Monday, July 07, 2014
Tuesday, January 21, 2014
My Three Cents Has Moved
Thursday, August 22, 2013
A Management Message from a Marshmallow
"Good things come to he who waits” is an old adage, but one that contains within its words more truth than meets the eye.
I am reminded of this adage as I look back on my own career, and when I observe younger talent in business today, as they are reaching for a plum. The conclusions of the “Marshmallow Story” I relate below should communicate some key principles about how we communicate to and evaluate talent. The “story” appeared in The New Yorker on May 18, 2009.
It involved a couple of kids, a brother and sister, ages 4 and 5, who had a tray of marshmallows put in front of them and were told by a Stanford researcher that they were welcome to eat one marshmallow now; but if they waited a while until the researcher returned, they could have two marshmallows.
Each also had the option to ring a bell immediately after the researcher left, notifying the researcher of the decision to eat the marshmallow and not wait further. The little girl waited. The little boy did not. The experiment, testing delayed satisfaction, was carried out with many kids. Seventy percent were like the little boy; they struggled to delay eating the marshmallow by covering their eyes and kicking the chair, but ultimately gave in. Thirty percent were like the little girl. “They successfully delayed gratification until the researcher returned some 15 minutes later. These kids wrestled with temptation but found a way to resist.”
The thrust of the research was not about willpower or self-control. It was about some kids who figure out how to make a situation work for them. “They want the second marshmallow, but how can they get it? We can’t control the world, but we can control how we think about it,” the study points out. So, what made waiting possible for those who waited? Kids start out unable to wait for anything.
The researcher– based on hundreds of hours of observations– finally figured out the answer to the conundrum. It was the “strategic allocation of attention.” In other words, how you train your mind to think or not think is the solution. The patient children made themselves forget about the marshmallow by covering their eyes, singing songs or getting underneath the desk. If you think about how delicious the marshmallow is, you will eat it. “The key is to avoid thinking about it in the first place.” Take your mind off that which you can’t have now for a better prize later. Don’t stare at it.
The psychologist found that among 8th graders the ability to delay gratification was a far better predictor of academic performance than IQ. She found that while intelligence is important, it is still not as important as self-control. Although some toddlers come by these traits naturally, parents are critical in teaching children that waiting is worthwhile. Even teaching children not to snack before dinner or to save at least part of their allowance, are subtle ways of teaching this skill. As an adult, learning to put away money for retirement would be an example.
I recall a point in my career where I had to wait a year to be appointed a vice president on the heels of a rival being appointed immediately. It was tough, but I eventually surpassed my nearest rival. The ability to wait and figure out the situation confronting you is often the ability to be smart, as the tiny marshmallow test so informs.
Thursday, July 18, 2013
The Value of Trust Deposits
Public relationships share something in common with hard assets: they have currency, just like money in a bank. Specifically, they create what I call “trust deposits.” When companies engage in actions and behaviors that nurture strong public relationships with all their key constituents, and they do that in a consistent manner, they are building trust reserves not unlike bank deposits, which they can redeem when hard times come.
Let me cite a business example of how this principle works.
Martha Stewart is a brilliant businesswoman who has, in certain quarters, established unprecedented loyalty and trust. But she also has a shadow reputation for being arrogant, controlling, and self-righteous. In 2004, when Stewart was charged with and ultimately convicted of insider trading, that negative perception, whether unfairly or not, was widely reinforced. This image was damaging to Stewart’s business for two reasons. First, it contradicted her public persona as a gracious hostess. Second, because she had assumed the company’s almost exclusive public face, her descent had an outsized impact on the stock of Martha Stewart Living Omnimedia (MSLO). It took two years for the company’s valuation to recover. It seems clear that had Martha Stewart made some trust deposits with her more critical publics — diversifying and showcasing company management to investors, softening her image through sincere, high-profile charity work — the damage might have been mitigated.
Thus, it is worth dispelling here the myth that public relations can “manufacture” a positive image from whole cloth. The truth is that practitioners can only shape, rather than create, reputations. Without the basis for building a desired reputation, a campaign will invariably fail. Further, social media has enhanced transparency.
But Martha has learned some lessons since those days. After leaving prison, she began a comeback campaign in 2005, returning to television with various shows, releasing a number of new books, adding product lines and in 2012 returning as Chairman of her namesake company.
But she decided to do it differently this time — with more heart. As part of the Clinton Global Initiative, Martha cofounded the impressive Martha Stewart Center for Living with Mount Sinai Hospital in New York. It serves to promote and facilitate access to health and resources for older adults and enhance the public perception of aging.
Good public relationships rarely, if ever, just happen. They are established and maintained by commitment to a strategic plan that targets each of its constituents with a rationale for building a relationship. Then a company needs to establish the messages and the best channels to communicate these messages and reach those constituencies.
While the value of public relationships is intangible, one leading accounting firm estimated 35% of a company’s value to be non-financial intangibles, such as goodwill. Thus, trust deposits work to a company’s benefit.