely made softer with natural light, color, artwork, piano music, and the sights and sounds of fountains. In examination rooms, the physician’s desk is adjacent to a sofa large enough for the patient and family members, a design that removes the desk as a barrier between doctors and their patients. Mayo also understands that the way employees present themselves sends a signal to patients. Patients don’t encounter doctors in casual attire or white coats. Instead, the more than 2,800 staff physicians wear business attire, unless they are in surgical scrubs, to convey professionalism and expertise. It’s a dress code that some outside Mayo have called “pretentious,” yet we’d argue that it’s no more pretentious than, say, the dress code for airline pilots. Airline passengers don’t want to see their pilot in a polo shirt, and patients feel the same way about doctors. In effect, Mayo Clinic doctors – just like service workers in many other industries – work in a uniform; it’s a visible clue that communicates respect to patients and their families. Clearly identify a simple, consistent message, and then manage the evidence – the buildings, the approach to care, even the shoelaces – to support that message, day in and day out. Such attention to visual clues extends to the most minute detail. Mayo Rochester employee Mary Ann Morris, the administrator of General Service and the Office of Patient Affairs, often tells a story about her early days with the organization. She was working in a laboratory – a job that required her to wear a white uniform and white shoes – and after a hectic morning getting her two small children to school, she arrived at work to find her supervisor staring at her shoes. The supervisor had noticed that the laces were dirty where they threaded through the eyelets of Morris’s shoes and asked Morris to clean them. Offended, Morris said that she worked in a laboratory, not with patients, so why should it matter? Her boss replied that Morris had contact with patients in ways she didn’t recognize – going out on the street wearing her Mayo name tag, for instance, or passing patients and their families as she walked through the halls – and that she couldn’t represent Mayo Clinic with dirty shoelaces. “Though I was initially offended, I realized over time [that] everything I do, down to my shoelaces, represents my commitment to our patients and visitors,” Morris told us. “Twenty-eight years later I still use the dirty shoelace story to set the standard for the service level I aspire to for myself and my coworkers.” A dirty shoelace might seem pretty minor, given the important work of caring for the ill. But a shoelace is something a customer can see, whereas medical expertise and technical ability are not. It’s a piece of evidence, a small but integral part of the story Mayo tells to its customers. We aren’t arguing that “patients first” is the only story a medical institution might choose to tell patients. A hospital might instead choose to signal, “We hire the smartest doctors,” and manage the evidence with prominent displays of academic credentials and awards, a lecture series, and heavy publicity about new research. What Mayo Clinic has done better than just about any organization we can think of, however, is clearly identify a simple, consistent message and then manage the evidence – the buildings, the approach to care, and, yes, even the shoelaces – to support that message, day in and day out.     Reprint Number R0302H 1:26:29 PM

The Science Behind Six Degrees     It’s not just who you know. It’s who they know and who knows the people who know them.     An Interview with Duncan Watts   The idea that we’re all connected by just “six degrees” – six other people – is entrenched in our folklore. But Columbia sociologist Duncan Watts is working to see if such small worlds really exist and how they might work. Watts is one of the principal architects of network theory, the study of network structure and behavior. By teasing out the fundamental rules that govern networks of people, machines, companies, and economies, Watts hopes to learn more about how ideas spread, financial systems fail, and businesses survive crises. In his new book out this month, Six Degrees: The Science of a Connected Age (W.W. Norton), Watts explores the cutting edge of network science and its practical implications. HBR’s Gardiner Morse recently spoke with Watts about his work. Following are edited excerpts of their conversation.   You’re using the Internet to study the “six degrees” phenomenon. What have you found? The notion of six degrees of separation grew out of work conducted by the social psychologist Stanley Milgram in the 1960s. Milgram decided to investigate the so-called small-world problem, the hypothesis that everyone on the planet is connected by just a few intermediaries. In his experiments, a few hundred people from Boston and Omaha tried to get a letter to a target – a complete stranger in Boston. But they could only send the letter to a personal friend whom they thought was somehow closer to the target than they were. When Milgram looked at the letters that reached the target, he found that they had changed hands only about six times. This finding has since been enshrined in the notion that everyone can be connected by a chain of acquaintances roughly six links long. If this small-world hypothesis is correct, it has important implications for the nature of social networks. But Milgram’s actual results were far less conclusive than most people realize. So, my colleagues and I are conducting an Internet experiment to try to settle the matter. We now have over 50,000 message chains originating in 163 countries in search of 18 targets around the world. The preliminary picture is more complicated than Milgram realized, but it looks like his main finding of six degrees is in the ballpark. Until recently, it’s been hard to study the small-world problem because we lacked adequate computing power. That has changed really only in the last decade, and there’s been a corresponding burst of interest in network science. Researchers are studying networks of people, companies, boards of directors, computers, financial institutions – any system that comprises many discrete but connected components – to look for the common principles. And what we seem to be finding is that the small-world phenomenon is not only real but far more universal than anyone thought. The principles that apply to social networks, and account for the six-degrees phenomenon, seem to apply to many other kinds of networks as well. That could have implications for understanding practical problems like how ideas spread, how fads catch on, how a small initial failure can cascade throughout a large network like a power grid or a financial system – even how companies can foster internal networks to cope with crises. What can network science tell us about how fads spread? Let’s look at the phenomenal success of Harry Potter. The first book actually started life quite inconspicuously and then, like Razor scooters and the Blair Witch Project, it just caught on. But why? People tend to think that successful products are somehow destined to succeed because of some intrinsic combination of features that creates and sustains demand. But network science suggests there’s more to the picture. In the case of Harry Potter, before Bloomsbury bought the rights, several other publishers rejected the manuscript. It’s tempting to think of them as fools who missed a sure thing. In fact, it never was a sure thing. For every Harry Potter that explodes out of nowhere, there are thousands of books, movies, authors, and actors who live their entire lives in obscurity, and my work suggests that it’s not because they lack quality or desirability. In other words, the market for a successful product should not be thought of as existing in some latent state before the product launch waiting for the product to arrive. Rather, it arises dynamically, driven in large part by the growing success of the product itself. In economics, this phenomenon is known as an information cascade: a social chain reaction in which increasing numbers of people buy a product principally because other people are buying it. One objective of network science is to explain the mechanics of how these self-perpetuating markets form. We’re finding that the structure of the networks is probably much more important than anyone thought in influencing the dispersion of ideas or behaviors. Harry’s success may have more to do with particular attributes of the social and media network it’s spread across than with any inherent quality of the book. That turns our traditional notions about cause and effect on their head. So which network structure best encourages information cascades or idea contagion? We don’t know yet. But our work is beginning to identify some basic principles. For instance, it appears that having a wide range of personality types in a population can actually enhance the odds that a new idea or product will catch on. We also think that information cascades can be squelched if people in a network are exposed to too many opinions, or too few. Clearly, poorly connected networks inhibit idea contagion. What’s less obvious is that if the people in a network are too densely connected, that may also prevent a fad or a product from catching on. It’s too early to say if any specific marketing tactics could yield the next Harry Potter. But our work suggests that conventional ideas about how to promote products may not be optimal. Companies think they understand the networks they rely on. Your work suggests just the opposite. Many critical networks in business are initially invisible, in the sense that they are not formally recognized. But they’re still important. So it’s vital to create the conditions that allow useful networks to form and be exploited. How does the “right” network of problem solvers form? In Honda plants, for example, even relatively routine manufacturing problems are solved by rapidly created, temporary teams assembled when needed from people who come from throughout the plant – not just from the specific area where the problem was first observed. The roots of even seemingly straightforward problems can be far-flung and thus require a surprisingly broad range of institutional knowledge to be resolved. A simple paint defect, for example, may result from a faulty valve, which might have stopped working because a spray station is continually overtaxed, because another spray station is never working, because that spray station has a problem with its computer control mechanism, which resulted from an incorrect software setup, which can be traced to an overworked system administrator who is spending too much time helping managers with the e-mail accounts, and so on. No single person can know all this, but companies like Honda have discovered that, given a sufficiently diverse portfolio of participants, even quite complicated causal chains can be identified quickly. What Honda understands and exploits is not only that informal social networks are valuable (albeit in unpredictable ways), but also that they can be fostered by institutionalized procedures. One question we hope to answer is, What is the optimal level of network-building activity in a company? Throwing people together for no apparent reason is obviously costly. Where do you get the maximum return on the investment? We hope to determine both what the ideal level of emphasis should be on building networks and the kind of mixing strategies that work best. How far off are the practical applications of network science? Network science suggests that our notions of cause and effect are skewed, that we’re sometimes looking at the wrong actors in the play to try to understand why the drama is unfolding the way it is. Network science suggests that our notions of cause and effect are skewed. Practical applications like how to successfully launch a fad or design the internal architecture of a large firm are a long way off. Right now, we’re at a stage analogous to molecular biology at the time when Watson and Crick announced the discovery of the structure of DNA. The significance of their discovery was immediately clear, but it still took 50 years and a massive commitment of human and financial capital to generate the biotech industry we have today.     Reprint Number F0302B 1:19:21 PM

First, the science of networks has taught us that distance can be deceiving. The first evidence in support of this observation came in the late 1960s in the form of a remarkable experiment conducted by the social psychologist Stanley Milgram. Milgram devised an innovative message-passing technique in which he gave a few hundred randomly selected people from Boston and Omaha letters to be sent to a single target person -- a stockbroker who worked in Boston. But the letters came with an unusual stipulation: They could only be sent to a personal friend, preferably one "closer" to the target than the current holder. Each subsequent recipient received the same instructions, thereby forcing the letters to traverse a chain of social acquaintances from initial sender to target. Milgram's question was, how many people would be in a typical chain? The answer was six -- a surprising result that led to the famous phrase (and John Guare's 1990 play) "Six Degrees of Separation." That someone on the other side of the world, with little in common with you, can be reached through a short chain of network ties -- through only six degrees -- is an aspect of the social world that has fascinated generation after generation. Now the science of networks gives us an explanation in terms of the multidimensional nature of social identity -- we tend to associate with people like ourselves, but we have multiple, independent ways of being alike. And because we know not only who our friends are, but also what kind of people they are, even very large networks can be navigated in only a few links. 1:02:00 PM

Interesting concept applications are a bit fluffy - maybe stock market day trading...?  How bout discovering that the great mass of people were suddenly typing Columbia or NASA after the recent shuttle disaster... Blog Bursts?. Word 'Bursts' May Reveal Online Trends "Searching for sudden 'bursts' in the usage of particular words could be used to rapidly identify new trends and sort information more efficiently, says a US computer scientist. Jon Kleinberg, at Cornell University in New York, has developed computer algorithms that identify bursts of word use in documents. While other popular search techniques simply count the number of words or phrases in documents, Kleinberg's approach also takes into account the rate at which the word usage increases. Kleinberg suggests that the method could be applied to weblogs to track new social trends. For example, identifying word bursts in the hundreds of thousands of personal diaries now on the web could help advertisers quickly spot an emerging craze.... Researchers at Google, the world's most widely used internet search engine, have already shown that identifying spikes in search terms can be used to track the spread of news and rumours around the world. The algorithms that run Google's automated news aggregation service remain secret, but it is not difficult to imagine that word bursts could, or do, have a useful role." [New Scientist] What an interesting idea in light of Google's recent purchase.... [The Shifted Librarian] 12:55:08 PM

Thanks Shifted for a great description of Google's value The Google Memex. On the Trail of the Memex: Vannevar Bush, Weblogs and the Google Galaxy "While blogs are creative and often charming tools in the hands of individual bloggers, by harvesting the collective power of armies of bloggers, the power Google stands to wield in online publishing begins to stagger the imagination.... If Google’s PageRank algorithm is the shimmering star of the cyberspace firmament, it presides over a vast array of fellow travelers and hangers-on. For all intents and purposes, Google owns the Web, by virtue of its superior and highly popular search engine. It owns the history of the Internet, thanks to GoogleGroups, which searches over 20 years of Usenet archives. It owns the present, thanks to GoogleNews, which constantly scans the front pages of thousands of online newspapers, deduces which stories editors around the world consider the most important, and snags the headlines and lead paragraphs from those sentences to assemble a patchwork quilt that exposes news readers to a wide variety of editorial and political opinions.... The future of intellectual life, as mediated by hypertext, may well be defined by collaborative, member-driven “writerly” communities such as Slashdot (where extremely brief “articles” are drowned out by hundreds posts, which are then sorted and rated by volunteer moderators who separate the wheat from the chaff) or Wikipedia (a user-created encyclopedia, created two years ago and recently collecting its 100,000th user-authored article)." [dichtung-digital] And one ring [Google] to rule them all? Will it own the past, present, and future (breaking news, "where should I go next")? Dennis G. Jerz sent me the link to his article, saying that he had already written the article and submitted it to his editor when the big news broke. A few modifications, and voila - serendipity. It's an interesting article, so read the whole thing. [The Shifted Librarian] 12:51:04 PM

New to me Teoma search engine is as good as Google Nothing just as good ever really is... Google don't blink. Here's one for the history books. "For all intents and purposes, Google owns the Web, by virtue of its superior and highly popular search engine." I don't agree. Teoma appears to be as good a search engine as Google. Here's how the Web works. If Google starts claiming that they own the Web, and tries to foreclose, Microsoft will buy Teoma and give something away that Google charges money for. Then John Doerr will be forced to decide if he is willing to wage a cash battle with Microsoft. He will blink. Google will be history. If I had to bet, I'd bet that Google is smarter. They're not going to make the same mistake Netscape made, and start declaring victory. Instead, they will act humbly, and self-deprecatingly, and try to set expectations low. (They may have a problem because everyone sees them looming so large.) They will figure out what the users want and give it to them. They may try to act like a platform vendor, and if they do, they will have a historic chance to do it right, one that neither Apple or Microsoft or the W3C has managed. (Or dead ones like Personal Software, Lotus, Borland, General Magic.) BTW, anyone who believes that Google actually owns the Web should remember that Microsoft owns the browser. Google is a good search engine and blogging tool. We don't know how they will connect them yet. I bet they don't either. Note to Teoma. If you want to compete with Google, you must have image search. [Scripting News] 12:42:45 PM

© Copyright 2005 W R Carlson. Last update: 4/29/2005; 4:18:45 PM.