The HBR Guide Collection. 9781625278128, 1625278128

Table of contents :
Persuasive presentations --
Better business writing --
Getting the right work done --
Managing stress at work --
Finance basics for managers --
Project management --
Managing up and across --
Getting the mentoring you need.

Citation preview

8-TITLE SET

How to go to your page This eBook is a 8 book collection. To avoid duplicate page numbers in the electronic version, we have included an abbreviated form of the title before these pages, separated by a colon. Persuasive Presentations—PP Better Business Writing—BBW Getting the Right Work Done—GRWD Managing Stress at Work—MSW Finance Basics for Managers—FBM Project Management—PM Managing Up and Across—MUA Getting the Mentoring You Need—GMYN

For example, to go to page vii of Persuasive Presentations, type “PP:vii” in the "page #" box at the top of the screen and click "Go." To go to page “8” of Managing Stress at Work, type “MSW:8”… and so forth. Please refer to the eTOC for further clarification.

The HBR Guide Collection Contents: Persuasive Presentations Better Business Writing Getting the Right Work Done Managing Stress at Work Finance Basics for Managers Project Management Managing Up and Across Getting the Mentoring You Need

Harvard Business Review Press Boston, Massachusetts ISBN-13: 978-1-62527-812-8

Smarter than the average guide

Hbr Guide to Persuasive Presentations

Inspire action Engage the audience Sell your ideas By Nancy Duarte

HBR Guide to Persuasive Presentations

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Harvard Business Review Guides Arm yourself with the advice you need to succeed on the job, from the most trusted brand in business. Packed with how-to essentials from leading experts, the HBR Guides provide smart answers to your most pressing work challenges.

The titles include: HBR Guide to Better Business Writing HBR Guide to Finance Basics for Managers HBR Guide to Getting a Job HBR Guide to Getting the Mentoring You Need HBR Guide to Getting the Right Work Done HBR Guide to Giving Effective Feedback HBR Guide to Making Every Meeting Matter HBR Guide to Managing Stress HBR Guide to Managing Up and Across HBR Guide to Persuasive Presentations HBR Guide to Project Management

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HBR Guide to Persuasive Presentations Nancy Duarte

HARVARD BUSINESS REVIEW PRESS Boston, Massachusetts

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Find more digital content or join the discussion on www.hbr.org. The web addresses referenced and linked in this book were live and correct at the time of the book’s publication but may be subject to change. Copyright 2012 Harvard Business School Publishing Corporation All rights reserved No part of this publication may be reproduced, stored in or introduced into a retrieval system, or transmitted, in any form, or by any means (electronic, mechanical, photocopying, recording, or otherwise), without the prior permission of the publisher. Requests for permission should be directed to [email protected], or mailed to Permissions, Harvard Business School Publishing, 60 Harvard Way, Boston, Massachusetts 02163. Library of Congress Cataloging-in-Publication Data Duarte, Nancy. HBR guide to persuasive presentations / Nancy Duarte. p. cm. ISBN 978-1-4221-8710-4 (alk. paper) 1. Business presentations. 2. Persuasion (Psychology) I. Title. HF5718.22.D817 2012 658.4′52—dc23 2012019634

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What You’ll Learn

Do you dread giving presentations? Maybe your mind goes blank when you sit down to generate ideas, or you struggle to organize your fragmented thoughts and data into a coherent, persuasive message. Is it tough to connect with customers you’re wooing, senior executives you’re hitting up for funding, or employees you’re training? Do you fumble for the right words, get lost in your slide deck, run out of time before you’ve hit your main points—and leave the room uncertain you’ve gotten through to anyone? This guide will give you the confidence and tools you need to engage your audience, sell your ideas, and inspire people to act. You’ll get better at: • Showing people why your ideas matter to them • Winning over tough crowds • Balancing analytical and emotional appeal • Crafting memorable messages • Creating powerful visuals

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What You’ll Learn

• Striking the right tone • Holding your audience’s attention • Measuring your impact

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Contents

Introduction

xv

Plan well.

Section 1: AUDIENCE Know your audience and build empathy. Understand the Audience’s Power

3

Your idea’s fate is in their hands.

Segment the Audience

7

Focus on who matters most.

Present Clearly and Concisely to Senior Executives

11

Help them make big decisions on a tight schedule.

Get to Know Your Audience

15

It’s easier to convince someone you know.

Define How You’ll Change the Audience

19

What do you want people to believe? How do you want them to behave?

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Contents

Find Common Ground

21

Resonate through empathy.

Section 2: MESSAGE Develop persuasive content. Define Your Big Idea

27

Clearly state your point of view—and what’s at stake.

Generate Content to Support the Big Idea

29

When you’re brainstorming, more is more.

Anticipate Resistance

33

Think through opposing perspectives.

Amplify Your Message Through Contrast

37

Create and resolve tension.

Build an Effective Call to Action

39

Get things done!

Choose Your Best Ideas

43

Sort and filter.

Organize Your Thoughts

47

Outline your presentation by writing clear, active slide titles that hang together.

Balance Analytical and Emotional Appeal

51

Stay credible while you reel people in.

Lose the Jargon

55

Is your language clear enough to pass the “grandmother test”?

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Contents

Craft Sound Bites

59

Good ones get repeated, tweeted, and heeded.

Section 3: STORY Use storytelling principles and structure to engage your audience. Apply Storytelling Principles

63

Make your presentation stick.

Create a Solid Structure

65

Storytelling principles provide a framework.

Craft the Beginning

67

Establish the gap between what is and what could be.

Develop the Middle

71

Build tension between what is and what could be.

Make the Ending Powerful

73

Describe the new bliss.

Add Emotional Texture

75

Decisions are not made by facts alone.

Use Metaphors as Your Glue

81

Memorable themes help rally an audience.

Create Something They’ll Always Remember

83

Drive your big idea home.

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Contents

Section 4: MEDIA Identify the best modes for communicating your message. Choose the Right Vehicle for Your Message

91

Slide decks aren’t always the answer.

Make the Most of Slide Software

95

It’s not just for slides.

Determine the Right Length for Your Presentation

99

Keep your audience engaged by budgeting your time.

Persuade Beyond the Stage

103

Communicate before, during, and after your presentation.

Share the Stage

107

Mixing in experts and media holds interest.

Section 5: SLIDES Conceptualize and simplify the display of information. Think Like a Designer

111

Visuals should convey meaning.

Create Slides People Can “Get” in Three Seconds

113

Do they pass the glance test?

Choose the Right Type of Slide

117

Bullets aren’t the only tool.

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Contents

Storyboard One Idea per Slide

123

Plan before you create.

Avoid Visual Clichés

127

Make your slides stand out.

Arrange Slide Elements with Care

129

Make your visuals easier to process.

Clarify the Data

137

Emphasize what’s important, remove the rest.

Turn Words into Diagrams

143

Use shapes to show relationships.

Use the Right Number of Slides

149

Size up your situation before building your deck.

Know When to Animate

151

. . . and when it’s overkill.

Section 6: DELIVERY Deliver your presentation authentically. Rehearse Your Material Well

155

Roll with the unexpected and fully engage with the audience.

Know the Venue and Schedule

159

Control them when you can.

Anticipate Technology Glitches

163

Odds of malfunction are high.

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Contents

Manage Your Stage Fright

167

Exercises to calm your nerves.

Set the Right Tone for Your Talk

169

You never get a second chance to make a first impression.

Be Yourself

171

Authenticity connects you to others.

Communicate with Your Body

175

Physical expression is a powerful tool.

Communicate with Your Voice

179

Create contrast and emphasis.

Make Your Stories Come to Life

181

Re-experience them in the telling.

Work Effectively with Your Interpreter

183

Pay attention to chemistry, pacing, and cultural resonance.

Get the Most out of Your Q&A

187

Plan, plan, plan.

Build Trust with a Remote Audience

191

Get past technology’s barriers.

Keep Remote Listeners Interested

195

You’re fighting for the attention of multitaskers.

Keep Your Remote Presentation Running Smoothly

199

Use this checklist to minimize annoyances.

xii

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Contents

Section 7: IMPACT Measure—and increase—your presentation’s impact on your audience. Build Relationships Through Social Media

205

Engage with users so they’ll engage fully and fairly with your ideas.

Spread Your Ideas with Social Media

211

Facilitate the online conversation.

Gauge Whether You’ve Connected with People

215

Gather feedback in real time and after your talk.

Follow Up After Your Talk

219

Make it easier for people to put your ideas into action.

Index

223

About the Author

229

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Introduction If I am to speak for ten minutes, I need a week for preparation; if fifteen minutes, three days; if half an hour, two days; if an hour, I am ready now. —Woodrow T. Wilson

We work in a first-draft culture. Type an e-mail. Send. Write a blog entry. Post. Whip up some slides. Speak. But it’s in crafting and recrafting—in iteration and rehearsal—that excellence emerges. Why worry about being an excellent communicator when you have so many other pressing things to do? Because it will help you get those things done. So as you conceive, visualize, and present your message, don’t skimp on preparation, even if you’re giving a short talk. It actually takes more careful planning to distill your ideas into a few key takeaways than it does to create an hour-long presentation (see figure I-1). And gather lots of feedback so you’ll be all the more effective when you start the process again.

xv

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Introduction

FIGURE I-1

Planning a presentation IMPACT

AUDIENCE

Measure and increase your presentation’s impact on your audience

Know your audience and build empathy

MESSAGE Develop persuasive content

PRESENTING CONCEIVING

VISUALIZING DELIVERY Deliver your presentation authentically

STORY Use storytelling principles and structure to engage your audience

SLIDES Conceptualize and simplify the display of information

MEDIA Identify the best modes for communicating your message

Since 1990, I’ve run a firm that specializes in writing and producing presentations—and then I became a presenter myself. This book is loaded with insights learned from supporting other presenters and giving my own talks. But, trust me, I’ve had my share of embarrassing moments, many of which could have been avoided with a little planning. Loading the wrong presentation onto

xvi

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Introduction

my laptop. Walking onstage with my skirt tucked into my underwear. Botching my delivery to executives at an $8 billion company because I hadn’t rehearsed enough— and getting cut from their continuing series of meetings. Experience is a powerful teacher. I’ve also learned a lot from success. When audiences can see that you’ve prepared—that you care about their needs and value their time—they’ll want to connect with you and support you. You’ll get people to adopt your ideas, and you’ll win the resources to carry them out. You’ll close more deals. You’ll earn the backing of decision makers. You’ll gain influence. In short, you’ll go farther in your organization—and your career.

Special thanks to: • The wonderful Lisa Burrell, who edited my mess into coherence • The entire team at Duarte, who supported me with case studies • Members of the Twitterverse who answered my questions: @annzerega, @caddguru, @carolmquig, @catiehargrove, @charlesgreene3, @ckallaos, @conniewinch, @iamanshul, @karlparry, @managebetternow, @matthewmccull, @moniquemaley, @mpacc, @speakingtall, and @zupermik

xvii

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Section 1

Audience Designing a presentation without an audience in mind is like writing a love letter and addressing it “to whom it may concern.” —Ken Haemer, Presentation Research Manager, AT&T

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Understand the Audience’s Power When you walk into a room as a presenter, it’s easy to feel as if you’re in a position of power: You’re up front, perhaps even elevated on a stage, and people came to hear you speak. In reality, though, you’re not the star of the show. The audience is. Why? The people you’re addressing will determine whether your idea spreads or dies, simply by embracing or rejecting it. You need them more than they need you. Since they have that control, it’s crucial to be humble in your approach. Use their desires and goals as a filter for everything you present. Presenters tend to be self-focused. They have a lot to say, they want to say it well, and they have little time to prepare. These pressures make them forget what’s important to the audience. A self-focused presenter might just describe a new initiative and explain what needs to get done—outlining how to do it, when to do it, and the budget required. Then maybe, if the audience is lucky, he’ll have a slide at the very end about “why it matters.”

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Audience

This format screams, “I pay you to do this, so just do it!” The presenter is so consumed by the mission that he forgets to say why people would want or need to be involved. Spend a moment in your audience’s shoes. Walk people through why the initiative matters to them and to the organization, what internal and external factors are driving it, and why their support will make it successful. Yes, get through the nitty-gritty details, but set up the valuable role they’ll play in the scenario rather than dictate a laundry list of to-do’s. Though presentations and audiences vary, one important fact remains constant: The people in your audience came to see what you can do for them, not what they must do for you. So look at the audience as the “hero” of your idea—and yourself as the mentor who helps people see themselves in that role so they’ll want to get behind your idea and propel it forward. Think of Yoda—a classic example of a wise, humble mentor. In the Star Wars movies, he gives the hero, Luke Skywalker, a special gift (a deeper understanding of the “Force”), trains him to use a magical tool (the lightsaber), and helps him in his fight against the Empire. Like Yoda and other mentors in mythology, presenters should: • Give the hero a special gift: Give people insights that will improve their lives. Perhaps you introduce senior managers at your company to an exciting new way to compete in the marketplace. Or maybe you show a roomful of potential clients that you can save them money and time.

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Understand the Audience’s Power

• Teach the hero to use a “magical” tool: This is where the people in your audience pick up a new skill or mind-set from you—something that enables them to reach their objectives and yours. • Help the hero get “unstuck”: Ideally, you’ll come with an idea or a solution that gets the audience out of a difficult or painful situation. So if you’re gearing up to launch a new service offering, for example, give your team a clear roadmap (tool) and a promise to bring in consultants for training and support (gift)—and describe how these will help everyone rise to the challenge ahead.

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Segment the Audience If you see your audience as a homogenous, faceless clump of people, you’ll have a hard time making a connection and moving them to action. Instead, think of them as a line of individuals waiting to have a conversation with you. Your audience will usually include a mix of people— individuals in diverse roles, with various levels of decision-making authority, from different parts of the organization—each needing to hear your message for different reasons. Decide which subgroup is the most important to you, and zero in on that subgroup’s needs when you develop your presentation. When you’re segmenting your audience, take a look at: • Politics: Power, influence, decision process • Demographics: Age, education, ethnicity, gender, and geography • Psychographics: Personality, values, attitudes, interests, communities, and lifestyle 7

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Audience

• Firmographics: Number of employees, revenue size, industry, number of locations, location of headquarters • Ethnographics: Social and cultural needs After you’ve segmented the group, figure out which members will have the greatest impact on the adoption of your idea. Is there a layer of management you need to appeal to? Is there a type of customer in the room with a lot of sway over the industry? Then view yourself as a curator of content for your most valuable and powerful stakeholders. Pick the one type of person in the room with the most influence, and write your presentation as if just to that subgroup. The presentation can’t be so specialized that it will alienate everyone else—you’ll need some content that appeals to the greater group. But tailor most of your specifics to the subgroup you’ve targeted. Say you’re presenting a new product concept to the executive team, and you know you won’t get their buyin unless Trent, the president of the enterprise division, gets excited about the idea, because they always defer to his instincts on new initiatives. Appeal first to Trent’s entrepreneurial nature by describing how exciting the new market is—while keeping in mind what the other executives will care about. Here’s where your segmentation work will come in handy (table 1–1). Draw on your understanding of the team members as you prepare your talk. In addition to fanning the flames of Trent’s entrepreneurism, for example, have data in your pocket to respond to Marco, the analytical and

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Segment the Audience

TABLE 1-1

Segmenting your audience Executive team member

Qualities

Bert, CEO

Hierarchical, micromanager, dominant, fear-driven, needs to be liked

Carol, president of Consumer division

Visionary, creative, disruptive, scattered, wants to stand on own feet

Trent, president of Enterprise division

Entrepreneurial, design thinker, systematic, found self after near-death experience

Martin, CMO

CEO’s favorite, empirically minded, arrogant, sabotages projects

Marco, CTO

Political, risk-averse, analytical, introverted, has self-doubt

risk-averse CTO, when he inevitably balks. And try to work with, not against, your CMO’s arrogance: Ask for his counsel on a key marketing point or two before the group meets, and he’ll be less likely to lash out during the presentation or sit there quietly plotting a coup, as is his wont. What if some audience members are already familiar with your idea and others need to be brought up to speed? (This is most likely to happen when you’re presenting within your organization.) Consider evening things out by giving the newbies a crash course before you conduct the larger presentation. Or you may decide just to do two separate presentations.

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Present Clearly and Concisely to Senior Executives Senior executives are a tough segment to reach. They usually have very little time in their schedules to give you. Though that’s true of many audiences, what sets this crowd apart is that they need to make huge decisions based on accurate information delivered quickly. Long presentations with a big reveal at the end do not work for them. They’ll want you to get to the bottom line right away—and they often won’t let you finish your shtick without interrupting. (Never mind that you would have answered their questions if they’d just let you get through the next three slides.) When presenting to an audience of senior executives, do everything you can to make their decision making easier and more efficient: • Get to the point: Take less time than you were allocated. If you were given 30 minutes, create your talk within that timeframe but then pretend that 11

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Audience

your slot got cut to 5 minutes. That’ll force you to be succinct and lead with the things they care about—high-level findings, conclusions, recommendations, your call to action. Hit those points clearly and simply before you venture into supporting data or tangential areas of importance to you. • Give them what they asked for: Stay on topic. If you were invited to give an update about the flooding of the manufacturing plant in Indonesia, do that before covering anything else. They’ve invited you because they felt you could supply a missing piece of information, so answer that specific request quickly. • Set expectations: At the beginning, let the audience know you will spend the first 5 of your 30 minutes presenting your summary and the remaining time on discussion. Most executives will be patient for 5 minutes and let you present your main points well if they know they’ll be able to ask questions fairly soon. • Create executive summary slides: Develop a clear, short overview of your key points, and place it in a set of executive summary slides at the front of the deck; have the rest of your slides serve as an appendix. Follow a 10% rule of thumb: If your appendix is 50 slides, devote about 5 slides to your summary at the beginning. After you present the summary, let the group drive the conversation.

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Present Clearly and Concisely to Senior Executives

Often, executives will want to go deeper on the points that will aid their decision making. You can quickly pull up any slides in the appendix that speak to those points. • Rehearse: Before presenting, run your slides by someone who has success getting ideas adopted at the executive level and who will serve as an honest coach. Is your message coming through clearly and quickly? Do your summary slides boil everything down into skimmable key insights? Are you missing anything your audience is likely to expect? Sounds like a lot of work, right? It is, but presenting to an executive team is a great honor and can open tremendous doors. If you nail this, people with a lot of influence will become strong advocates for your ideas.

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Get to Know Your Audience Segmenting your audience members politically, demographically, psychographically, and so on is a great start, but connecting with people means understanding them on a more personal level. To develop resonant content for them, dig for deeper insights about them. Ask yourself: • What are they like? Think through a day in their lives. Describe what that looks like so they’ll know you “get” them. • Why are they here? What do they think they’re going to get out of this presentation? Are they willing participants or mandatory attendees? Highlight what’s in it for them. • What keeps them up at night? Everyone has a fear, a pain point, a thorn in the side. Let your audience know that you empathize—and that you’re here to help.

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Audience

• How can you solve their problems? How are you going to make their lives better? Point to benefits you know they’ll care about. • What do you want them to do? What’s their part in your plan? Make sure there’s a clear action for your audience to take. (See “Build an Effective Call to Action” in the Message section of this guide.) • How might they resist? What will keep them from adopting your message and carrying out your call to action? Remove any obstacles you can. • How can you best reach them? How do they prefer to receive information? Do they like the room to be set up a certain way? Do they want materials to review before the presentation? Afterward? What atmosphere or type of media will best help them see your point of view? Give them what they want, how they want it. When getting ready to present to an audience you’ve never met, do some research online. If you know the names of stakeholders in your audience, look up their bios. If you know only generalities about the audience, find the event on social media feeds and read what’s on the minds of those who’ll be attending. If you’ll be presenting to a company, find recent press mentions, look at how the company positions itself against competitors, read its annual report, and have Google Alerts send new articles about the company to your e-mail. One time, I was preparing to present to beer executives, and I don’t like beer or know anything about the

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Get to Know Your Audience

industry. So I hosted a beer-tasting event at my shop, read their annual report, read recent press, studied key influencers, and looked up each attendee online. During the Q&A, a question came from one of the top executives (I knew he was at the top because I’d looked him up)— and I answered his question with timely examples. When your audience is familiar—say, a group of your direct reports or colleagues—think through the pressures they are under and find ways to create an empathic connection. Knowing people—really knowing them—makes it easier to influence them. You engage in a conversation, exchange insights, tell stories. Usually, both you and they change a bit in the process. People don’t fall asleep during conversations, but they often do during presentations—and that’s because many presentations don’t feel conversational. Knowing your audience well helps you feel warmly toward the people in the room and take on a more conversational tone. Speak sincerely to your audience, and people will want to listen to your message and root for and contribute to the success of your idea.

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Define How You’ll Change the Audience When you present, you’re asking the people in the room to change their behavior or beliefs in some way, big or small. Before you begin writing your presentation, map out that transformation—where your audience is starting, and where you want people to end up. This is the most critical step in planning your presentation, because that desired endpoint is the whole reason you’re presenting in the first place, and people won’t get there on their own. Ask yourself, “What new beliefs do I want them to adopt? How do I want them to behave differently? How must their attitudes or emotions change before their behavior can change?” By thinking through who they are before they enter the room and who you want them to be when they leave, you’ll define their transformation arc, much as a screenwriter plans the protagonist’s transformation in a film.

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Audience

Let’s say you work in the development office at a university and you’re delivering a presentation to potential donors. The audience transformation might look like the one shown in table 1-2. TABLE 1-2

Transforming your audience Move audience from:

Move audience to:

Skepticism that the school will make good use of the money

Excitement about innovative research by faculty, students, and alumni—and an impulse to give

Change typically doesn’t happen without a struggle. It’s hard to convince people to move away from a view that is comfortable or widely held as true, or change a behavioral pattern that has become their norm. You are persuading members of your audience to let go of old beliefs or habits and adopt new ones. Once you understand their transformation, you can demonstrate empathy for the sacrifices they may need to make to move your idea forward.

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Find Common Ground Whether you evoke frenzied enthusiasm or puzzled stares or glassy-eyed boredom depends largely on how well your message resonates with the audience. Resonance is a physics phenomenon. If you tap into an object’s natural rate of vibration, or resonant frequency, it will move: It may vibrate, shudder, or even play a sympathetic musical note—think tuning forks. The same is true, metaphorically, when you present to an audience. If you tap into the group’s resonant frequency, you can move the people listening to you. But how do you resonate deeply enough to move them toward your objective? Figure out where you have common ground, and communicate on that frequency. Think about what’s inside them that’s also inside you. That way, you’re not pushing or pulling them; they’re moving because you tapped into something they already believe. All this may sound highly unscientific and touchyfeely, but you can find your audience’s resonant frequency by doing a little research. You’ll want to examine:

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Audience

• Shared experiences: What from your past do you have in common. Do you share memories, historical events, interests? • Common goals: Where are you all headed in the future? What types of outcomes are mutually desired? • Qualifications: Why are you uniquely qualified to be the audience’s guiding expert? What did you learn when you faced similar challenges of your own, and how will your audience benefit from that insight? The amount of common ground you discover will depend on the depth of your relationship with the group.

Lots of common ground If you are presenting to family, friends, club members, or a religous group, it’s easy to find common ground because you know the people well and tend to share many experiences, interests, and values.

Moderate common ground With your colleagues, the challenge is a bit tougher. You know them a bit, but not as much as close friends or relatives. You share some interests but possibly only around one or two things. Examine those points of intersection for a way in. Let’s say you’re a scientist working for a biotech company and you’ve been asked to speak at an all-hands meeting. Most of the audience members will be scien-

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Find Common Ground

tists, but you’ll also be addressing executives and administrative employees. To find common ground with them, think about why you decided to work for this company and what motivates you to do your job day to day. Maybe you wanted to use your research and problem-solving skills to help people stay healthy—a mission the others in the room will share or at least support. Finding such commonalities will help you connect with them.

Minimal common ground With a broad audience—for instance, a group of seminar participants from a variety of organizations and industries—you’ll have many types of people to think about. The overlap won’t be immediately evident, because there are so many perspectives and backgrounds to consider. You’ll need to work hard to find or create it, but that work will pay off. Before I went to China on a book tour, for example, I researched communication and storytelling in modern and ancient Chinese culture. I identified three great communicators in Chinese history and analyzed their speeches. When I shared my analysis with audiences, it was clear to them that I understood the historical context surrounding the speeches—I could even provide detailed answers to their questions about it. I got feedback multiple times on that trip that people could see I cared enough to really study and understand their perspective.

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Section 2

Message Are ideas born interesting or made interesting? —Chip and Dan Heath, authors of Switch: How to Change Things When Change Is Hard

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Define Your Big Idea Your big idea is that one key message you must communicate. It’s what compels the audience to change course. (Screenwriters call this the “controlling idea.”) It has two components: • Your point of view: The big idea needs to express your perspective on a subject, not a generalization like “Q4 financials.” Otherwise, why present? You may as well e-mail your stakeholders a spreadsheet and be done with it. • What’s at stake: You’ll also want to convey why the audience should care about your perspective. This helps people recognize their need to participate rather than continue with the status quo. Express your big idea in a complete sentence. It needs a subject (often some version of “you,” to highlight the audience’s role) and a verb (to convey action and elicit emotion).

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When asked, “What’s your presentation about?” most people answer with a phrase like “Software updates.” That’s not a big idea; it’s a topic—no point of view, no stakes. Change it to “Your department needs to update its workflow management software,” and you’re getting closer. You’ve added your point of view, but the stakes still aren’t clear. So try this instead: “Your department will struggle to meet key production deadlines until we update the workflow management software.” Another example: If you say your presentation is about “the Florida wetlands,” that’s also just a topic. Add your point of view and what’s at stake. For instance: “We need to restrict commercial and residential development in Florida’s wetlands, because we’re destroying the fragile ecosystem there and killing off endangered species.” People will move away from pain and toward pleasure. Prod them (with words like “struggle” from the first example; “destroying” and “killing” from the second) so they feel uncomfortable staying in their current position. Lure them toward your idea with encouragement and rewards (the promise of meeting deadlines; protection of endangered species).

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Generate Content to Support the Big Idea Now that you’ve articulated your big idea, it’s time to create your content, but don’t fire up your presentation software quite yet. Software forces linear thinking—one slide after another—so it’s not the best tool for early brainstorming. Instead, change up your usual environment. Move to a new room, turn off your e-mail and cell phone, maybe play some music. Use tactile tools like paper, whiteboards, and sticky notes. Generate as many ideas as possible by: • Gathering existing content: You don’t have to start from scratch. Dig up other presentations, industry studies, news articles, reports, surveys—anything that’s relevant to your big idea. • Building on existing content: Push on the ideas in the content you’ve gathered. Challenge them,

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Message

or consider them from a new angle. Draw new connections. • Creating new content: Be curious, take risks, and let your intuition guide you. Experiment and dream. For brainstorming to be successful, you have to suspend judgment and stay receptive to seemingly unrelated ideas—they may lead to something great. Increase your creative yield by moving back and forth between brainstorming alone and brainstorming in a group.

Brainstorm alone It’s intimidating to approach a blank piece of paper or whiteboard, but you have to start somewhere. Write down a key word and riff off that. Let your mind move in random directions. Then draw connections with lines. Keep brainstorming until you have a messy web of concepts and relationships to explore. This is called mind mapping (see figure 2-1). You can get special software to do it, but paper or sticky notes will work just as well.

Brainstorm in a group When you work with others, you get more gems to choose from—and someone else’s idea may spark even more creative ones in you. Be extra kind to the folks with enough guts to put half-baked or embarrassing ideas out there. Treat every idea as valuable. Have someone facilitate and capture the ideas so the discussion can move at a fast clip (if it slows down, people will start to question and censor themselves). Or ask brainstormers to scribble ideas on

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Generate Content to Support the Big Idea

FIGURE 2-1

Mind map

SE

DIP REN

S ITOU ITERA TIVE

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IP PRINC

REVENUE

QU VOLUM ALITY E SPEED PR OF IT

METR

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INDUSTRY ISSUES &TRENDS

ENAB

PAR TN

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INHIB

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ST SHI AR CU PS D TUP OE RISK L I CULTURE S R S EN ULA TE TECH NS RP I NOL RIS AL O HIC ES C RISK GY R RA ADAPT HIE IV E RE RE MARKET RISK INS SEARC OSU P TITU H X TION IP E ENTREPRENEURIAL S

sticky notes and post them on a wall. Sticky notes are the perfect brainstorming tool. They’re small, convenient, and moveable—great for collecting and organizing material. Limit yourselves to one idea per sticky note so it’s easier to sort and cluster thoughts.

Brainstorm alone again Take the seeds of ideas that came from the rapid-fire group session and do another round of quiet brainstorming on your own. This will give those latent ideas a chance to develop.

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Go for quantity, not quality. You may work your way through five, ten, twenty ideas until you find ones that are distinctive and memorable. This is not the time to edit yourself. Even if an idea has been expressed or used before, add it to the mix. You may later find a unique way of incorporating it.

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Anticipate Resistance As a presenter, you’re asking people to change their beliefs or behavior. That’s not something they’ll enjoy or find easy, so every audience will resist in some way. People will adamantly defend their own perspectives to avoid adopting yours. While listening to you, they’ll catalog what they hear. Having come into the room with their own knowledge and biases, they’ll constantly evaluate whether what you say fits within or falls outside their views. So think through why and how they might resist, and plan accordingly. Here are the most common types of resistance, and how to get ready for them:

Logical resistance: Can you find logical arguments against your perspective? Dig up articles, blog posts, and reports that challenge your stance to familiarize yourself with alternate lines of reasoning. This kind of research prepares you for skeptical questions and comments you may have to field—and it helps you

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develop a deeper understanding of the topic and a more nuanced point of view.

Emotional resistance: Do the people you’re addressing hold fast to a bias, dogma, or moral code—and does your idea violate that in some way? Hitting raw nerves will set off an audience, so proceed carefully. For example, if you’re at a medical conference launching a new HPV vaccination for kids, also emphasize the importance of abstinence in youth.

Practical resistance: Is it physically or geographically difficult for the audience to do what you’re asking? Will it take more financial means than people have? Be sensitive if you’re asking employees to hang in there as you temporarily freeze salaries to weather a recession, for instance, or giving your team a deadline that will take nights and weekends to meet. Acknowledge the sacrifices people are making—and show that you’re shouldering some of the burden yourself. Say that your salary will be frozen, too. Or explain that you’ll be in 24/7 mode right along with your team until the big project is wrapped up—and that everyone will get comp time afterward. Prepare for these types of resistance, and you’ll stand a much better chance of winning over an entrenched audience. You can raise and address concerns before they become mental roadblocks—for example, by sharing at the beginning of your talk that you too were skeptical until you’d looked more closely at the data, or by meeting with particularly tough critics in advance to “pre-sell”

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Anticipate Resistance

your ideas. By showing that you’ve considered opposing points of view, you demonstrate an open mind—and invite your audience to respond in kind. If you’re struggling to come up with opposing viewpoints, share your big idea with others and ask them to pressure-test it. You may be so deeply connected to your perspective that you’re having a hard time anticipating the most simple and obvious forms of resistance. Use your boss as a sounding board as you prepare to speak to the executive committee, for example. Or ask a key stakeholder for a reality check before you present to other managers in her group.

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Amplify Your Message Through Contrast People are naturally drawn to contrast because life is filled with it: Day and night. Male and female. Love and hate. A skilled communicator captures an audience’s interest by creating tension between contrasting elements— and then provides relief by resolving that tension. It’s how you build a bridge between others’ views and yours. Try brainstorming ideas around polar opposites such as the ones in table 2-1. TABLE 2-1

Dynamic opposites Past/present Need Speed Ambition Stagnation Roadblocks Sacrifice Budget

Future Fulfillment Endurance Humility Growth Clear passage Reward Quality

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Suppose you manage an airline’s maintenance division, and you’re asking for money to invest in analytics. Table 2-2 shows pairs of opposites you might explore as you figure out how to make your case. TABLE 2-2

Using the tension of extremes Customer complaints

Customer satisfaction

We’re getting low ratings on customer surveys because of flight delays and missed connections caused by simple maintenance issues.

What if we could better schedule our planes’ maintenance by digging into our repair data?

We currently follow the manufacturer’s recommended maintenance schedule—and it’s not sufficient. Planes get held up at the gate while mechanics do routine repairs.

By tracking and studying how often we actually perform certain kinds of repairs, we can create a schedule that’s more realistic. We’ll be able to prevent problems instead of fixing them when they pop up.

By embracing the tension between the extremes, you can propel your message—and the movement will feel natural. The familiar will comfort people; the new will stimulate them and keep them interested. Generate plenty of content on both sides of the contrast or you’ll lose momentum—and your audience.

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Build an Effective Call to Action Presentations move people to act—but only if you explicitly state what actions you want them to take, and when. Are you asking them to be doers, suppliers, influencers, or innovators (see table 2-3)? To get to this list of four things an audience can do for you, I read hundreds of speeches and classified their calls to action. Whether your audience is corporate, political, scientific, or academic, the people you’re addressing should fall into one of these categories. Make it clear what you need to accomplish together and break that down into discrete tasks and deadlines that feel manageable to the audience. Let’s consider an example where the call to action is to “innovate”—since that can be tough to pull off. Suppose you have an aging product that needs reinvention. Not all great ideas have to come from engineering. So after you say that the

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organization is open to ideas from all departments, you might break down the tasks like this: • Identify enthusiastic brainstormers from all departments. • Have engineers facilitate a cross-departmental brainstorming session that week. • Assign a team member to take notes. • Filter ideas at the engineering summit the following week. You might ask everyone to take just one action, or you might provide a few actions people can choose from. Either way, be explicit in your request—and about how it will benefit the audience.

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Instigate activities

Doers are the worker bees. Once they know what needs to get done, they’ll take on the tasks. They also recruit and motivate others to complete important activities.

What they do for you

How they do it

Doers

What your audience can do for you

TABLE 2-3

Suppliers are the people with resources—financial, human, or material. They have the means to get you what you need to move forward.

Get resources

Suppliers

Influencers can sway individuals or groups, large or small, mobilizing them to adopt and evangelize your idea.

Change perceptions

Influencers

Innovators think outside the box for new ways to add value to and spread your idea. They create strategies, perspectives, and products.

Generate ideas

Innovators

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Choose Your Best Ideas Up to this point, we’ve been focusing on how to generate presentation ideas and content. That’s actually the easy part. It’s much harder to trim everything down so only the most effective messages remain. But the quality of your presentation depends as much on what you choose to remove as on what you choose to include. Many of your ideas may be fascinating and clever, but you can’t fit them all in—and no one wants to hear them all, anyway. Connect, analyze, sort, and filter the ideas so you use only the ones that will yield the best outcomes. Designers call this part of the process convergent thinking, and they refer to its opposite, idea generation, as divergent thinking (see figure 2-2). As Tim Brown, the CEO of IDEO, explains: “In the divergent phase, new options emerge. In the convergent phase, it is just the reverse. Now it’s time to eliminate options and make choices.” Your primary filter should be your big idea (see “Define Your Big Idea” at the beginning of the Message section). Everything you keep in your talk must support it.

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FIGURE 2-2

Filter your best ideas Divergent thinking Generate lots st of ideas mo idea , t s s Fir viou ob

Convergent thinking Filter best ideas

Random crazy idea

If you don’t filter your presentation, the audience will have to—and people will resent you for making them work too hard to identify the most important points. Cut mercilessly on their behalf. Say you’re presenting a business case for acquiring a company. You might brainstorm things to cover, like: • The competencies your company would gain • Estimated return on investment • Lessons learned from the last acquisition • Threat R&D might perceive • Bringing in culture consultants

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Choose Your Best Ideas

• Receivables are at net 45 days • Need to retool the factory floor All these ideas fit into the big idea except the fact that receivables are at net 45 days. Though that may be important, it would be a distraction during this meeting. Save it for another meeting. Even if all you do is sort and filter the ideas you’ve generated, you’re technically ready to present. You can place your sticky notes on the inside of a file folder and use those as your speaking notes, as I did at a launch party for my book Resonate. I had only to glance down once in a while. Or you can begin to put your ideas into the presentation software of your choice.

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Organize Your Thoughts Because presentation programs such as PowerPoint are visual tools, we often jump too quickly into visually expressing our ideas when we use them—before we’ve spent enough time arranging our thoughts and crafting our words. When moving ideas from sticky notes to software, enter each point you plan to cover as a clearly worded title in outline or slide-sorter mode rather than going straight to slide-creation mode (figure 2-3). That allows you to read the titles in sequence, without the distractions of supporting details or graphics, to make sure your presentation flows from point to point. Ask yourself, “If people read just the titles, will they get what I’m saying?” That’s not just an academic exercise. You really want to know the answer, because your audience members often won’t read past your slide titles when you present. They’ll scan them the way they do headlines of news articles—and make snap decisions

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FIGURE 2-3

Convey a clear message with each title

about whether they’d like to learn more. So convey a clear message with each title, arrange them in an order that will make sense to your audience, and infuse them with personality where you can. You’ll want to come across as a real person, not an automaton. Include verbs to show action. Compare the examples shown in table 2-4.

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TABLE 2-4

Convey clear meaning with titles Vague, passive

Clear, active

Market overview

We’re neck-and-neck with an aggressive rival.

Productivity gains

Production time shrank from 21 days to 8.

Agonize over your titles as marketing copywriters do in their campaigns to get more click-throughs and sales. You, too, are selling something—your big idea—and the more quickly you grab people’s attention, the higher your “conversion rate” will be.

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Balance Analytical and Emotional Appeal Now that you’ve outlined your message, consider how you’ll appeal to people’s minds and hearts. Strike the wrong balance of analytical and emotional content in your presentation, and you risk alienating the audience and diminishing your credibility. But how do you get it right? Take your cues from the topic and the audience. Certain topics—like layoffs and product launches— are inherently charged and naturally lend themselves to emotional appeal. Others—like science, engineering, and finance—invite more analytic treatment. Weigh the subject against the group you’re addressing. Suppose you’re making a case for personnel cuts to a group of managers who’ll soon have to decide which direct reports to let go. They may see you as cold and inhumane if you focus primarily on cost savings, with nary a word about people losing jobs. A numbers-based

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approach will probably go over better with a group of executives charged with improving the bottom line— though even they will expect you to at least acknowledge that layoffs are difficult. No presentation should be devoid of emotional content, no matter how cerebral the topic or the audience. In a business setting, it may feel more comfortable to just “state the facts,” but look through your deck and see if you can add emotional texture to any content that’s purely analytical (see figure 2-4). FIGURE 2-4

Strike a balance Analytical Features Data/evidence Exhibits Logical arguments Proofs Examples Case studies

Emotional Benefits illustrated through stories (personal, true, fictional) Metaphors and analogies that make data meaningful Thought-provoking questions Slow reveal (builds suspense)

There are two basic classes of emotion: pain and pleasure. Determine how you’d like people to feel at various points in your presentation. Where would you like them to feel happy? To cringe? To be inspired? Ask “why” questions to unearth your big idea’s emotional appeal. For example, if you’re requesting funding to pay for cloud storage, start by asking, “Why do we need to buy cloud storage?” Your answer may be “to facilitate

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Balance Analytical and Emotional Appeal

data sharing with colleagues in remote locations.” So then ask, “Why do we need to facilitate data sharing with colleagues in remote locations?” Eventually you’ll get to the human beings whose lives will be affected by your idea, and that’s where you’ll discover your emotional appeal: Maybe you need cloud storage “to help those remote colleagues coordinate disaster relief efforts and save lives.” Once you know what that hook is, use words or phrases that have emotional weight to them—like “save lives” in the cloud example above. Tell personal stories with conviction and describe not just what people did, but how they felt. (See “Add Emotional Texture” in the Story section of this guide.)

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Lose the Jargon Have you ever listened to a presenter who sounded supersmart—without having any idea what she really said? Each field has its own lexicon, filled with words that are familiar to experts but foreign to everyone else. Even different departments within the same organization use niche language and acronyms that mean nothing to other groups. And the more companies and individuals innovate within their areas of expertise, the bigger and gnarlier their vocabularies get. Unless you’re presenting to a roomful of specialists cut from the same cloth, don’t assume that everyone will understand your jargon. Modify your language so it resonates with the people whose support and influence you need. If they can’t follow your ideas, they won’t adopt them. What’s more, delivering abstruse presentations can hurt your career. As communications coach Carmine Gallo puts it, “Speaking over people’s heads may cost you a job or prevent you from advancing as far as your capabilities might take you otherwise.” So lose the jargon. If a specialized term is central to your message, translate it. Would your grandmother 55

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understand what you’re talking about? Rework your message until it’s that clear. The presenter in the following example (figure 2-5) spoke to an audience of 800 people who could fund his

FIGURE 2-5

Drop the jargon Before: Developed from a scientific perspective

After: Reworked for a lay audience

I am currently the lead researcher developing a microbially induced brine-mining technology, where bacteria are employed to accumulate selected minerals from desalination brine, producing a minable sediment, which may indirectly reduce the cost of desalinated water and the environmental impact of the desalination process.

Desalination is a process that removes salt from water so it can be used for drinking and irrigation. Removing salt from water—in particular sea water—via reverse osmosis requires energy to produce clean water. This process also creates a toxic saltwater solution, or brine, that is generally dumped back out at sea and is harmful for the ecology of the receiving water body.

Initial experiments have shown how certain bacterial cultures are able to mine selected metals from desalination brine. I am now hoping to prove the economic viability of the process through qualitative and quantitative studies of the metals produced.

This is where my collaboration with bacteria comes in. Introducing bacteria into the brine draws out metals such as calcium, potassium, and magnesium from desalination brine. The value of magnesium alone in the volume of brine potentially needed for Singapore represents 4.5 billon U.S. dollars—indirectly lowering the cost of the desalinated water produced, while reducing the environmental impact of the process.

Conventional mechanical and chemical mining technologies are restrictive due to technological and economic constraints. Biological processes, however, present an efficient and environmentally benign alternative, which must be seen in the context of a future where urban ecological systems are in harmony with the ecological cycles of our planet.

Imagine a mining industry in a way it hasn’t existed before. Imagine a mining industry that doesn’t mean defiling the earth. Imagine bacteria helping us achieve this industry, as they accumulate and sediment minerals out of desalination brine. In other words, imagine a mining industry in harmony with nature.

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Lose the Jargon

idea but didn’t have deep knowledge of the science behind it. The first column shows what he said during rehearsal; the second shows what he said at the presentation, after he got feedback and reworked his talk for an intelligent lay audience.

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Craft Sound Bites Your words are now clear—but are they memorable? Will people share them with others? Great quotes get picked up and repeated—whether at the water cooler, in blog posts, or on social networking sites. Brilliant ones end up on the front pages of newspapers. So embed well-crafted sound bites into every talk. Steve Jobs made this an art form. He relied on rhetorical devices to drive his messages home and get pickup from audiences and press alike. Here are a few that he used to great effect:

Rhythmic repetition: Repeated phrase at beginning, middle, or end of a sentence. In 2010, Jobs had to deliver an emergency press conference about the performance of the antenna in the iPhone 4. If users held the phone a certain way, it dropped calls. As social media scientist Dan Zarrella, at HubSpot, points out, Jobs repeated the phrase “We want to make all our users happy” several times during his talk. Midway through, Jobs flashed a slide showing that the antenna issue affected only a fraction of users. Soon,

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a message appeared at the bottom: “We care about every user.” A few slides later: “We love our users.” Then “We love our users” appeared again on the next slide. And the next. And the next. “We love our users, we love them,” Jobs concluded. “We do this [provide a free phone case that will solve the problem] because we love our users.” That “love” was the message the press took away from his piece of “crisis communication.”

Concrete comparison: Simile or metaphor. In his iPhone keynote speech at MacWorld 2007, Jobs likened Apple’s switch to Intel processors to a “huge heart transplant.”

Slogan: A concise statement that’s easy to remember. At the iPhone launch, Jobs said “reinvent the phone” several times—and the slogan was all over the press release Apple sent out before his keynote. “Reinvent the phone” ended up in PCWorld ’s headlines the next day.

As Jobs did, take time to create repeatable sound bites. But don’t deliver them with a lot of fanfare. Make them appear spontaneous, so people will want to repeat them.

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Section 3

Story

[Stories] are the currency of human contact. —Robert McKee, author of Story: Substance, Structure, Style, and the Principles of Screenwriting

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Apply Storytelling Principles Stories have the power to win customers, align colleagues, and motivate employees. They’re the most compelling platform we have for managing imaginations. Those who master this art form can gain great influence and an enduring legacy. If you use stories in your presentation, the audience can recall what they’ve learned from you and even spread the word. Just as the plot of a compelling play, movie, or novel makes a writer’s themes more vivid and memorable, well-crafted stories can give your message real staying power, for two key reasons: • Stories feature transformation: When people hear a story, they root for the protagonist as she overcomes obstacles and emerges changed in some important way (perhaps a new outlook helps her complete a difficult physical journey). It’s doubly powerful to incorporate stories that demonstrate how others have adopted the same beliefs and

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Story

behaviors you’re proposing—that is, show others going through a similar transformation that your audience will go through. This will help you get people to cross over from their everyday world into the world of your ideas—and come back to their world transformed, with new insights and tools from your presentation. • Stories have a clear structure: All effective stories adhere to the same basic three-part structure that Aristotle pointed out ages ago: They have a beginning, a middle, and an end. It makes them easy to digest and retell—and it’s how audiences have been conditioned for centuries to receive information. Make sure your presentation—and any story you tell within it—has all three parts, with clear transitions between them. In this section of the guide, you’ll learn how to use storytelling principles to structure your presentation and incorporate anecdotes that add emotional appeal.

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Create a Solid Structure All good presentations—like all good stories—convey and resolve some kind of conflict or imbalance. The sense of discord is what makes audiences care enough to get on board. After gleaning story insights from films and books, studying hundreds of speeches, and spending 22 years creating customized presentations for companies and thought leaders, I’ve found that the most persuasive communicators create conflict by juxtaposing what is with what could be. That is, they alternately build tension and provide release by toggling back and forth between the status quo and a better way—finally arriving at the “new bliss” people will discover by adopting the proposed beliefs and behaviors. That conflict resolution plays out within the basic beginning-middle-end storytelling structure we all know and love (figure 3-1). The tips in this section will help you weave conflict and resolution throughout the beginning, middle, and end of your presentation.

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Story

FIGURE 3-1

Persuasive story pattern BEGINNING

MIDDLE

What could be

What could be

END

What could be

New bliss

Call to action

What is

What is

What is

What is

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Craft the Beginning Begin by describing life as the audience knows it. People should be nodding their heads in recognition because you’re articulating what they already understand. This creates a bond between you and them and opens them up to hear your ideas for change. After you set that baseline of what is, introduce your ideas of what could be. The gap between the two will throw the audience a bit off balance, and that’s a good thing—because it creates tension that needs to be resolved (figure 3-2). FIGURE 3-2

Create dramatic tension What could be

The gap

Contrast the commonplace with the lofty.

What is

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If you proposed what could be without first establishing what is, you’d fail to connect with the audience before swooping in with your ideas, and your message would lose momentum. The gap shouldn’t feel contrived—you wouldn’t say “Okay, I’ve described what is. Now let’s move to what could be.” Present it naturally so people will feel moved, not manipulated. For instance: What is: We’re fell short of our Q3 financial goals partly because we’re understaffed and everyone’s spread too thin. What could be: But what if we could solve the worst of our problems by bringing in a couple of powerhouse clients? Well, we can. Here’s another example: What is: Analysts have been placing our products at the top of three out of five categories. One competitor just shook up the industry with the launch of its T3xR—heralded as the most innovative product in our space. Analysts predict that firms like ours will have no future unless we license this technology from our rival. What could be: But we will not concede! In fact, we will retain our lead. I’m pleased to tell you that five years ago we had the same product idea, but after rapid prototyping we discovered a way to leapfrog that generation of technology. So today, we’re launch-

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Craft the Beginning

ing a product so revolutionary that we’ll gain a tenyear lead in our industry. Once you establish the gap between what is and what could be, use the remainder of the presentation to bridge it.

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Develop the Middle The middle is, in many ways, the most compelling part of your presentation, because that’s where most of the “action” takes place. People in your audience now realize their world is off-kilter—you’ve brought that to their attention and at least hinted at a solution at the beginning of your presentation. Now continue to emphasize the contrast between what is and what could be, moving back and forth between them, and the audience will start to find the former unappealing and the latter alluring. Let’s go back to that Q3 financial update example from “Craft the Beginning.” Revenues are down, but you want to motivate employees to make up for it. Table 3-1 shows one way you could approach the middle of your presentation. Earlier, you brainstormed around pairs of contrasting themes (see “Amplify Your Message Through Contrast” in the Message section). Try using one of those pairs—for instance, sacrifice versus reward—to drum up material to flesh out this structure. 71

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TABLE 3-1

Creating “action” in the middle of your story What is

What could be

We missed our Q3 forecast by 15%.

Q4 numbers must be strong for us to pay out bonuses.

We have six new clients on our roster.

Two of them have the potential to bring in more revenue than our best clients do now.

The new clients will require extensive retooling in manufacturing.

We’ll be bringing in experts from Germany to help.

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Make the Ending Powerful Your ending should leave people with a heightened sense of what could be—and willingness to believe or do something new. Here’s where you describe how blissful their world will be when they adopt your ideas. Let’s return to our Q3 example from “Craft the Beginning” and “Develop the Middle” in this section. You might wrap up your presentation along the lines of figure 3-3.

FIGURE 3-3

Making the ending powerful Call to action

New bliss

It will take extra work from all departments to make Q4 numbers, but we can deliver products to our important new clients on time and with no errors.

I know everyone’s running on fumes—but hang in there. This is our chance to pull together like a championship team, and things will get easier if we make this work. The reward if we meet our Q4 targets? Bonuses, plus days off at the end of the year.

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Many presentations simply end with a list of action items, but that isn’t exactly inspiring. You want the last thing you say to move your audience to tackle those items. You want people to feel ready to right the wrong, to conquer the problem. By skillfully defining future rewards, you compel people to get on board with your ideas. Show them that taking action will be worth their effort. Highlight: • Benefits to them: What needs of theirs will your ideas meet? What freedoms will the audience gain? How will your ideas give the audience greater influence or status? • Benefits to their “sphere”: How will your ideas help the audience’s peers, direct reports, customers, students, or friends? • Benefits to the world: How will your ideas help the masses? How will they improve public health, for instance, or help the environment? In the example above, we’ve called out a key benefit to the organization (making up for Q3 revenue shortfall), plus three benefits to employees (bonuses, time off, and—probably most important—the promise of a saner workload).

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Add Emotional Texture Now step back and review all your content so far. Do you have the right mix of analysis and emotion? (See “Balance Analytical and Emotional Appeal” in the Message section.) If you need more emotional impact, you can add it with storytelling. A message matters to people when it hits them in the gut. Visceral response, not pure analysis, is what will push your audience away from the status quo and toward your perspective. Stories elicit that kind of response. When we hear stories, our eyes dilate, our hearts race, we feel chills. We laugh, clap, lean forward or back. These reactions are mostly involuntary, because they’re grounded in emotion. While you’re describing what is, tell a story that makes people shudder, or guffaw at the ridiculousness of their situation, or feel disappointment. While you’re describing what could be, tell a story that strikes a little awe or fear into their hearts—something that inspires them to change.

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Table 3-2 shows a template (with an example plugged in) that can help you transform supporting information into a story with emotional impact. You may be thinking that people don’t go to work to feel; they go to get stuff done. But by making them feel, you move them to action—and help them get stuff done. It’s not about issuing a gushing, weepy plea. It’s about TABLE 3-2

Making an emotional impact with data Point you want to make

Every cross-divisional function could benefit from a steering committee.

Story about organizational change Beginning

When, who, where

A few years ago, the sales team tackled a crossdivisional problem with the help of a steering committee.

Middle

Context

At the time, all sales groups were independent.

Conflict

This means we were confusing customers with many different rules, processes, and formats.

Proposed resolution

So we decided to create a sales steering committee.

Complication

You can imagine how hard it was to reach agreement on anything.

Actual resolution

But we agreed to meet every two weeks to find common ground. Over the next year, we standardized all our processes and learned a lot from each other. The customers became much happier with our service.

End

Source: Glenn Hughes, SMART as Hell.

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adding emotional texture to the logical case you’ve built with data, case studies, and other supporting evidence. Personal stories told with conviction are the most effective ones in your arsenal. You can repeat stories you’ve heard, but audiences feel more affection for presenters who reveal their own challenges and vulnerability. Use relevant stories that are appropriately dramatic, or you may come across as manipulative or out of touch with reality. When giving an update at a small staff meeting on a project you’re leading, you wouldn’t tell a melodramatic story about the “just-in-time delivery” of multiple vendors you managed at your daughter’s wedding. It would waste everyone’s time. But one U.S. government official did effectively tell a story about his daughter’s wedding—to get new remotecommunication technology adopted in his organization. Many of his relatives couldn’t travel to the wedding, so he used a commercial version of the technology to push the wedding pictures quickly to the remote family members, helping all feel more included in the event. He argued that adopting the enterprise version of this technology would similarly include distant employees in the development of important agency initiatives. The senior executives not only understood this with their minds but felt it in their hearts. They could relate this story about a father doing his best to serve his family to their agency doing its best to serve the citizenry. Take out a notepad and start cataloging personal stories and the emotions they summon. This exercise takes time, but it will yield material you can draw on again and again. Do your first pass when you have an

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uninterrupted hour or so to reflect. You can use the checklist that follows to trigger your memory. As you recall past events, jot down how you felt when you experienced them.

Inventory of Personal Stories □ Important times in your life: Childhood, adolescence, young adulthood, later years □ Relatives: Parents, grandparents, siblings, children, in-laws □ Authority figures: Teachers, bosses, coaches, mentors, leaders, political figures, other influencers □ Peers: Colleagues, social networks, club members, friends, neighbors, teammates □ Subordinates: Employees, mentees, trainees, interns, volunteers, students □ Enemies: Competitors, bullies, people with challenging personalities, people you’ve been hurt by, people you’ve hurt □ Important places: Offices, homes, schools, places of worship, local hangouts, camps, vacation spots, foreign lands □ Things you cherish: Gifts, photos, certificates/ awards, keepsakes □ Things that have injured you: Sharp objects, animal bites, spoiled food, allergens

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Spending time with each item on this list, you’ll unearth many stories you’ve forgotten. Even after you’ve selected stories for whatever presentation you’re currently working on, save your notes and continue adding to them here and there, as you find time. They’ll come in handy when you’re creating future presentations.

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Use Metaphors as Your Glue Metaphors are a powerful literary device. In Dr. Martin Luther King Jr.’s “I Have a Dream” speech, about 20% of what he said was metaphorical. For example, he likened his lack of freedom to a bad check that “America has given the Negro people . . . a check which has come back marked ‘insufficient funds.’” King introduced this metaphor three minutes into his 16-minute talk, and it was the first time the audience roared and clapped. Presenters tend to overrely on tired visual metaphors instead of using powerful words to stir hearts. King’s speech would not have been nearly as beautiful if he’d used slides with pictures of bad checks and piles of gold symbolizing “freedom and the security of justice.” For each point you make in your presentation, try to come up with a metaphor to connect people’s minds to the concept. You might even weave it like a thread throughout the presentation. When developing metaphors, reject overused themes like racecars and sporting events—and avoid stock pho-

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tos along those lines. If you want to tell a story of triumph, dig into one of your own stories for the right metaphor: Describe, for instance, how it felt to struggle to the top of Yosemite’s Half Dome, run your first marathon, or win the citywide Boy Scout trophy. Identify metaphors that will be meaningful to the audience.

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Create Something They’ll Always Remember Place Something They’ll Always Remember—a climactic S.T.A.R. moment—in your presentation to drive your big idea home. That moment is what the audience will chat (or tweet) about after your talk. It can also help your message go viral through social media and news coverage. Use it to make people uncomfortable with what is or to draw them toward what could be. Here are four ways to create a S.T.A.R. moment that captivates your audience and generates buzz.

Shocking statistics If statistics are shocking, don’t glide over them—amplify them. For example, in his 2010 Consumer Electronics Show presentation, Intel CEO Paul Otellini used startling numbers to convey the speed and impact of the company’s newest technology. “Today we have the industry’s first-shipping 32-nanometer process technology. A

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32-nanometer microprocessor is 5,000 times faster; its transistors are 100,000 times cheaper than the 4004 processor that we began with. With all respect to our friends in the auto industry, if their products had produced the same kind of innovation, cars today would go 470,000 miles per hour. They’d get 100,000 miles per gallon, and they’d cost three cents.”

Evocative visuals Audiences connect with emotionally potent visuals. When asking donors to help raise $1.7 million, Conservation International contrasted dreamy, glistening, surreal under-ocean images (captioned with phrases like “90% of our oxygen” describing how dependent we are on the ocean) with photos of grimy rubbish that washes up on the beach (where “14 billion pounds of trash” roll in on the waves). That approach tapped the power of evocative visuals and shocking stats—and people responded by getting out their wallets.

Memorable dramatization Bring your message to life by dramatizing it. As Bill Gates spoke about the importance of malaria eradication at a TED conference in 2009, he released a jar of mosquitoes into the auditorium and said, “There is no reason only poor people should be infected.” It got the audience’s attention—and effectively made the point that we don’t spend nearly enough money on fighting the disease. The mosquitoes were malaria-free, but he let people squirm a minute or two before he let them know that. Consider another example. When Mirran Raphaely, CEO of Dr. Hauschka Skin Care, presented to the cos84

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Create Something They’ll Always Remember

metics industry, she wanted to draw a sharp contrast between industrial agriculture and biodynamic farming practices. She showed two photos side by side—a container of chemicals and an herb called horsetail—and compared the toxicity of the two substances. In industrial agriculture, farmers rely on glyphosate, a synthetic chemical linked to cancer in animals and humans. In biodynamic agriculture, farmers treat crops with an extract made from horsetail. Holding up two glasses—one filled with the chemical weed killer, the other with the horsetail extract—she asked the audience, “Which one of these would you want on the crops you consume?” After the audience finished laughing, she took a sip of the biodynamic solution.

Emotive anecdote Sometimes S.T.A.R. moments are gripping personal stories (see “Add Emotional Texture” earlier in this section). Here’s one such story, told by Symantec.cloud group president Rowan Trollope in May 2012, to encourage his organization to innovate: I went mountain climbing at Mount Laurel, in the eastern Sierras, with two of my friends. I’m not very experienced, but both of them were even less experienced. We’d been climbing for about 19 hours. We were up at 11,000 feet, and it was getting dark. Fast. We needed to get down the side of this mountain . . . and we needed to do it fast. Descending first, I got to a ledge and started to get our line ready. Climbers carry two emergency pitons with them for just this purpose. I’d never used them before, but I knew 85

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how they worked. I took out my hammer and started hammering one into the rock. The books tell you that you’ll hear the tone of the hammer strike change when it’s “in.” I heard a loud ping with each strike of the hammer and decided it was in “good enough.” The books also tell you, though, to always use two, so I used two. As I hammered in the second one, I heard a sharp, high-pitched ping at the end, so I tied the knots and got our line ready. By this time, my buddies had reached the ledge, and I started to hook us in. Something was bugging me. I looked at the knot between the two pitons and it looked like this [prop: climbing rope with two pitons]. The problem with a knot like that is that if one piton fails, you’ll fall. You need to tie it instead like this [prop: retie knot]. My buddies were all clipped in and wanted to get going. It was getting darker. The way I tied the knot seemed good enough, but something in the back of my head told me to stop. So I did. We all unclipped, and I retied the knot, and then we clipped in again and started the climb down. The moment I put weight on my line, the first piton popped out and hit me smack in the middle of the helmet. Had I not unclipped and retied the knot, I would have died on that ledge. My life rushed through my mind. And I suddenly and irrevocably got the danger of “good enough.” When I pounded in that first piton, I decided it was good enough. When I tied the knot that first time, I decided that it wasn’t, so I did it again.

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I still have that piton that popped out. I brought it with me today because I thought you might like to see it [prop: piton]. The other one? The one that saved my life? It’s still in a crack on the Laurel Cliffs. Still doing its job. I came back to work, and everything had new meaning for me. Retying my knots became a sort of metaphor. I realized that in every job I did, every project I touched, I was making piton decisions every time. I was deciding, with every one of those moves, whether good enough was good enough for me. I picked that story for today because I think we’re facing a similar climb as a company. And we’re making piton decisions every day. For my buddies and me, there was nothing but sky beneath us. When you and I look down, we see the PC business changing dramatically. We can see physical things being driven into the cloud, and we can agree that the Internet is not yet a secure place. Unfortunately, it will take more than one piton to address these dangers. But I think it starts by reawakening in our company some of the qualities that made us great in the first place. And to do that, I think we need to change how we approach our work.

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Section 4

Media

People who know what they’re talking about don’t need PowerPoint. —Steve Jobs

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Choose the Right Vehicle for Your Message Now that you’ve carefully considered your audience’s needs and tailored your message and content accordingly, it’s time to determine how the people you’re addressing prefer to process information so you can select the best vehicle for reaching them. Just because you have something to communicate and a time slot to fill doesn’t mean a formal presentation with slides is the right choice. Some audiences—a group of analysts, for example—may find a thoughtfully written memo more persuasive. Others, such as young professionals, might prefer a video. It’s your job to determine the best way to connect with your audience. Presentations aren’t limited to a single time or place anymore. They can be broadcasted, streamed, downloaded, and distributed. Slides aren’t a must-have, either. You can use props, handouts, sketches, tablets, videos, flipcharts—pretty much anything that will help people receive your message.

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Before opening your presentation software, think about your audience and venue. Will you be speaking to a few team members in an intimate setting? A big crowd in an auditorium? A small group who will be connecting remotely? The size of your audience and the level of interaction that your setting allows should determine which media you choose. See figure 4-1 for a sampling of ideas on how to deliver your message to one person or many, in a staged or more spontaneous setting. There’s also an element of common sense. Delivering a stand-up formal presentation in a small conference room just doesn’t make sense if you’re speaking to two of your direct reports—but it does if you’re speaking to a couple of venture capitalists who may invest in your business. Although technology has opened up new ways of communicating, a low-tech approach is sometimes your best bet. If you show up with a slick slide deck, everything seems final. But sketching out ideas while people watch and listen signals that your thinking is in the formative stages and that the audience can still weigh in. Maybe the “presentation” you’re developing should really be a carefully mapped-out conversation with a planned whiteboard drawing. When my firm was buying a new digital storage system, we met with two potential vendors: One brought a deck of slides and didn’t deviate from its spiel. The other, which won our business, whiteboarded out a full storage and network plan. That rep came across as having listened to our needs and understood what we wanted. Her presentation felt collaborative, not canned.

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Interactive

(1:1) Small audience (1:few)

Casual

• Host formal webinar (audience is muted)

• Lead conference call with document or slides posted (earnings call)

• Use flipchart or whiteboard spontaneously

• Post curated content (slides, videos, articles, white papers)

• Post slides with audio voice-over or recorded webinar

• Package or stream on-demand presentation

spontaneous

• Host conversational webinar (audience is unmuted)

• Distribute printed document or slides, then meet to discuss

Distributed for audience to access on own time

• Host panel discussion

• Lead conversation with planned whiteboard sketches

Facilitated by presenter or audience

• Deliver formal presentation with polished visuals

Programmed, staged, and formally rehearsed

staged

• Deliver short presentation, then discuss

Carefully planned but informally delivered

Choosing your delivery style

FIGURE 4-1

Canned

(1:many) Large audience (few:many)

Formal

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Make the Most of Slide Software Presentation software is widely reviled. The press has called PowerPoint evil, and corporations have cried for its banishment. The software isn’t at fault. It’s an empty shell, a container for our ideas. It’s not a bad communication tool unless it’s in the hands of a bad communicator. So how do you use it without abusing it—and your audience? Know exactly what you’re trying to accomplish and rely on the software to achieve that—and nothing more. You can use presentation software to create documents, compose teleprompter notes, and visualize ideas. But keep those tasks separate to avoid the most common PowerPoint pitfalls. The trick is to show audience members only what they want to see, when they want to see it.

Create documents Presentation software is great for laying out dense material in easy-to-read documents. In fact, that functionality is built right in—the default setting is a document template, not a slide template. You can swiftly compose and 95

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format your text and move sections around—and best of all, when it’s time to derive a presentation from that document, you don’t have to copy and paste from Word. That said, don’t project your entire document when you speak. No one wants to attend a plodding read-along. It’s boring, and people can read more efficiently on their own, anyway. Circulate your document before or after the presentation so you won’t need to project text-heavy slides—which Garr Reynolds, author of Presentation Zen, aptly calls slideuments. If your content can be distributed and clearly understood without a presenter, you’ve created a document, not a presentation—and that’s fine as long as you treat it as such. That might be all you need if you’re giving a status update, for instance. If you step back and realize you’ve created a slideument, it may be a sign that you need to distribute a document. Make some adjustments so it looks and feels more like a document before you circulate it. Try dividing the content into clear sections, creating a table of contents that links to each one, adding page numbers, converting fragments and phrases into complete sentences, and distributing the file as a PDF rather than a slide deck. Nolan Haims, the presentation director at the global PR firm Edelman, sets up slideuments in portrait layout instead of landscape so it’s very clear to staff members that they’re documents in the making, not visual aids to be projected.

Compose teleprompter notes What if you have to deliver several presentations per month, each customized for a different audience? (Think

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of sales pitches tailored to corporate clients, for example.) In situations like that, it’s impossible to memorize what you’ll say every time—and you shouldn’t have to. For decades, great orators have relied on note cards, notepaper, even full scripts. You can use bulleted slides as teleprompter material—but again, don’t project them. You’ll run into the same read-along problems (boredom and inefficiency) you encounter when you project slideuments. Sheryl Sandberg, the COO of Facebook, didn’t show any slides at her eloquent TEDWomen presentation “Why We Have Too Few Women Leaders.” But when the camera panned to her view of the audience, you could see her bulleted slides on the comfort monitor. Those slides were her teleprompter notes, and she was the only person in the room viewing them. If you’re using PowerPoint to compose teleprompter notes, write them in “Notes” view, and then go to “Set Up Show.” After you attach your projector, select “Presenter View.” Everything in your notes will appear on your laptop screen or comfort monitor, and only your slides will project behind you. Bring printouts of your teleprompter notes in case anything technical goes wrong.

Visualize ideas The only things you should actually project are images, graphics, and phrases that move your ideas along—and cement them in the audience’s memory long after your presentation is over. Strip everything off your slides that’s there to remind you what to say; keep only elements that will help the audience understand and retain what you’re

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saying. Developing clear visuals that add emotion, emphasis, or nuance to your delivery is no easy task—but when you do this well, your ideas will resonate with your audience. (See the Slides section in this guide for detailed tips on creating powerful visual aids.)

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Determine the Right Length for Your Presentation If you ask around, “What do great presentations have in common?” you’ll get one consistent answer: “They’re short.” It’s no secret that people value their time. But many presenters don’t realize that it costs them time to save the audience time. It’s easier to blather on for an hour than to craft a tight, succinct presentation. Some of the magic of TED is in the 18-minute limit. A great talk goes by quickly. A bad one—well, people can endure it if it’s only 18 minutes. People in your audience won’t scold you for ending early, but they will for ending late. Out of consideration for them and the day’s agenda, treat the time slot assigned to you as sacred. And keep in mind that people have a 30- to 40-minute presentation tolerance (they’re conditioned by TV shows with creatively produced commercial breaks). Go longer than that, and they’ll begin to squirm.

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Here are five ways to tighten your talk and keep your audience engaged:

1. Plan content for 60% of your time slot: If you’re given a full hour, take no more than 40 minutes. That will leave time for Q&A, a panel, or some other form of discussion. It’s hard to keep people’s attention for much longer than 40 minutes unless you’ve built in interesting guest speakers, video clips, interactive exercises, and such. As Thomas Jefferson put it, “Speeches that are measured by the hour will die with the hour.” 2. Trim your slide deck: If you created an hourlong presentation and want to deliver it in 40 minutes, cut your slides by a third. You can work in slide-sorter mode in PowerPoint, dragging slides to a “slide cemetery” at the very end of the file. Don’t delete them, because you might have to resurrect one or more at the last minute, when you’re answering questions. 3. Practice with the clock counting up: As you’re cutting material, rehearse with a clock counting up, not with a timer counting down. If you go over, you need to know how much you’re over. Give critical content the most stage time; cut sections that are more important to you than to the audience. Keep trimming and practicing until you’re consistently within your desired time frame. 100

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4. Practice with a timer counting down: Once you’re within the time frame, begin practicing with a timer counting down. Divide your content into quarters and calculate a time stamp for the end of each quarter. For example, if you’re giving a 40-minute talk, know the exact slide you should be on at the 10-, 20-, and 30-minute marks so you can gauge throughout the talk if you’re on time or running over. That way you can trim more easily on the fly. 5. Have two natural ending points: Create a false ending (a summary of the ideas covered, for example) and a real ending—perhaps a rousing, inspirational story that drives the message home. If you’re running long, you can drop the second ending and still get your message across. Once at a TED event in India, I was given a 15-minute time slot and had rehearsed it to a T. Two days before the talk, I caught a severe chest cold, so I was heavily medicated when I walked on stage. Before I knew it, the “time’s up” light was blinking, and I wasn’t done. Fortunately, I’d planned two natural places to end my talk, so I wrapped things up with my first ending, citing a beautiful salutation to the land of India from a famous Indian speech. As far as the people in the audience knew, that was the real ending—and they responded warmly.

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Persuade Beyond the Stage Your presentation doesn’t start the moment you enter the room; it starts the moment you’ve committed to speak— and it continues after the actual talk, as you follow up with the audience. If you take advantage of opportunities to reinforce your message at all three stages, you’re much more likely to change people’s thinking and behavior.

Before How you position the talk before you even deliver it will have a big impact on the audience’s level of interest. Consider the most effective forms of communication to send out in advance. If you’re presenting to colleagues, you might e-mail them a summary of your message and a rough list of points you plan to cover, for example, or send a meeting request with a detailed agenda. If you’re going to speak to people from outside your organization— conference attendees, for instance—you may post your biography and talking points online and provide links

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to prereading material (published articles, abstracts of white papers, and so on). Preparing strong supporting material may take as long as developing the presentation itself. However you choose to orient your audience members, make it clear how they will benefit from this talk.

During If you need to distribute handouts during your talk, bring more than enough copies and recruit volunteers to pass them out at the right time. You can also tape secret messages under people’s chairs for retrieval at a key moment during your talk, have audience members hold up color-coded cards to give you feedback in real time, or give them all a prop to interact with, such as a product prototype. And if you’re trying to create external buzz—about a launch, for example—post your slides online along with any videos or photos that support your presentation. Downloadable assets like these will make it easier for journalists, bloggers, and fans in social media circles to write about your talk. If appropriate, use webinar or streaming technology to further increase your audience reach.

After Follow up with a thank-you note, a survey, or supplementary reading or viewing material to keep your message fresh in people’s minds. But don’t overtly solicit your audience. People should feel they’re getting additional insights and value—not doing extra work that benefits

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you more than it does them. For example, if you send a survey to find out what they think about a new service you’re offering, make it worth their time: Explain how their feedback will lead to benefits they’ll care about, and offer a relevant, attractive free product in exchange for their participation. When I wrap up a webinar on presentations, I set up a URL where the audience can access free digital content from my books on the topic. Attendees love getting free, useful tools like this. More than a quarter of them download the files. By adding points of contact before, during, and after your presentation, you’ll make a lasting impression and increase the likelihood that your ideas will gain traction.

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Share the Stage Audiences find monologues boring. Thanks to advances in entertainment, they’ve become accustomed to quick action, rapid scene changes, intense visual stimulation, and soundtracks that make the heart race. They’re no longer willing to sit attentively for an hour while a single speaker drones on. The key to getting and holding their attention is having new things continually happen. You can do that by: • Bringing in other presenters: Invite others to join you on the stage or by video. Consider which experts or analysts in your organization or industry would add meat and credibility to your presentation. And look for ways your team members can play to their strengths. If your colleague Sam is quick on his feet, for example, have him lead the Q&A. • Mixing up your media: Try alternating between slides and other media. Hang posters and exhibits on the wall, place tchotchkes on the table that tie into the theme of your talk, or have a helper unveil

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a prop or new product while you speak. Add video to inject humor, boost credibility through testimonials, or clarify concepts with animated infographics. If you’re talking about a product, demo it—hold it, display it, allow people to interact with it. If you’re explaining a concept, try drawing on a flipchart or a whiteboard—it varies the pace and audiences often find it endearing because it makes all but the most artistic presenters vulnerable and thus accessible. Or you can hire a graphic recorder to capture your message visually on a large strip of butcher paper while you talk. She can synthesize what’s being said in real time, creating a mural that memorializes the talk. Display it somewhere prominent in your department as a reminder of the goals everyone agreed on at the last vision meeting. You can reengage your audience several times during your talk by alternating presenters and changing up your media. Of course, all those moving parts require planning and rehearsal—but they’ll also keep people tuned in.

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Section 5

Slides

At our studio we don’t write our stories, we draw them. —Walt Disney

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Think Like a Designer To make the point that design thinking goes “hand-inhand with financial success” in business, Fast Company cited an intriguing Design Council study in its October 2007 letter from the editor: “A portfolio of 63 designdriven British companies . . . trounced the FTSE 100 index over 13 years.” A chart like the one in figure 5-1 accompanied the letter. What does this have to do with presentations? A lot. Presentations are one of the most popular business communication tools, second only to e-mail. They attract clients and keep employees on track. And the most effective presenters think like designers. Good presenters display data clearly, simply, and compellingly, as in the chart in figure 5-1. They select visuals that convey meaning and brand value. They create and arrange slides that persuade audiences and help them solve problems. After reading the tips in the Slides section of this guide, you won’t be a master designer—but you’ll make better choices when confronted by the empty expanse of a virgin slide. 111

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FIGURE 5-1

Design contributes to the bottom line £5,000

Design portfolio £4,000

£3,000

Yield on investment of £1,000

£2,000

FTSE 100 £1,000

0

’95

’97

’99

’01

’03

’05

’07

Source: Fast Company, Design Council, and FTSE.

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Create Slides People Can “Get” in Three Seconds Audiences can process only one stream of information at a time. They’ll either listen to you speak or read your slides—they won’t do both simultaneously (not without missing key parts of your message, anyway). So make sure they can quickly comprehend your visuals and then turn their attention back to what you’re saying. Let’s say you’re using the default template in PowerPoint, and you completely fill in the field that says “Click to Add Text” each time you create a slide. That field holds about 80 words, and the average reading speed is 250 words per minute. So, if you develop 40 text-heavy slides for a 40-minute presentation, people will miss about 13 minutes (one-third!) of your talk just because they’re too busy reading your slides to listen. Another important reason to keep your slides simple: Research shows that people learn more effectively from multimedia messages when they’re stripped of extrane-

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ous words, graphics, animation, and sounds. The extras actually take away meaning because they become a distraction. They overtax the audience’s cognitive resources. Each slide should pass what I call the glance test: People should be able to comprehend it in three seconds. Think of your slides as billboards. When people drive, they only briefly take their eyes off their main focus—the road—to process billboard information. Similarly, your audience should focus intently on what you’re saying, looking only briefly at your slides when you display them. To create slides that pass the glance test: • Start with a clean surface: Instead of using the default “Click to Add Title” and “Click to Add Text” slide master, turn off all the master prompts and start with a blank slide. And when you add elements, make sure you have a good reason. Does the audience need to see your logo on each slide to remember who you work for? Does that blue swoosh add meaning? If not, leave it off. • Limit your text: Keep the text short and easy to skim. Scale the type as large as possible so the people in the back of the room can see it. • Coordinate visual elements: Select one typeface—two at most—for the entire slide deck. Use a consistent color palette throughout (limit yourself to three complementary colors, plus a couple of neutral shades, like gray or pale blue). Photos should be taken by the same photographer or look as if they are. Illustrations should be done in the same style. 114

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• Arrange elements with care: When you project your slides, they’ll be many times larger than they are on your laptop screen—so they need to be tidy. (Blown up, unkempt slides look downright chaotic.) Align your graphics and text blocks. Size objects appropriately. If one element is larger than another, the audience will interpret that to mean the larger object is more important. Take a look at the “before” slide (figure 5-2). It fails the glance test because it’s packed with text. But when you streamline the text and incorporate simple visual elements—as in figure 5-3—you help the audience process the information much more quickly. Presentation software gives us many shiny, seductive elements to work with. But there’s beauty and clarity in FIGURE 5-2

Before

Business Challenges • Difficulty of managing various devices and end points, each with different requirements and needs –

Managing client software, user access portal, etc.

• Complexity of maintaining and provisioning access based on individual needs/roles –

Contractors vs. full time

• High cost per user • Difficulty of ensuring security –

Remote device downloading data

• Scalability –

As the company grows

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FIGURE 5-3

After

Business Challenges Devices Access

$

Cost

Security

Scalability

restraint. Though you can develop your visual sensibility by studying well-designed publications, you may also want to ask a professional designer to customize a template for you so you’ll have a solid foundation to build from.

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Choose the Right Type of Slide If you’re feeling overwhelmed by endless possibilities as you’re creating slides, rest assured—all slides can be boiled down to the following types. Here’s how they work, and when you’ll use them.

Walk-in slide This slide is already up when people enter the room. It creates the first impression. You may want it to display your company’s branding, for example, or an image that sets the tone for your presentation.

Title slide Here’s where you show the title of your talk and (if you’re addressing an external crowd) your name, title, and company. Include a title slide even if you don’t state the title when you speak; it helps orient and focus the audience.

Navigation slide This type of slide helps the audience see where you are in the presentation. You can, for example, show section 117

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FIGURE 5-4

Navigation slide

Agenda • Section 1 • Section 2 • Section 3 • Section 4

titles as you move from point to point or periodically show an agenda slide that highlights where you are in your talk (see figure 5-4).

Bullet slide Use bullets to cluster related ideas into a list, but don’t display them all at once. If you do, your audience will get ahead of you—and get bored. Instead, control your pacing with a “build” (have each bullet appear as you cover it by animating each one). If the bullets on your slide don’t have to be associated together, give each point its own slide.

Big-word slide This type of slide shows a single word or short phrase in large type—the one message or idea you want to convey at that moment. Sometimes I use a single word to set up a visual surprise on the next slide. When I was speaking at a high-tech company’s annual sales meeting, for 118

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instance, I told a story about my first sales job: selling candy for the Camp Fire Girls as a kid. I had clipped a newspaper photo of my troop with a trophy for selling the most candy—but I wanted that part to be a surprise. So first, I slipped in a slide that said, “Victory is sweet.” This text not only explained an important reason why people sell but also teed up the photo showing our goofy fifth-grade smiles and our skinny arms holding up a trophy that was bigger than we were.

Quote slide Project quotes by experts or from important documents to add credibility or factual support to your message, but clearly show where the material came from. Use quotation marks and include a source line. Project only one quote at a time—more than one will muddy the focus. And try not to exceed 30 words. That allows you to fit in attribution without sacrificing readability. You can also borrow a technique that I’ve seen several TED presenters use effectively: Supplement the visual with a recording of the person you’re quoting or (if that’s not available) add voice-over so the audience feels as if it’s reading along with the author of the quote.

Data slide You may need to display data when explaining your research, for example, or reporting on your business unit’s performance, or making a controversial argument that requires proof. Be judicious, though, so you don’t overwhelm people with numbers they don’t really need to know. Visually emphasize what part of the data you want people to look at by rendering everything else in the chart 119

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in gray (see “Clarify the Data” later in this section of the guide).

Diagram slide Diagrams translate abstract, invisible concepts into something people can see. Use them to show connections between ideas or to illustrate processes. You may want to transform some of your bullet slides into diagrams to clarify the type of relationship your points and subpoints have with each other (see “Turn Words into Diagrams” later in this section).

Conceptual image slide Sometimes showing is more powerful than telling. Project photos or illustrations to convey concepts or even FIGURE 5-5

Conceptual image slide

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combine them. Slaveryfootprint.org used the familiar image of a clothing tag with provocative wording to open consumers’ eyes to the realities of slave labor in supply chains (figure 5-5).

Video slide A video slide provides a nice break from a series of static slides. Use videos of talking heads to endorse your concept, for example, or animated infographics to explain it. Many images from stock photography houses also come in video versions.

Walk-out slide Leave people with something useful as they exit the room. You may want to re-project a rousing call to action, show your contact information, or display a nicely branded slide and play music that reinforces the mood you’ve created.

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Storyboard One Idea per Slide Filmmakers sketch out their shots before production begins to make sure they’ll hang together structurally, conceptually, and visually. Good presenters use a similar planning process before they sweat over their slides. Sure, you’re not Steven Spielberg, but don’t be intimidated. Basic storyboarding isn’t hard, and it saves you more time than it takes. When you’re storyboarding a presentation: • Keep it simple: Draw small visual representations of your ideas on 1.5″ × 2″ sticky notes (see figure 5-6). Constraining your ideas to a small sketch space forces you to use simple, clear words and pictures as proof of concept before creating slides in presentation software. Don’t be embarrassed by rudimentary sketches. This is an ideation phase; doodles work fine as long as you understand them (and if you don’t, the concept is probably too complex anyway).

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FIGURE 5-6

Use stickies to keep it simple

• Limit yourself to one idea per slide: There’s no reason to crowd several ideas onto one slide. Slides are free. Make as many as you need to give each idea its own moment onstage (as in figure 5-7). The sketching process helps you clarify what you want to say and how you want to say it. As Dan Roam, author of The Back of the Napkin, points out, “All the real problems of today are multidimensional. . . . There is no way to fully understand them—thus no way to effectively begin solving them—without at some point literally drawing them out.” 124

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Storyboard One Idea per Slide

FIGURE 5-7

One idea per slide Original slide with multiple points...

“ “

” Delete

”

...becomes three separate slides

As you storyboard, you’ll be able to tell immediately which concepts are clunky or overly complex (you’ll run out of space on your sticky notes). Eliminate them, and brainstorm new ways to communicate those messages. Chances are good you can develop at least a couple of your storyboarding doodles into graphics or diagrams you’ll actually use in the presentation. If they’ll help the audience understand or remember your verbal message, they’re worth including. But even if you don’t display any images when you present, nice big type on the screen is better than dense prose.

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Avoid Visual Clichés When your CFO announces at an all-staff meeting that the company’s financials are “right on target,” does he treat you and your colleagues to the all-too-familiar image of a bull’s-eye? Nothing gets eyes a-glazing like a visual cliché. If you want your presentation to stand out (in a good way) from the others your audience has seen, throw out the first visual concepts that come to mind. They’re the ones that occur to everyone else, too. Brainstorm several ideas for

TABLE 5-1

Find new visual metaphors Concept

Cliché

Unique

Goal

Bull’s-eye

Maze; threshold

Partnership

Handshake in front of globe

Reef ecosystem; Fred Astaire and Ginger Rogers

Security

Lock and key

Doberman pinscher; pepper spray

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each concept you want to illustrate—and you’ll work your way toward fresh, surprising images. Table 5–1 gives some examples of visual clichés and more-creative ways to illustrate the same concepts.

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Arrange Slide Elements with Care By carefully arranging your slide elements, you can help your audience process the information more easily—and that, as we’ve discussed, frees up people to hear what you’re saying. Follow these five design principles when arranging elements to simplify your slides.

Flow Placement governs flow—that is, how the eye travels across a space. You can direct people’s eyes to certain areas of a slide and help your audience get to the important points quickly. People should be able to move their eyes across your slide in one back-and-forth motion and be done processing the information. In figure 5-8, your eye takes in the cluster of grapes, then moves to the text, then focuses on one individual grape.

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FIGURE 5-8

Flow—Part 1

The next example (figure 5-9) shows one of a series of five points made. Your eye moves from left to right: You see the number 5 and the title, then your eye follows the path to the ridgeline.

Contrast Our eyes are drawn to things that stand out, so designers use contrast to focus attention. Create contrast through your elements’ size, shape, color, and proximity. Look at figure 5-10, where the presenter compared cross-sections of skin and soil to show that tending to both requires an understanding of the microbiological activity beneath the surface. Notice how the blurred

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FIGURE 5-9

Flow—Part 2

FIGURE 5-10

Contrast

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background images set off the stark white illustrations in high relief so they can be processed quickly.

White space White space is the open space surrounding items of interest. Presenters are often tempted to fill it up with additional content that competes for attention. But including a healthy amount of white space imparts a feeling of luxury (advertisers have discovered that it creates higher perceived value) and sharpens viewers’ focus by isolating elements. That doesn’t necessarily mean that everything is literally “white”—just that the design feels spacious. See the example in figure 5-11:

FIGURE 5-11

White space

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If we’d paired the quote with a larger or more detailed image, your eye wouldn’t know where to begin. Buried, the quote’s message would have lost its power.

Hierarchy A clear visual hierarchy allows viewers to quickly ascertain a slide’s most important elements. The sample slide in figure 5-12, citing a statistic from a recent McKinsey study, has a top-down hierarchy: You process the picture, and then the large percentage, and then the supporting copy.

Unity Slides with visual unity look as though the same person created them and make your message feel cohesive. You

FIGURE 5-12

Hierarchy

of senior execs are disappointed with their enterprise’s ability to stimulate innovation

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FIGURE 5-13

Unity—Part 1

FIGURE 5-14

Unity—Part 2

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can achieve this through consistent type styles, color, image treatment, and element placement throughout the slide deck. The slides in figures 5-13 and 5-14 feel united for a couple of reasons: Both of their backgrounds are dark around the edges and lighter in the middle. Also, all the type and the images are black.

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Clarify the Data When displaying data in a presentation, pursue clarity above all else. The people in your audience can’t spend extra time with your projected charts or pull them closer to examine them, as they do with charts in print. They have to get meaning from your numbers at a distance, before you click away. People will interpret your data slides first by reading the titles, then by looking at the shapes the data make, and then by reading the axes. It’s a multistep process, complex to begin with. So if the information you’re displaying is visually complex, the audience won’t have time to comprehend it. These rules of thumb will help you clarify—and simplify—your data.

Highlight what’s important Start by asking, “What would I like people to remember about the data?”—and give that point visual emphasis. If you’re projecting a chart about sales trends over five years but talking specifically about how sales are consistently low in the first quarter, show the first-quarter bar of each year in a rich color and other bars in a neutral 137

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color, like gray. Deemphasize grid lines, borders, axes, and labels—you’ll provide that kind of context when you speak, so your visuals don’t have to—and use contrast (color, size, or position) to draw the viewer’s eye to where the meaning is. Notice in figure 5-15 (top) how the grid lines and borders all have the same weight as the data, so the eye doesn’t know where to go first. But the bottom image— borderless, with muted axes and gridlines—takes viewers right to the point: They see immediately that revenue leveled off after a spike early in the year.

Tell the truth This may seem obvious, but many presenters play fast and loose with their charts. If you don’t have a z-axis in

FIGURE 5-15

Highlight what’s important Revenue (%) 100 80 60 40 20 0 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr

Revenue (%) 100 80 60 40 20 0 1st Qtr 2nd Qtr 3rd Qtr

4th Qtr

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your data, omit 3-D effects—the depth can make your numbers look larger than they are. In a 3-D pie chart, for example, the pie piece in the foreground appears deceptively larger than the rest. Also, don’t alter the proportions of your axes. Doing so can make a change in the numbers look more significant (figure 5-16a) or less so (figure 5-16b). Square grid lines (figure 5-16c) will keep your data true.

Pick the right chart for the job The most common charts in business are pies, bars, matrixes, and line graphs. They serve different purposes, though. Use a line graph instead of a bar chart if the shape of the line will draw attention to your most impor-

FIGURE 5-16

Tell the truth a. Exaggerated vertical scale

b. Exaggerated horizontal scale

c. Accurate scale

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tant point. Use a matrix instead of multiple pie charts if you want to show relationships between the data points. For example, the slide in figure 5-17 uses pie charts to show how airline ticket sales break down between three different sales channels: online, agents, and direct sales. But there’s not much you can deduce from these charts, because they’re visually similar. Lay out the data in a matrix, however, and suddenly it’s clear that total sales for Airline 3 are almost double the others (figure 5-18). Sometimes the best chart is no chart at all. If a number conveys your key message most clearly on its own, show just that number—huge—on the slide.

FIGURE 5-17

The wrong chart for the job

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FIGURE 5-18

The right chart for the job

Find the narrative in the data Explain not just the “what,” but the “why” and the “how” of your data. Maybe the numbers went up, but what made them go up? What impact did people have on them? How will people be affected by them?

Use concrete comparisons to express magnitude The bigger a number is, the tougher it is to grasp. Millions, billions, and trillions sound a lot alike, but they’re nowhere near each other in magnitude. Help your audience understand scale by communicating large numbers 141

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in concrete terms. For example, if you’re trying to get an audience to visualize a billion square feet, hold up a carpet square that’s 12″ × 12″ and tell them it would take a billion of those squares to cover Manhattan.

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Turn Words into Diagrams Diagrams are great tools for illustrating relationships. They clarify concepts so an audience can see at a glance how parts of a whole work together. For example, if your organization is merging with two others, you can use a diagram of three overlapping circles to signify redundancies between departments. Or if you want to encourage your team members to innovate iteratively, try using a flow diagram that loops back on itself in several places to illustrate the process of working out kinks in a prototype. When you’re creating your presentation visuals, try turning some of your words into diagrams that reinforce your speech. It’s easy to translate words into diagrams when you have a visual taxonomy at your disposal—and I’m providing one here. Because my firm has visualized concepts for companies and brands for more than 20 years, my designers’ notebooks are filled with great business diagrams. Looking for patterns, I clipped thousands of sketches from those notebooks and sorted them into the following commonly used (and universally understood) types of diagrams. 143

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FIGURE 5-19

Types of diagrams A Network HUB AND SPOKES

SPOKES

FLARE

RING

B Segment DONUT

PIE

C Join HOOK

OVERLAP

D Flow LOOP

PARALLEL

LINEAR

MERGE AND DIVIDE

E Stack VERTICAL

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HORIZONTAL

CONCENTRIC

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Turn Words into Diagrams

The diagrams in figure 5-19 illustrate these kinds of relationships: • Network Example: A hub-and-spokes diagram can illustrate the stakeholders from various departments who come together to make an initiative successful. • Segment Example: A donut can show how separate products fit into a suite of offerings. • Join Example: A hook diagram can depict a relationship between supply chain partners. • Flow Example: Parallel arrows can show two teams working in concert toward a goal. • Stack Example: Vertical layers can illustrate discrete fiscal-year goals as building blocks that will lead to profitability. So, how can you use these diagrams in your presentation? Look through your slides and find a list of bullets. Those bullets should “feel” related—that’s why you grouped them together in the first place. Circle the verbs or nouns on the slide and consider how they’re related.

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That relationship will most likely fall into one of the categories in figure 5-19. Now see if you can use one of the diagrams in that category to replace your bullet slide. Repeat the process with other text slides. Consider two sets of slides (figures 5-20a and 5-20b; figures 5-21a and 5-21b) showing how a list of bullet points (“Before”) can be turned into a diagram (“After”). The taxonomy in figure 5-19 isn’t exhaustive, and there’s room for creativity within each category. You can use different shapes and styles for the nodes and connectors, and so on (go to diagrammer.com for thousands of choices). But it covers most of the bases, so it takes some of the pressure off as you’re working to meet your deadline.

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FIGURE 5-20a

Before We follow the same basic process every time • We start with the invention. We take early stage ideas and turn them into demos—not technical demos but conceptual ones, like the rough version of Flare you saw. • Then our team takes this seed of an idea to customers, in conferences and forums, to get feedback that helps us shape it into something even more useful. • We improve it and build a prototype that we give to a set of early adopters, who use it and give us more feedback. • Eventually, after a few quick cycles of this process, we standardize the product features. Only then isafter it ready toquick go outcycles to ouroflarger group of we customers, • Eventually, a few this process, like the finished version of Flare you saw. standardize the product features.

FIGURE 5-20b

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Feedba

De

Improve

ck

Proto

e typ

Invention

ck

mo

Feedb a

After

Standardize

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FIGURE 5-21a

Before

Research Programs Concentrate on four research programs • • • •

Domestic Energy Development Environmental Technologies Carbon Management Energy Efficiency

The potential impact of all of our programs will extend beyond policy makers to corporations and citizens around the world.

FIGURE 5-21b

After

Concentrate on Four Programs

Research Domestic Energy

Energy Efficiency Environmental Technologies

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Use the Right Number of Slides How many slides should you have? That depends on your audience, the technology you’re using, the setting you’re in, your own sense of pacing, and how comfortable you are with a clicker. Some presenters could spend an hour on three slides; others could go through 200 or more and you’d never know it. Consider these slide-count variables as you’re creating your presentation.

No slides If you need to make a very personal connection with your audience or you’re delivering a short talk in a casual environment, go without slides. They don’t work in every situation. As Andrew Dlugan says in his “Six Minutes” blog about public speaking, presenters shouldn’t use slides in a commencement speech, a eulogy, a wedding toast, or a layoff announcement. If you’re unsure whether they’re appropriate, bring them with you but also carry a printout of your slide notes in case you decide when you arrive that it’s best to leave your laptop off. 149

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Moderate slide count Some experts recommend 1 to 2 slides per minute, or 30 to 60 slides for an hour-long talk. That’s about the average count in corporate presentations—but most of them cram too much information on each slide. If you’ve broken your content down to one idea per slide (see “Storyboard One Idea per Slide” earlier in the Slides section), you may end up with more than 60.

High slide count Some presenters use 5 slides per minute. This rapid-fire style keeps the audience extra alert because people will visually reengage with each click—but it requires a lot of rehearsal and careful pacing. In a 40-minute talk, I typically use 145 slides. (If you count “builds” within each slide—where I reveal bullets one at a time, and so forth— I click up to 300 times.) But when I ask audiences how many slides they think I used, they usually say between 30 and 50.

Social media slide count The most popular presentations on social media sites like slideshare.com have more than 75 slides that you can read in 2 to 3 minutes. They also tend to be built like children’s books—sentence, visual, sentence, visual—to facilitate quick clicking. Don’t worry about slide count. Just make your slides count.

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Know When to Animate When things move, eyes are drawn to them. So animation is a powerful communication tool—but only when applied judiciously and in a way that enhances your message. It’s tempting to include every feature and flashy effect that’s available—but that would be like adding rhinestones to every outfit in your closet. You’d be blinded by all the bling when you opened the door, and you wouldn’t know what to pick. Effective animation: • Shows how things work: Use animation and motion to control eye movement as you reveal how things are put together, explain changes, show direction, or illustrate sequence. If, for example, you’ve got a stack of boxes showing how parts of your software application fit together, you can provide information on one part at a time, without crowding the visual: When you click on a box,

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have a “drawer” slide out from behind it to reveal details. • Creates contrast: Show many slides with no animation so that when you do use it, it stands out. • Looks natural: Just like actors on a stage, elements can enter your slide, interact, and then leave the scene. But the movement should seem natural and controlled, not busy and frenetic. • Does not annoy: Most content isn’t any clearer if you make it spin, twitch, or twirl. Gratuitous features like these just get on people’s nerves, so don’t waste time on them.

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Section 6

Delivery Golden Rule: Never deliver a presentation you wouldn’t want to sit through. —Motto at Duarte, Inc.

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Rehearse Your Material Well There’s no such thing as overrehearsing your delivery. Not that you should memorize your talk—if you do, you’ll come across as stiff and struggle to connect with the audience. But know your material inside and out. That way, you can adapt more easily if the environment, audience, or technology suddenly changes on you (something often does). Also, audiences can tell if you try to wing it—and they feel slighted. It sends the message that you don’t value them or their time. Perhaps most important, rehearsing frees you up to be more present in your talk and fully engage with the people in front of you. When you rehearse, leave plenty of time to: • Get honest feedback from a skilled presenter: As the presenter, you’re so familiar with (and probably attached to) your ideas that you may think you’re making each point more clearly and persuasively than you are. So ask a skilled presenter to give you honest feedback. Give her a printout

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of your slides and have her jot down what you say well, what you don’t, what’s essential to keep, and what’s distracting. She might say things like: “When you put it that way, people won’t follow you,” and “That term sounds derogatory to me,” and “I thought you expressed it better last time, when you said . . .” The extra set of eyes and ears helps you see and hear yourself as the audience will. • Prepare a short version: Many variables in a presentation can go wrong, leaving you with less time than you expected. The technology doesn’t always work. Other speakers might cut into your time slot by running long. An impatient executive may interrupt you with lots of questions. Prepare a presentation that fits your scheduled time, but also craft and rehearse a version that’s much shorter, just in case. • Fiddle with your slides: Continue to tweak your slides until the day you present. Refining a bit of text here and adding an image there is a form of rehearsal. You become more deeply familiar with the content as you engage with your slides—so when you present, they feel seamlessly integrated with your message, not tacked-on or disruptive. • Rehearse a few times in slide-show mode: Because slide-show mode doesn’t allow you to peek at the notes view, it forces you into an even greater familiarity with the material and allows you to focus

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on pacing and visualize the flow. Look for choppy transitions from slide to slide, inconsistent graphics, and awkward builds as you reveal new bullets, so you can smooth things out. • Practice on camera: Record some of your final rehearsals on video. You don’t need a professional setup. Use a webcam or the camera on your cell phone or tablet. Pretend you are in front of an audience, and address the camera as if it’s a person. When you’re done, review the video to assess not just your content but also your stage presence, eye contact, facial expressions, gestures, and ease of movement. Identify where you don’t appear natural, relaxed, or in command of your material—and work on those areas.

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Know the Venue and Schedule Scoping out the room in advance will help you navigate it. If you can’t check it out in person, look for details online or ask the host to describe it. Sometimes, if you get this information early enough, you can change the setup to meet your preferences. If you’re leading an offsite meeting for a team of six, for example, and you’ve been assigned a large conference space, see if you can get a cozier room—or at least a smaller table to encourage discussion. Don’t make any assumptions about the space. When I was invited to speak to 70 people at Google, in my head I pictured rows of chairs. But when I got there, I was taken to a tiny conference room with 20 people crammed in—and 50 small faces of webcam participants projected on the wall. If I’d known what the room would be like, I would have prepared to facilitate a conversation instead of delivering a formal presentation. Instead, I found myself making lots of last-minute mental adjustments, like

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figuring out where to stand and where to focus my eye contact, and that threw me off my stride. Avoid such surprises by getting information about: • Floor and seating plan: How is the room arranged? Does it have classroom seating? Round tables? Is the size of the room appropriate for the number of attendees you expect? It’s better for people to sit close together, feeding off one another’s energy, than to feel lost and disconnected in a cavernous space. Will you be elevated on a stage? Will the audience be able to see you if you stand on the same level as everyone else to make your talk feel less like a lecture? Do you have room to walk around and connect with people? If you’ll be on stage, where will the lights hit the floor? Mark any pockets of darkness with tape so you can avoid them (important for talks recorded on video). Does the room have any poles that will obstruct the audience’s view? Do what you can to work around them. Is there a podium? Remove it—it’s a visual barrier that puts distance between you and the audience—unless you need a place to put your notes. • Food plan: Are you presenting near a mealtime? Find out whether food will be provided. If not, build in time for people—including yourself—to grab a bite. Or if you’re presenting within your organization, bring some snacks. A hungry audience won’t focus on your message. Will you be speak-

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ing during a sit-down meal? You’ll need adequate amplification so people can hear you above the sounds of forks and knives. Or see if you can wait until the food service crew clears the dishes before you speak. • Show flow: What will the order of events be? Check with the organizer. Will you be introduced, or do you need to prepare your own introduction? Who will speak before you and after you? What messages will others present? It’s nice to reference things others are saying. If you’re toward the end of a long list of speakers, keep your message short and simple—the audience will already be tired and overloaded with information. And if you’re following a presenter with a contrary view, you can prepare to address any seeds of resistance he might plant in the audience. Speaking at a conference? Look at sessions in the same time slot as yours to find out if you’ll be competing with a popular workshop, for example, or a famous author doing a book signing. That’ll help you gauge whether the room will fill up. • Recording: Will your talk be recorded? If so, locate the cameras and look at them often to connect with remote viewers or listeners. Do you want to restrict distribution of your recorded presentation? Make that clear to the organizers. Once, when I spoke to a group of 250 professional women about overcoming obstacles, I knew I was being

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recorded but thought only attendees could access the recording, via a password-protected website. A local TV channel ended up broadcasting my entire presentation. My talk was very raw. I wouldn’t have gotten so personal if I’d known it would go beyond the room.

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Anticipate Technology Glitches Equipment often malfunctions—even for people who aren’t as technologically challenged as I am. So arrange a tech walkthrough or, if that’s not possible, give yourself at least 30 minutes to set up. Here’s a checklist I’ve developed after years of trial by fire to avoid last-minute frenzy from tech glitches: • Get to know the AV person: Learn his name and treat him well. He’ll work extra hard and extra fast for you if he likes you. • Test all the equipment: Do a dry run using the projector, the clicker, and any audio equipment beforehand. Make sure it all works. • Bring backups: If a piece of technology is critical to the success of your talk, request that it be provided—but also bring your own. That goes

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for the projector, the cables needed to connect it, the clicker, and any audio equipment you’ll need. I travel with my own speakers because at-venue audio often doesn’t work. Venture capitalist and former Apple marketer Guy Kawasaki even brings his own in-ear microphone when he presents. Also, back up the content of your presentation on drives and in the cloud—and make printouts of your slides and notes. • Prerecord your demos: If you’re planning to demonstrate software, an app, or a website, have a recorded version of your demo on your machine in case the Internet connection is slow or down at the time of your talk. • Test your slide deck: Click through every single slide. This is your last time to see what the slides look like projected in the room. You want to confirm that you’ve grabbed the right version, that everything is legible from the back of the room, and that each time you click, the slides advance to the right content. Sometimes the distance between the clicker and the computer backstage is too far for the signal to reach, and the AV team has to make adjustments. • Try out the comfort monitors: Confirm that your comfort monitors (teleprompters) work and you can read from them. At a technical walkthrough the day before a presentation, I discovered that my comfort monitors were so small I couldn’t read

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anything from the stage. I wanted to use monitors rather than rely solely on printouts because I’d be quoting lengthy excerpts from famous speeches. So that night, I doubled the font size and saved myself a lot of embarrassment. • Play all media: When transferring files to a venue’s machines, it’s easy to forget to grab video and audio files. Double-check that you have all your media in one folder and that the file types will play on the machines you’ll be using. • Confirm type of projection: Check the screen’s aspect ratio (usually 16:9 or 4:3), and make sure your slides are the right dimensions. Also consider whether they’ll be front- or rear-projected— and mark the floor with tape so you won’t walk through the light beam and have slides projected across your face when you’re speaking. • Find out if people will attend remotely: The odds of technical mishaps go way up in remote presentations—especially ones that involve lastminute equipment changes. Once I tested all my videos before walking onstage, only to discover moments before I began speaking that the AV crew switched machines to accommodate a large remote group. The crew forgot to copy over my video files—so I did my best to describe what people would have seen if we had those files.

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Manage Your Stage Fright Before you present, does your heart speed up? Do you sweat? Does your mouth go dry and your breathing become erratic? That’s your fight-or-flight instinct kicking in. Your body is telling you to flee because your brain perceives the audience as a possible threat: People might judge, challenge, or resist you. You may also fear the fact that presentation delivery can’t be undone. It’s live, and it’s final. A little bit of fear can be a good thing. I actually do a better job of presenting when I’m mildly nervous—it’s like a shot of adrenaline. But don’t let it overwhelm you. Here are a few ways to manage your stage fright before you present: • Quiet your mind: Stop the self-critical internal chatter and think instead about something that calms you. Take a short walk outside. Listen to soothing music.

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• Breathe: Sit on a chair or the floor, breathe deeply, and hold it in. Then take in one more gasp of air to fill your lungs even more—and let it all out very slowly. By doing this four times in a row, I can calm my body down in less than a minute. • Laugh: Read your favorite humor website or watch a funny video. Laughing doesn’t just distract you from your fear—it releases tension. • Visualize: Communication coach Nick Morgan, the author of Trust Me, suggests my favorite fearbusting technique: “Role-play in your mind a communication between you and your favorite person. . . . Form a memory of what that feels like physically, not about what you say. Notice everything you can about your behavior. . . .What are you doing with your hands? . . . How close are you? . . . Catalogue and remember the behavior, and then use that behavior.” • Remember your audience’s flaws: You’ve spent time thinking about how the people in your audience might resist your message—and rightly so. They do have that power. But, having studied them, you should also have insights into what makes them human and frail. Remembering that they’re just as flawed as you are will help calm your nerves.

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Set the Right Tone for Your Talk Your audience will size you up before you utter a word— so it’s critical to make a positive, message-appropriate first impression. What’s the first thing you want people to think or experience? What mood do you want to create? Set the right tone for your talk by attending to the following details.

Precommunication When you invite others to your presentation, send a thoughtfully written agenda with a concise but telling subject line—and be explicit about what the audience will get out of it. All communication leading up to your talk will affect your credibility and impact—so put as much thought and care into it as into the presentation itself. (See “Persuade Beyond the Stage” in the Media section.)

Atmosphere Special touches in the room let people know what to expect and prime them for the type of experience you

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want them to have. If you’re giving a calculated, chilling speech, a cold, sparsely appointed room works. Use bright lighting for a casual talk; go a bit darker for a formal one. Provide refreshments (even for small, familiar groups) to make people feel welcome. Music, props, and projected images can also help set the tone.

Appearance As much as you want the audience to like you for your mind, people will make quick judgments based on your appearance. Suit up to address potential clients, for example, or investors. Dress more casually when introducing yourself to a new group of direct reports, to signal that you’re accessible. In Enchantment: The Art of Changing Hearts, Minds, and Actions, Guy Kawasaki suggests matching your audience (or dressing for a “tie”). If you underdress, you’re saying, “I don’t respect you”; and if you overdress, you’re saying, “I’m better than you.”

Disposition The moment people see you, your disposition should prepare them for your message. For your content to ring true, do you need to come across as passionate? Humbled by the challenges ahead? If you’re announcing a layoff, be somber, not smiley. If your talk is upbeat, chat with individuals as the group gathers; shake hands if you’re meeting for the first time. No matter what tone you’re trying to establish, be available and sincere.

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Be Yourself Transparency wins people over. Though you’ll want to come across as smart and articulate, it’s even more important to be open and sincere so people will trust you and your ideas. It’s OK if you’re nervous. Audiences are gracious. As business communication expert Victoria Labalme points out, they’ll “forgive a stumble, an ‘um,’ or a section where you backtrack as long as they know that your heart is in the right place.” She adds: “Your audience wants you to be real. So avoid sounding like a corporate spokesperson—but don’t portray false humility, either. Playing small and meek when inside you know (and the audience knows) you’re a giant will not win you any fans. Authenticity means claiming who you are.” If you love what you do, for instance, let your enthusiasm show. Microsoft CEO Steve Ballmer explodes with so much passion when he presents that his sweaty, breathless dancing became a YouTube phenomenon (figure 6-1).

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Steve Ballmer’s famous “monkey boy” dance

FIGURE 6-1

Be Yourself

In a January 2012 article about Ballmer, BusinessWeek mused, “He plays the cheerleader in public appearances in an apparent effort to prove that no one can top his love of Microsoft—and he succeeds cringingly well.” It’s over-the-top, but it’s all him. No one questions his authenticity, and the man can rally his troops. And then there’s Susan Cain, who took the opposite tack when she gave one of the most buzzed-about talks at TED 2012. Cain spoke quietly and convincingly about being an introvert in a world that rewards extroverts. Her style suited her—and her subject matter—perfectly. She seemed comfortable onstage, but she certainly wasn’t dramatic or even passionate. That wouldn’t have been natural, given her personality and her topic. Instead, she delivered her message in a way that would resonate with fellow introverts: “The world needs you, and it needs the things you carry. So I wish you the best of all possible journeys and the courage to speak softly.”

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Communicate with Your Body People will read your body language to decide if they can trust you and your expertise. Constricted and contrived gestures will make you seem insecure. Larger movement conveys confidence and openness. Use your physical expression to its fullest with the following techniques: • Project emotion with your face: Connect with the audience by using your face to convey your feelings. Smile, laugh, open your mouth in disbelief. Before you begin your talk, try moving every facial muscle you can—it’ll help you warm up. • Peel yourself away from your slides: If you turn your back to the audience to look at your slides, you put up a barrier. As much as you can, keep your eyes on the people who have come to hear you. • Open up your posture: Avoid a “closed” stance, such as folding your arms, standing with legs 175

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crossed, putting your hands in your pockets, or clasping your hands behind or in front of you. It signals discomfort. • Exaggerate your movements: Fill the space around you, especially if you’re speaking in a large room. Use the same types of gestures you would if you were having a personal conversation—but make them bigger and more deliberate. Before your presentation, stretch your arms as wide as you can and as tall as you can (even stand on your toes). This helps you open up your chest cavity and practice exaggerating your gestures. • Match gestures with content: Gestures should complement or amplify what you’re saying. If you’re presenting a record year in sales, go “big” with your arms and your smile. If your team barely missed its targets, bring everything in, perhaps showing a tiny little gap between your thumb and forefinger. Brain scientist Jill Bolte Taylor coordinated her gestures and content beautifully when she described in her 2008 TED talk what it was like to have a massive stroke. She threw her arms upward to convey the unexpected rush of euphoria she’d felt as the left side of her brain shut down (figure 6-2a); she brought them back down when she described how she’d surrendered her spirit, ready to transition out of this world (figure 6-2b). When you tape yourself in rehearsal, you may identify gestures, movements, or facial expressions that look

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FIGURE 6-2a

Jill Bolte Taylor, arms up

FIGURE 6-2b

Jill Bolte Taylor, arms down

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lackluster or unnatural. Re-create those gestures so you can physically feel them, and then practice new ones that would be appropriate replacements. As with golf, focus on how it feels as you do it so you can create “muscle memory” of what works.

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Communicate with Your Voice Your voice is multitalented. It can sound: • Assertive: Firm, unyielding, significant, focused • Cautious: Measured, enunciated, understated • Critical: Harsh, angry, upset, pointed, caustic • Humorous: Comedic, light, novel, irreverent • Motivational: Uplifting, encouraging, friendly • Sympathetic: Emotional, moving, personal, delicate • Neutral: Casual, technical, dispassionate, informative And it does all this through pitch, tone, volume, pacing, and enunciation. Many business presenters have a dispassionate vocal style, assuming that it makes them sound objective or authoritative. But a flat delivery will bore your audience.

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Instead, create contrast—and emphasis—through vocal variation. You can do this on your own or by tag-teaming with someone else. When my husband and I copresent our company’s vision each year, our contrasting styles come through: He’s soft-spoken and charmingly funny, whereas I’m dramatic and passionate. That mix works well for our content. He gets everyone to reflect on the firm’s success, and I talk about the future with bold enthusiasm. To ensure that your content comes through clearly, identify and remove verbal tics. Because silence makes most speakers uncomfortable, they tend to use words such as “um,” “uh,” “you know,” “like,” and “anyway” to fill up space between points. They’d almost always be better served by a pause, which gives the audience a chance to reflect. I didn’t think I had any verbal tics until I watched myself on video. After each key point, I said, “Right?” with an annoying lilt in my tone. It didn’t take me long to remove that from my repertoire. I watched the video several times to cement it in my mind. At my very next speaking gig, I said it. Once. This word I didn’t even know I used suddenly sounded like fingernails on a chalkboard. I caught myself two more times about to say it—and stopped. Becoming self-aware and really hearing how bad it sounded helped me correct myself in the moment.

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Make Your Stories Come to Life The beauty of an honest story—whether comedic or dramatic—is that it touches people. (See the Story section for details on how to apply storytelling principles when crafting and structuring your content.) But even the most compelling stories lose their power if they’re not told well. How do you make yours come to life? Try the following two tips from business communication expert Victoria Labalme.

Reexperience your stories Broadway actors relive stories each time they perform. It’s how they keep their material fresh and engage audiences show after show. You can do the same. If you’re talking about the time you got lost in a strange city at night to make a point about finding your way when there’s no one around to guide you, re-create that scene. Don’t be melodramatic or ridiculous. But narrate the story as if you’re still in the moment, and you’ll increase its impact

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on your audience. Use evocative, descriptive words. Enhance them with your stance and gestures. One CEO reenacts the moment when his CFO came into his office and recommended that they not invest in subprime mortgages. The story is riveting partly because audiences know, in hindsight, how high the stakes were—but also because the CEO brings people into the scene. He describes the wood-paneled room, the view out the window on a clear day, and the moment of his razor’sedge decision—a decision that ultimately saved the company hundreds of millions of dollars. He then acknowledges his CFO for his sage advice at this critical juncture. Rarely does someone approach a speaker weeks after a presentation to say, “I loved your third point on leadership.” What people do say, however, is “I still think of the story you told . . .”

Use sensory details to set the scene The more you can invoke the senses when telling a story, the better. Paint a visual picture, or the audience is left with a blank canvas. Also describe sounds, tastes, smells, and how things feel to the touch. “I waited in a chilly, mildewed alcove the size of an elevator” says a lot more than “I waited in a small room.” By grounding yourself in such details, you’ll avoid flowery, empty language reminiscent of greeting cards and embroidery pillows. You’ll give your stories credibility and staying power.

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Work Effectively with Your Interpreter As companies do business farther and farther from home, presenters increasingly need translation. And working with an interpreter always complicates things. You can make it easier, though, with preparation. Start by picking the right type of interpreter for your situation. Three types are available: • Simultaneous: The interpreter sits in a soundproof booth while you present without disruption. Audience members who need translation wear earphones. When I spoke to a large group of business leaders in Taiwan, more than half the audience used earphones. As a result, I got through a lot of material with little time lost. Simultaneous interpretation requires more overhead than the other types do, since it involves technology.

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• Consecutive: The interpreter shares the stage with you. After you make a point, you pause for her to relay what you’ve said. You can use this approach in less-formal settings or if you don’t have the budget for simultaneous interpretation. • Whispering: Here, the interpreter whispers translation to you when audience members make comments or raise questions. This approach works best if you are familiar enough with the language to understand most of what’s said but need help here and there with specific words and phrases. Once you’ve sorted out which kind you need, here’s how to choose the right person and work effectively with her. If you can, allow up to a month to do the following: • Test your chemistry: Some interpreters bring energy to the presentation; others can drain you. Spend time speaking with yours before you hire her. If you have time to interview a few candidates, all the better. You’ll know someone’s a good fit if she makes you laugh, for example, or calms you down. The interpreter shouldn’t agitate you in any way—public speaking in a different culture is hard enough as it is. You should trust that she values your material and will represent it well. • Call in reinforcements: If you can’t find an excellent interpreter who’s also a subject matter expert (a rare breed), use the professional interpreter as

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your primary source of translation—but also enlist an expert who speaks both languages to help out. That way you’ll have someone who can correct the interpreter if she makes content mistakes here and there, in real time, or who can simply step in at a point where the material gets highly specialized or technical. • Prepare half as much material: If you are given an hour, prepare 30 minutes’ worth of material. It takes twice as long to convey your message with a consecutive interpreter—and even with the other types, you’ll need extra time to translate any Q&A discussion. • Send your notes: A week ahead of time, send over your notes or a transcript of a similar talk so the interpreter can practice. Even if you don’t deliver your presentation exactly the same way, she’ll get a feel for your material and style. • Work through idioms and metaphors: Many phrases and sayings have no direct corollaries in other languages. If you’ve sent your notes or a transcript in advance, your interpreter will have time to flag anything that doesn’t translate clearly. She can then suggest regional stories and metaphors that would work in her culture. • Practice pacing: Rehearse with your interpreter when you arrive to get a sense of how much material she can translate at a time. Have her coach you

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on your speed of delivery, so she can keep up and audience members can process what you’re saying. • Complete each thought: Each burst of content should be a concise but complete thought. Otherwise, you’ll leave people hanging midphrase while the interpreter translates the first half of your point. Keeping your statements short and sweet makes it easy for the audience to follow you and engage with you.

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Get the Most out of Your Q&A A Q&A is a powerful, interactive way to address your audience’s concerns and drive your point home. Always allow time for Q&A in a business presentation—trim your talk if necessary. When people leave the room with burning, unanswered questions, they won’t adopt your ideas. Get the most out of your Q&A by: • Planning when you’ll take questions: Establish early on if you want to field questions throughout your talk or save them until the end. If you need to build a thorough case, ask people at the very beginning to hold questions until the end. But if you’re making a series of points, you can take questions after each one, while they’re fresh in people’s minds. • Anticipating questions: You can spend hours preparing a presentation and deliver it beautifully— and then undo all your hard work and undermine your credibility by fumbling a response to an un-

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expected question. Think through any questions the audience might raise, from the mundane to the hostile. (See “Anticipate Resistance” in the Message section.) Prepare answers ahead of time so you won’t be thrown off your game when all eyes are on you. Rehearse those answers, but still be mentally prepared for curveballs. Some questioners may feel a need to publicly challenge your idea. When that happens, it’s important to keep your composure. Knowing your material inside-out will help immensely. • Listening empathetically for subtext: Answer questions directly, but also try to identify and address any deeper ones behind them. (You’ll often find a larger issue or unspoken motive lurking in the shadows.) Say you’re in HR and you’re hosting an orientation for employees from a recently acquired company. If people ask why they don’t get to have monthly employee birthday parties anymore, you may be tempted to brush that off as silly—but the parties are probably a symbol of a bigger underlying problem. The question behind the question might be: “The culture we used to have isn’t valued here. How can we hang on to some of the traditions that made our organization feel like a family?” • Admitting when you don’t know something: Don’t fake an answer. Ever. Your audience will see right through it. If you don’t know the answer to a question, say that—and offer to do some research after the presentation and get back to the group. 188

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• Keeping a tight rein on large or tough crowds: If you’re presenting to a large group, ask a Q&A moderator to graciously take the microphone back after each question is asked. That way, one aggressive question won’t turn into a barrage. Or, if you don’t have a moderator, let the audience know up front that you’re answering one question per person so more folks will have a chance to participate. When I took delivery training classes, I learned to acknowledge questions from angry inquisitors—but to look at other audience members when answering them so it’s easier to move on to the next person and keep the discussion constructive. If your topic is emotionally charged or you’re addressing a crisis—a safety recall, for example— have a facilitator filter the questions. He can compile a mix of tough questions and lighter ones that might get a laugh, and omit those that stray off topic or seem to have a personal agenda behind them. He can also plant questions the audience might be too intimidated to ask—for instance, “Will people lose their jobs if we don’t make our numbers this year?” • Leaving a strong final impression: Don’t end abruptly after the Q&A—it feels incomplete and unsatisfying to the audience, and you’ll miss an opportunity to reinforce your message. Wrap up the discussion with a brief summary that recaps the “new bliss” you’re helping the audience achieve. (See “Make the Ending Powerful” in the Story section.) 189

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Build Trust with a Remote Audience Thanks to easily accessible webinar and teleconference technology, about 80% of corporate presentations are delivered remotely, according to several live surveys I’ve conducted with audiences at large companies in a range of industries. That’s a stunning percentage. Any time technology revolutionizes how we communicate, there’s a trade-off: Communication theorist Marshall McLuhan pointed it out when he proposed his system for examining the impact of new media on society. Use his system to examine remote presenting (figure 6-3), and you’ll see both positive and negative outcomes. Even though it’s designed to connect people remotely and even globally, the technology isolates participants from human contact. So how do you solve that problem? How do you build trust with your remote audience? That depends on whether you incorporate video streaming.

With video streaming When you’re visible to the audience, your body language—particularly eye contact and gestures—can help 191

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FIGURE 6-3

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you connect with people (see “Communicate with Your Body” earlier in this section). If you glance at your notes or slides too often, your eyes will look shifty, so keep them trained on the camera as much as possible. Place the camera at eye level so you and the audience are on even ground. Looking down at it forces viewers to look up at you. Cinematographers use that trick to show a character’s superiority—but the last thing you want to do is appear condescending.

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If you can, deliver your presentation standing rather than seated. This allows you to move naturally—use your hands freely, lean forward, step back—which puts viewers at ease. Overall, make your movements expansive to connect with the people in the room. But when you want remote viewers to see certain gestures, keep those hand motions closer to your chest so they’ll stay in the video frame. Use a high-quality video recorder and light yourself well: A professional-looking setup makes the audience feel valued.

Without video streaming Your voice is your most valuable tool for building trust when the audience can’t see you. But again, stand up—you’ll sound more open and relaxed than if you’re hunched over your computer. Hold people’s attention by varying your volume, pitch, and tone (see “Keep Remote Listeners Interested” in this section). But don’t overdo it—melodrama doesn’t earn anyone’s trust. You can also build trust through the visuals you post. Create slides that convey an “open” feel by using type that’s easy to read and keeping the graphics simple and clean. Also, in the spirit of transparency, let your audience download your deck.

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Keep Remote Listeners Interested When people tune in to a webinar or dial in to a teleconference, you can’t see them, so their temptation to multitask is great. My firm recently surveyed almost 400 people who’ve attended a webinar within the last year, and it turns out that more of them checked e-mail than doing any other activity—including watching the webinar (figure 6-4). That makes people’s in-boxes your biggest competitor. So what can you do to lure people away from their other tasks? • Break the content down into small bites: Feed participants small, tasty morsels one by one so they stay tuned in. Move through your points quickly— don’t spend a long time explaining concepts. And if you have slides, change them up about every 20 seconds.

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FIGURE 6-4

E-mail is your biggest competitor Webinar participants said they… 17%

Checked e-mail

15%

Watched the webinar

14%

Browsed the Internet

11%

Instant-messaged

10%

Caught up on work

9%

Cleaned up desk

8%

Text-messaged Ran to the bathroom

6%

Other answer

6%

Attended to hygiene Made phone calls

2% 1%

• Make your presentation interactive: Create useful activities for audience members to do, like spending a few minutes researching something and posting their findings in the chat window for everyone to see. If you ask people to take a survey, make sure the results will be of interest to them. And reward participants for paying close attention. When I was a guest on marketing consultant Chris Brogan’s video blog, I placed a sign behind me that said, “First one who posts on Twitter that they saw this sign wins a free book.” • Enjoy your own material: Your enthusiasm needs to come through in your voice, especially if the 196

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audience can’t see you on video. Smile as you share your material—and your voice will automatically take on a more cheerful tone. And if you say something funny, laugh a bit even if no one’s in the room with you—it invites listeners to laugh, too. • Vary the voices: Bring in other voices for interest. Try cohosting your presentation with another subject matter expert and bantering like morning show hosts. The audience will reengage each time a new speaker talks. • Pause strategically: When audiences tune out remote presenters, the presentations sound like white noise to them. Sprinkle in pauses before points you really want people to hear. That’ll cut through the white noise. When you begin speaking again, people will notice. Sometimes pausing also makes the audience think there’s a problem with the technology—and people reengage to fiddle with their computers. • Picture your listeners: Remember that you’re talking to people, not machines. Picture their faces in your mind and imagine that you’re having a live conversation with them. When I first started to present remotely, I struggled with talking naturally to the camera. So I took photos of my smiley staff members, cut out their faces, and taped them above my monitor (figure 6-5). This served as a visual reminder that I was speaking to real people.

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FIGURE 6-5

Visualizing real people

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Keep Your Remote Presentation Running Smoothly Since remote audiences are so susceptible to distraction, even minor annoyances can derail your presentation. Keep things running smoothly with the following checklist: • Provide clear instructions: When you send out an invitation explaining what the presentation is about, spell out how to register and log in, and explain any technical requirements up front so people don’t sign up only to discover later that they don’t have the equipment to participate. • Plan for technology snafus: Give the audience contact information for technical questions. E-mail handouts ahead of time, and have slides in a handy location online just in case the webinar technology fails.

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• Test your slides: Some webinar software “breaks” your slides by not properly displaying animations, builds, and transitions. Many path-based animations don’t work or are so choppy they are ineffective. Color contrast can fade, and photos become pixilated. Test your slides on the exact same machine you’re presenting from, because different operating systems and software behave differently. Click through each slide in the software and fix any problems. • Start on time: Set up at least 30 minutes in advance to make sure your audio and video are working properly. You don’t want attendees to think you’re ill prepared as they listen to you fuss with technology issues. • Reduce personal noise: Remove loud jewelry like bangle bracelets or earrings that can bang loudly against a headset. Minimize fidgeting. Don’t drum your fingers, click pens, shuffle paper, or take sips of water near the microphone. • Reduce environmental noise: Close your door and turn off fans and music. Close out of computer applications that have alert noises. Mute your microphone in the remote app when someone else is speaking so people won’t hear your breathing or throat clearing. Turn off your cell phone, and put your office phone on the “Do Not Disturb” setting. If people are dialing in for a teleconference, don’t

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put your phone on hold—they’ll hear your hold music. Mute it. • Reduce visual noise: Hide unnecessary software application windows and icons on your computer desktop to help focus the audience’s attention. Use your mouse as a pointing device; don’t frantically zing the arrow around your slides. • Reduce communal noise: Remote listeners can hear just one person at a time, so don’t have multiple conversations going at once during a teleconference. If someone in your room asks a question, repeat it so the remote audience can hear it. • Use a facilitator: Relieve some of your prepresentation stress by asking a facilitator to manage many of the details, like wrangling the technology, setting up the room, sending out the agenda and slides ahead of time, monitoring chat rooms, conducting surveys, and making sure people in all locations get a chance to be heard.

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Section 7

Impact

We are competing for relevance. —Brian Solis, principal analyst at Altimeter Group

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Build Relationships Through Social Media Social media channels give your audience a lot of control over your PR. People can broadcast bits of your content to their followers—quoting you, synthesizing your ideas, adding their own comments. Even if you have only 30 people in front of you when you speak, hundreds more—perhaps thousands, if your audience is highly networked—might catch a glimpse of what you’re saying and what others think of it. When the comments are positive, your ideas gain traction. At one event, a group of new attendees came to my talk about 15 minutes after I started. I found out afterward that an audience member had tweeted about my session, so some of his followers came to check it out. But sometimes the comments aren’t positive. Look at these sample tweets that went out during a highereducation conference presentation in Milwaukee:

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@jrodgers Starting to see the OMG I AM TRAPPED looks on faces. #heweb09 @jShelK We need a drinking game for every time he says “actually” and “actionable.” #heweb09 @stomer We need a tshirt, “I survived the keynote disaster of 09.” #heweb09 Within hours, someone created a shirt on CafePress and shared it with conference attendees (figure 7-1).

FIGURE 7-1

CafePress T-shirt

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In The Backchannel, communication consultant Cliff Atkinson writes about social media’s impact on presentations. He points out that the “backchannel”—the stream of chatter before, during, and after your talk—is constructive when it: • Enriches your message as people take notes, add commentary, and suggest additional resources on the topic • Provides a valuable archive of information to review after the presentation • Connects people in the room, building a community around the ideas • Allows people who can’t attend your live talk to follow dispatches and engage in conversations about it • Increases your reach to more people It’s destructive when it: • Distracts audience members so they pay more attention to the backchannel than to you • Steers the conversation to unrelated topics • Excludes audience members who are unaware of the backchannel or unable to join • Limits people’s ability to convey nuance or context, because of the brevity of the posts • Injects a rude or snarky tone, since people feel comfortable tweeting thoughts they wouldn’t say out loud

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Your goal is to avoid a backchannel revolt, where people rally one another to reject your message. How? By making the folks online feel heard. With or without your involvement, they’ll have conversations about you. So participate. Engage with people like a skilled conversationalist, and they’ll engage more fully and fairly with your ideas. Build relationships with them by: • Observing their behavior: Pay attention to what else they’re commenting on. Active social media users can point you to hot spots online—a LinkedIn discussion group, for instance, or a brand’s fan page—where you can begin or join conversations with potential customers or advocates. • Providing a channel: Create a Twitter hashtag for your presentation and invite audience members to use it to chat with you and one another about your message. (Of course, this is appropriate only for external presentations with broad audiences. You wouldn’t broadcast content from confidential company meetings, for example, or client sales calls.) Encourage attendees to use the backchannel before, during, and after your presentation; display your hashtag on an introductory slide. • Asking for their input: Try presenting a partially developed idea and asking people to help you refine it through social media. I do this all the time and get useful replies. When I don’t know much

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about an audience I’m preparing to address, I’ll do some digging on my own—but I’ll also ask my Twitter channel what might be on the minds of people attending a certain event, for instance, or working for a particular company or industry.

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Spread Your Ideas with Social Media Use social media content the way you use stories, visuals, and sound bites: to reinforce and spread your message. You can write blog entries, post photos, commission infographics, and produce videos that enhance your ideas so your audience feels compelled to share them with others. If you want to get started but don’t generate a lot of content yet, tweet links to other experts’ articles and blog posts that support your talk. Social media activity usually spikes during a presentation, with moderate chatter beforehand and afterward. Facilitate the conversation at its peak by: • Streaming your presentation: Post a live video stream of your talk so people can attend remotely. This is the most direct way of extending your reach online, because the full message comes through, not just the chatter around it. • Time-releasing messages and slides: Craft messages and slides expressly for social me-

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dia channels, and use technology to automatically push them out at key moments during the presentation. You can download social media tools to program the time-release. Or you can add 140-character phrases to your notes field in PowerPoint and set them to auto-tweet when you advance the slides. • Selecting a moderator: Assign someone—a colleague, a guest blogger, an audience member—to keep the social media thread constructive. Pick a person who’s quick-witted, with a strong command of your material. Ask her to tweet key phrases as you say them, raise thought-provoking questions online, and bring the chatter back on topic when it starts to stray. Also have your moderator send out links to your slides (post them on slideshare.com or as pdfs on your website). • Repeating audience sentiment: In addition to broadcasting your message, the moderator should repeat (and validate) what live audience members are saying. The currency of social media is reciprocity: If you don’t spread the ideas of others, yours probably won’t get anywhere. • Posting photos of your talk: Enlist someone to photograph your presentation. To give social media users a sense of immediacy, he can work with your moderator to post the images while you’re speaking.

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• Encouraging blogging: Invite bloggers, journalists, and social media specialists to attend and cover your presentation. You’ll increase your reach exponentially through their outlets and followers. Social media guru Dan Zarrella studied what types of social media content people like to share during presentations. Here are a couple of tips from his research: • Don’t be too overt: People want to identify what’s worth spreading on their own. So resist the temptation to use a little Twitter bird to flag sound bites you want the audience to spread. They’ll actually get shared less. • Be novel: Close to 30% of respondents in Zarrella’s study said they were more likely to tweet or blog about a presentation if it was novel or newsworthy. For an idea to spread, it needs to be distinct and stand out. After you present, post a video of your talk on your website and on LinkedIn, Facebook, and other social media sites. Though most backchannel activity typically happens during the talk, presentations sometimes go viral after the fact. (Great ones can get hundreds of thousands of views week after week.) Posting a video will also help you capture new audience members who didn’t know about your presentation when you gave it or weren’t able to tune in to the streamed version or the backchannel.

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Gauge Whether You’ve Connected with People Gathering feedback on your talk in real time and after you’re done gives you different kinds of insights—all of them valuable.

Watch the backchannel Have a moderator keep an eye on social media and send text messages to your cell phone if she thinks you should address any criticisms in a Q&A at the end of your talk. (She should pass along tough but fair comments—and filter out any chatter that would completely throw you offkilter.) Or, if you’re comfortable tweaking your message as you go, try putting your phone in silent mode, setting it on the podium or table in front of you, and glancing at it throughout the presentation. If the audience begins to revolt on the backchannel, you can change direction. Let people know you’ve monitored their sentiment because you want to address their concerns.

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Watch the live audience People in the room will show how they’re feeling through their posture and facial expressions. Keep a keen eye out for physical cues that they’re engaged in your material. One reason Steve Jobs could maintain a heightened sense of anticipation during a 90-minute keynote is because he had a gift for eliciting frequent physical reactions. In his 2007 iPhone launch presentation, the audience laughed 79 times and clapped 98 times—that’s about one reaction every 30 seconds. It’s important to pick up on negative cues, too, so you can change course. Are audience members leaning back with their arms crossed? That could be a sign of resistance. Do they look tired? Are they fidgeting? Looking around? Checking e-mail? They may be bored or apathetic toward your ideas. If they’re not demonstrating engagement by leaning forward, nodding, smiling, and taking notes, find a way of drawing them in. One conference presenter could easily tell from body language that he was missing the mark with his audience—people clearly weren’t into his message. Instead of dragging on, he stopped, admitted that he’d miscalculated when he’d prepared, and asked if he’d be given a chance to speak at the next conference if he promised to do a better job of understanding the group’s needs. He got a standing ovation and an invitation to come back the next year.

Survey your audience A survey isn’t quite as immediate as backchannel chatter and other real-time feedback, but it gives you more 216

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control over the kinds of insights you’ll get from the audience—and the comments may be more thoughtful. Make it short and direct, and have people fill it out on paper, online, or by e-mail. Explicitly ask them to be candid. Project a slide at the end of your talk encouraging people to rate you either right away, with their phones or tablets, or at their leisure. Organizers of large events often survey audiences at all the sessions. If you’re speaking at such an event, ask for the results. Even if you’re doing a much smaller, lessformal presentation, you can ask one or two audience members whose opinion you value to give you an honest read on how it went. Tell them you’re trying to refine your skills, and they’ll probably be glad to help.

Analyze sentiment If you’re giving a high-stakes talk to a large group—a keynote address, for example—it’s probably worth analyzing social media data, such as how many people blogged about your talk, how much traffic was driven to the press announcement through social media, and whether the coverage and comments were negative or positive. This will give you an even finer-grained picture of how well you’ve connected with your audience. But the data can be daunting if you don’t know what you’re doing. Hire an analytics specialist to really dig in and help you see where you did well and where you can improve. In the analysis, you may discover a rival you didn’t know about, for instance, or a new key influencer who drives buying behavior.

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Analyze your reach You can also use analytics tools to measure how many people spread your message through social media, how many clicked on the shared links, and whether your message was picked up by the people you’d want to hear it. Again, work with a data specialist. It takes an iron gut to digest critical feedback. But it will make you a better presenter. Look closely at what the audience is saying about you, and modify your message, visuals, and delivery so you’ll resonate more deeply with people in the future. I launched my speaking career at a small annual conference. The first survey I got back said that I delivered a fire hose of valuable information, but the audience felt no connection. The event organizer told me I should incorporate more personal stories. It was painful to hear, but true. I took the feedback very seriously. In fact, it sent me on a several-year journey studying story principles and structure, which I now apply to presentations. I’m not suggesting that every piece of feedback you get will be useful or even true. Usually, though, if you put the audience’s needs first when you create your content and you’re sincere in your approach when you deliver it, people will want to help you succeed.

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Follow Up After Your Talk Your presentation is done, and the adrenaline has stopped pumping. Now what? Once you’ve won people over to your point of view, help them implement your ideas. Encourage them. Bring them new insights. Remove roadblocks. Keep your message alive by: • Sending personal notes: It’s rare to get a nice handwritten note these days, and people appreciate it when they do. Send a note whenever you feel grateful—to a colleague who helped you set up your presentation, for example, or to a busy executive who made time to attend and voice her support. (I’ve sent a few “I’m sorry” notes, too—it works both ways.) It can be a formal branded thank-you note or a clever card that touches on a personal conversation you had with an audience member. In a world of digital communications, a human touch stands out.

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Impact

• E-mailing the audience: Follow up with an e-mail thanking people for their time. If appropriate, summarize your big idea, key points, call to action, and “new bliss.” Many times, event organizers will share their attendees’ e-mail addresses with you in lieu of paying speaking fees. • Being accessible: If you presented within your organization, being accessible can mean hosting a lunch immediately after your talk, for instance, or blocking off your calendar so you can have an open door to answer questions in more detail. If you spoke to a broader audience and don’t have people’s contact information, send out thank-yous and other follow-up messages through blog and social media posts. Respond to anyone who starts a thoughtful conversation with you. • Sending materials: If you promised the audience any materials in your talk, get them out right away. You might want to offer thank-you gifts such as free books or access to secure content, but check with the audience first. Many people have contracts with their employers that don’t allow them to accept gifts from vendors or industry influencers. • Calling or meeting with individuals: Suppose you presented a new initiative that’s going to be demanding on your team. Spend time listening to each member’s concerns. Pick up the phone if it’s not possible to talk to everyone in person. Insights

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from these conversations can help shape your next piece of communication with the group. If you discover, for instance, that people are most worried about limited resources, describe your plans for shoring them up. • Booking “next steps” meetings: Gather folks afterward to answer questions that require some research or analysis, and work together on a roadmap for achieving your goals. Facilitate collaboration in any way you can—for instance, order in lunch and ask your project leaders to brainstorm ways of marketing your initiative internally. • Presenting again: Though your presentation is done, you may need to do a few more like it to share your message with other groups and move your ideas along. If you’re selling a product or service, the purpose of the first presentation is usually to get a second presentation—that is, face-to-face time with a decision maker. Think of each interaction as one moment in a larger relationship with your audience. That’s the mind-set it takes to persuade people to change their thinking and behavior—and their world of work.

221

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Index

accessibility, 220 analytical appeal, 51–53 anecdotes, 85–87 animation, 151–152 appearance, 170 Atkinson, Cliff, 207 atmosphere, 169–170 audience appealing to, 8 call to action for, 39–41 connecting with, 91–92, 215–218 creating value for, 4–5 cues from, 216 expectations of, 12 feedback from, 215–218 finding common ground with, 21–23 follow-up with, 219–221 knowing your, 15–17 power of the, 3–5 Q&A sessions with, 187–189 relationship building with, 205–209 remote, 165, 191–193, 195–201 resistance from, 33–35 segmentation, 7–9

of senior executives, 11–13 surveying, 104–105, 216–217 transforming, 19–20 authenticity, 171–173 backchannels, 215 Ballmer, Steve, 171–173 big idea content to support, 29–32, 43–45 defining your, 27–28 big-word slides, 118–119 blogging, 213 body language, 175–178 Bolte Taylor, Jill, 176–177 brainstorming, 29–32 Brogan, Chris, 196 Brown, Tim, 43 bullet slides, 118 buzz, 104 Cain, Susan, 173 call to action, 39–41 change, 19–20 charts, 137–141 clarification, of data, 137–141 clichés, visual, 127–128

223

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Index

comfort monitors, 164–165 common ground, with audience, 21–23 communal noise, 201 communication nonverbal, 175–178 vocal style, 179–180 comparisons, 60, 141 conceptual image slides, 120–121 consecutive interpreters, 184 content. See also message existing, 29–30 to support big idea, 29–32 contrast, 37–38, 130–132, 138, 152 controlling idea, 27–28 convergent thinking, 43, 44 conversational tone, 17 co-presenters, 107, 197 data, displaying, 137–141 data slides, 119–120 delivery authenticity in, 171–173 nonverbal communication during, 175–178 rehearsing, 155–157 to remote audiences, 191–193 scoping out venue for, 159– 162 setting tone for, 169–170 stage fright and, 167–168 of stories, 181–182 technology glitches during, 163–165 voice for, 179–180 delivery styles, 93 demographics, 7 design, 111–112, 129–135 diagrams, 120, 143–148 Disney, Walt, 109

disposition, 170 divergent thinking, 43, 44 documents, creating, 95–96 dramatizations, 84–85 dress, 170 dynamic opposites, 37 e-mail, 195, 196, 220 emotional appeal, 51–53, 75–79 emotional resistance, 34 enthusiasm, 196–197 environmental noise, 200–201 equipment malfunctions, 163–165, 199 ethnographics, 8 executive summary slides, 12–13 expectations, audience, 12 eye contact, 175 facial expressions, 175 facilitators, 201 feedback, 105, 155–156, 215– 218 final impressions, 189 firmographics, 8 first impressions, 169–170 floor plan, 160 flow, 129–130 flow diagrams, 144, 145 follow-up, 104–105, 219–221 food plan, 160–161 Gallo, Carmine, 55 Gates, Bill, 84 gestures, 176–178 gifts, 220 glance test, 114 group brainstorming, 30–31 Haemer, Ken, 1 Haims, Nolan, 96

224

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Index

handouts, 104 Heath, Chip, 25 Heath, Dan, 25 hierarchy, visual, 133 hook diagrams, 144 hub-and-spoke diagrams, 144 ideas big idea, 27–32, 43–45 brainstorming, 29–32 choosing best, 43–45 contrasting, 37–38 one per slide, 123–125 organizing your, 47–49 spreading via social media, 211–213 visualizing, 97–98 idioms, 185 insights, 4 interpreters, 183–186 jargon, 55–57 Jobs, Steve, 59–60, 89 join diagrams, 144, 145 King, Martin Luther, Jr., 81 Labalme, Victoria, 171, 181 length of presentation, 99–101 logical resistance, 33–34 McKee, Robert, 61 McLuhan, Marshall, 191 media choosing right, 91–93 follow-up, 104–105 mixed, 107–108 online, 104 presentation software, 95–98 testing, 165 memorable stories, 83–87

message amplifying, through contrast, 37–38 appeal of your, 51–53 call to action, 39–41 choosing best ideas for, 43–45 choosing medium for delivery of, 91–93 content to support, 29–32 defining your big idea, 27–28 emotional impact of, 75–79 memorable, 83–87 organizing your, 47–49 resistance to your, 33–35 sound bites, 59–60 metaphors translation of, 185 using, 60, 81–82 visual, 127–128 mind mapping, 30, 31 moderators, 212, 215 Morgan, Nick, 168 navigation slides, 117–118 network diagrams, 144, 145 noise visual, 201 during webinars, 200–201 nonverbal communication, 175–178 opposites, 37–38 order of events, 161 organization, 47–49 pacing, 185–186 pauses, 197 personal notes, 219 personal stories, 77–79 persuasion, off-stage, 103–105 photographs, posting online, 212

225

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Index

planning, xvi politics, 7 posture, 175–176 PowerPoint, 95–98 practical resistance, 34 precommunication, 169 preparation rehearsals, 155–157 scoping out venue, 159–162 presentations audience for, 3–23 communication before, 103–104 delivery of, 153–201 endings of, 189 follow-up after, 104–105, 219–221 impact of, 203–221 length of, 99–101 media for, 89–108 message for, 27–60 planning, xvi recorded, 161–162 remote, 191–193, 195–201 setting tone for, 169–170 short versions of, 156 slides for, 109–152 social media’s impact on, 205–209 stories in, 61–87 storyboarding, 123–125 streaming, 211 presentation software, 95–98 presenters feedback from skilled, 155– 156 multiple, 107, 197 self-focused, 3–4 projection size, 165 psychographics, 7 punctuality, 200

Q&A sessions, 187–189 quote slides, 119 Raphaely, Mirran, 84–85 recordings, 161–162 rehearsals, 13, 155–157 relationship building, 205–209 remote audience, 165, 191–193, 195–201 repetition, 59–60 resistance, 33–35 resonance, 21 Reynolds, Garr, 96 rhetorical devices, 59–60 rhythmic repetition, 59–60 Roam, Dan, 124 Sandberg, Sheryl, 97 scale, of charts, 138–139 schedule, 161 seating plan, 160 segmentation, of audience, 7–9 segment diagrams, 144, 145 senior executives, 11–13 sensory details, 182 similes, 60 simultaneous interpreters, 183 slides animated, 151–152 arrangement of, 115, 129– 135 avoiding clichés in, 127–128 designing, 111–112, 129–135 diagrams on, 143–148 displaying data in, 137–141 executive summary, 12–13 notes for, 96–97 number of, 149–150 organizing, 47–49 posting online, 104 presentation software, 95–98

226

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Index

refining, 156 simplicity of, 113–116 storyboarding, 123–125 testing, 164, 200 types of, 117–121 when not to use, 149 slide-show mode, 156–157 slideuments, 96 slogans, 60 social media monitoring, 215, 217 reach of, 218 relationship building with, 205–209 spreading ideas via, 211–213 software, presentation, 95–98 Solis, Brian, 203 sound bites, 59–60 stack diagrams, 144, 145 stage fright, 167–168 statistics, shocking, 83–84 stories beginnings of, 67–69 bringing to life, 181–182 for emotional impact, 75–79 endings of, 73–74 memorable, 83–87 metaphors in, 81–82 middles of, 71–72 personal, 77–79 principles of, 63–64 reexperiencing, 181–182 structure of, 64, 65–66 storyboarding, 123–125 summary slides, 12–13 supporting material, 104 surveys, 104–105, 216–217 technology glitches, 163–165, 199 new media, 191–193

teleconferences, 195–201 teleprompter notes, 96–97 teleprompters, 164–165 time for presentation, 99–101 starting on, 200 title slides, 117 tone, setting the, 169–170 transformation, 19–20, 63–64 translations, 183–186 transparency, 171 Trollope, Rowan, 85–87 Twitter, 208 unity, 133–135 value creation, 4–5 venue, scoping out, 159–162 verbal tics, 180 video slides, 121 video streaming, 191–193, 211 visual hierarchy, 133 visual noise, 201 visuals. See also slides avoiding clichés in, 127–128 coordination of, 114 design elements for, 129–135 emphasizing important elements in, 137–138 evocative, 84 of ideas, 97–98 vocal style, 179–180 walk-in slides, 117 walk-out slides, 121 webinars, 195–201 whispering interpreters, 184 white space, 132–133 Zarrella, Dan, 59, 213

227

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About the Author

Communication expert Nancy Duarte has more than 20 years of experience working with global organizations and thought leaders from a wide range of industries and fields. Her company, Duarte, Inc., has created more than a quarter of a million presentations for its clients. Her team also teaches corporate and public workshops on writing and storyboarding effective presentations. Duarte is the author of two award-winning books: Resonate: Present Visual Stories That Transform Audiences, which spent nearly a year on Amazon’s top 100 business book bestsellers list; and Slide:ology: The Art and Science of Creating Great Presentations. Duarte has been featured in Fortune, Forbes, Fast Company, Wired, the Wall Street Journal, the New York Times, and the LA Times, and on CNN.

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Smart advice and inspiration from a source you trust. Whether you need help tackling today’s most urgent work challenge or shaping your organization’s strategy for the future, Harvard Business Review has got you covered.

HBR Guides Series How-to essentials from leading experts HBR Guide to Better Business Writing HBR Guide to Finance Basics for Managers HBR Guide to Getting the Right Work Done HBR Guide to Managing Up and Across HBR Guide to Persuasive Presentations HBR Guide to Project Management

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Smarter than the average guide

Hbr Guide to Better Business Writing Engage readers Tighten and brighten Make your case By Bryan A. Garner

HBR Guide to Better Business Writing

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Harvard Business Review Guides Arm yourself with the advice you need to succeed on the job, from the most trusted brand in business. Packed with how-to essentials from leading experts, the HBR Guides provide smart answers to your most pressing work challenges.

The titles include: HBR Guide to Better Business Writing HBR Guide to Finance Basics for Managers HBR Guide to Getting the Mentoring You Need HBR Guide to Getting the Right Job HBR Guide to Getting the Right Work Done HBR Guide to Giving Effective Feedback HBR Guide to Making Every Meeting Matter HBR Guide to Managing Stress HBR Guide to Managing Up and Across HBR Guide to Persuasive Presentations HBR Guide to Project Management

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Other Books Written or Edited by Bryan A. Garner Garner’s Modern American Usage Garner’s Dictionary of Legal Usage Black’s Law Dictionary (all editions since 1996) Reading Law: The Interpretation of Legal Texts, with Justice Antonin Scalia Making Your Case: The Art of Persuading Judges, with Justice Antonin Scalia Garner on Language and Writing The Redbook: A Manual on Legal Style The Elements of Legal Style The Chicago Manual of Style, Ch. 5, “Grammar and Usage” (15th & 16th eds.) The Winning Brief Legal Writing in Plain English Ethical Communications for Lawyers Securities Disclosure in Plain English Guidelines for Drafting and Editing Court Rules The Oxford Dictionary of American Usage and Style A Handbook of Basic Legal Terms A Handbook of Business Law Terms A Handbook of Criminal Law Terms A Handbook of Family Law Terms

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HBR Guide to Better Business Writing Bryan A. Garner

HARVARD BUSINESS REVIEW PRESS Boston, Massachusetts

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Copyright 2012 Bryan A. Garner All rights reserved No part of this publication may be reproduced, stored in, or introduced into a retrieval system or transmitted, in any form or by any means (electronic, mechanical, photocopying, recording, or otherwise), without the prior permission of the publisher. Requests for permission should be directed to [email protected] or mailed to Permissions, Harvard Business School Publishing, 60 Harvard Way, Boston, Massachusetts 02163. Library of Congress Cataloging-in-Publication Data Garner, Bryan A. HBR guide to better business writing / Bryan A. Garner. p. cm. — (Harvard business review guides) Includes bibliographical references and index. ISBN 978-1-4221-8403-5 (alk. paper) 1. Commercial correspondence. 2. Business writing. I. Harvard business review. II. Title. III. Title: Guide to better business writing. HF5718.3.G37 2013 808.06′665—dc23 2012032809

Find more digital content or join the discussion on www.hbr.org. The web addresses referenced and linked in this book were live and correct at the time of the book’s publication but may be subject to change.

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To J.P. Allen, my lifelong friend

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What You’ll Learn

Do you freeze up when writing memos to senior executives? Do your reports meander and raise more questions than they answer for key stakeholders? Do your e-mails to colleagues disappear into a void, never to be answered or acted on? Do your proposals fail to win clients? You’ll lose a lot of time, money, and influence if you struggle with business writing. And it’s a common problem. Many of us fumble for the right words and tone in our documents, even if we’re articulate when we speak. But it doesn’t have to be that way. Writing clearly and persuasively requires neither magic nor luck. It’s a skill— and this guide will give you the confidence and the tools you need to cultivate it. You’ll get better at: • Pushing past writer’s block. • Motivating readers to act. • Organizing your ideas. • Expressing your main points clearly.

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What You’ll Learn

• Cutting to the chase. • Holding readers’ attention. • Writing concise, useful summaries. • Trimming the fat from your documents. • Striking the right tone. • Avoiding grammar gaffes.

x

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Contents

Introduction: Why you need to write well

xv

Section 1: Delivering the Goods Quickly and Clearly 1. Know why you’re writing

3

2. Understand your readers

7

3. Divide the writing process into four separate tasks

13

4. Before writing in earnest, jot down your three main points—in complete sentences

19

5. Write in full—rapidly

27

6. Improve what you’ve written

31

7. Use graphics to illustrate and clarify

37

Section 2: Developing Your Skills

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8. Be relentlessly clear

43

9. Learn to summarize—accurately

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Contents

10. Waste no words

53

11. Be plain-spoken: Avoid bizspeak

57

12. Use chronology when giving a factual account

67

13. Be a stickler for continuity

71

14. Learn the basics of correct grammar

77

15. Get feedback on your drafts from colleagues

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Section 3: Avoiding the Quirks That Turn Readers Off 16. Don’t anesthetize your readers

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17. Watch your tone

99

Section 4: Common Forms of Business Writing 18. E-mails

105

19. Business Letters

111

20. Memos and Reports

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21. Performance Appraisals

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Appendixes A. A Checklist for the Four Stages of Writing

139

B. A Dozen Grammatical Rules You Absolutely Need to Know

143

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Contents

C. A Dozen Punctuation Rules You Absolutely Need to Know D. Common Usage Gaffes

153 163

E. Some Dos and Don’ts of Business-Writing Etiquette F. A Primer of Good Usage

165 169

Desk References

199

Index

203

Acknowledgments

209

About the Author

211

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Introduction: Why you need to write well You may think you shouldn’t fuss about your writing— that good enough is good enough. But that mind-set is costly. Supervisors, colleagues, employees, clients, partners, and anyone else you communicate with will form an opinion of you from your writing. If it’s artless and sloppy, they may assume your thinking is the same. And if you fail to convince them that they should care about your message, they won’t care. They may even decide you’re not worth doing business with. The stakes are that high. Some people say it’s not a big deal. They may feel complacent. Or they may think it’s ideas that matter—not writing. But good writing gets ideas noticed. It gets them realized. So don’t be misled: Writing well is a big deal. Those who write poorly create barriers between themselves and their readers; those who write well connect with readers, open their minds, and achieve goals.

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Introduction

All it takes is a few words to make a strong impression, good or bad. Let’s look at four brief passages—two effective and two not. See whether you can tell which ones are which:

1. In the business climate as it exists at this point in time, one might be justified in having the expectation that the recruitment and retention of new employees would be facilitated by the economic woes of the current job market. However, a number of entrepreneurial business people have discovered that it is no small accomplishment to add to their staff people who will contribute to their bottom line in a positive, beneficial way. 2. In this job market, you might think that hiring productive new employees would be easy. But many entrepreneurs still struggle to find good people. 3. The idea of compensating a celebrity who routinely uses social media to the tune of thousands of dollars to promote one’s company by tweeting about it may strike one as unorthodox, to say the least. But the number of businesses appropriating and expending funds for such activities year on year as a means of promotion is very much on the rise. 4. Paying a celebrity thousands of dollars to promote your company in 140-character tweets

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Introduction

may seem crazy. But more and more businesses are doing just that. Can you tell the difference? Of course you can. The first and third examples are verbose and redundant. The syntax is convoluted and occasionally derails. The second and fourth examples are easy to understand, economical, and straightforward. They don’t waste the reader’s time. You already recognize business writing that gets the job done—and trust me, you can learn to produce it. Maybe you think writing is a bother. Many people do. But there are time-tested methods for reducing the worry and labor. That’s what you’ll find in this book, along with lots of “before” and “after” examples that show these methods in action. (They’re adapted from real documents, but disguised.) Good writing isn’t an inborn gift. It’s a skill you cultivate, like so many others. Anyone of normal athletic ability can learn to shoot a basketball or hit a golf ball reasonably well. Anyone of normal intelligence and coordination can learn to play a musical instrument competently. And if you’ve read this far, you can learn to write well—probably very well—with the help of a few guiding principles.

Think of yourself as a professional writer If you’re in business, and you’re writing anything to get results—e-mails, proposals, reports, you name it—then you’re a professional writer. Broadly speaking, you belong to the same club as journalists, ad agencies, and book

xvii

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Introduction

authors: Your success may well depend on the writing you produce and its effect on readers. That’s why what you produce should be as polished as you can make it. Here’s an example you may be familiar with. Various versions of this story exist—it’s sometimes placed in different cities and told with different twists: A blind man sits in a park with a scrawled sign hanging from his neck saying, “I AM BLIND,” and a tin cup in front of him. A passing ad writer pauses, seeing only three quarters in the cup. He asks, “Sir, may I change your sign?” “But this is my sign. My sister wrote it just as I said.” “I understand. But I think I can help. Let me write on the back, and you can try it out.” The blind man hesitantly agrees. Within two hours the cup is full of coins and bills. As another passerby donates, the blind man says: “Stop for a moment, please. What does my sign say?” “Just seven words,” says the newest contributor: “It is spring, and I am blind.”

It matters how you say something.

Read carefully to pick up good style To express yourself clearly and persuasively, you’ll need to develop several qualities: • An intense focus on your reason for writing—and on your readers’ needs. • A decided preference for the simplest words possible to express an idea accurately.

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Introduction

• A feel for natural idioms. • An aversion to jargon and business-speak. • An appreciation for the right words in the right places. • An ear for tone. How can you acquire these traits? Start by noticing their presence or absence in everything you read. Slow down just a little to study the work of pros. This shouldn’t be a chore, and it shouldn’t be squeezed in at the end of a long day. Grab a few spare minutes, over your morning coffee or between tasks, and read closely. Find good material that you enjoy. It could be the Economist or the Wall Street Journal, or even Sports Illustrated, which contains tremendous writing. If you can, read at least one piece aloud each day as if you were a news announcer. (Yes, literally aloud.) Read with feeling. Heed the punctuation, the phrasing, the pacing of ideas, and the paragraphing. This habit will help cultivate an appreciation of the skills you’re trying to acquire. And once you’ve honed your awareness, all you need is practice.

Recognize the payoff An ambiguous letter or e-mail message will require a “corrective communication” to clear up a misunderstanding—which saps resources and goodwill. A poorly phrased and poorly reasoned memo may lead to bad decision-making. An ill-organized report can obscure

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Introduction

important information and cause readers to overlook vital facts. A heavy, uninviting proposal will get put aside and forgotten. A badly drafted pitch to a key client will only consume the time of higher-ups who must rewrite it at the eleventh hour to make it passable—lowering its chances of success because of the hectic circumstances surrounding its preparation. That’s a lot of wasted time—and a drag on profits. But you can prevent these problems with clear, concise writing. It’s not some mysterious art, secret and remote. It’s an indispensable business tool. Learn how to use it, and achieve the results you’re after. One prefatory note: Asterisks are used in the text throughout this book to mark examples of incorrect English grammar, spelling, or usage.

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Section 1

Delivering the Goods Quickly and Clearly

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Chapter 1

Know why you’re writing Many people begin writing before they know what they’re trying to accomplish. As a result, their readers don’t know where to focus their attention or what they’re supposed to do with the message. So much depends on your purpose in writing that you must fix it firmly in your mind. What do you want the outcome to be? Do you want to persuade someone to sign a franchise contract, for instance? Or to stop using your trademark without permission? Or to come to a company reception? Say clearly and convincingly what the issue is and what you want to accomplish. With every sentence, ask yourself whether you’re advancing the cause. That will help you find the best words to get your message across.

Form follows function Say your firm rents space in an office building that has thoroughly renovated the entrance and the entire first

3

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Delivering the Goods Quickly and Clearly

floor. Your general counsel has alerted you that the landlord has violated the Americans with Disabilities Act (ADA). For example, there are no wheelchair-access ramps or automatic doors. You’ve decided to write to the landlord. But why are you writing? The answer to that question determines much of what you’ll say and all of the tone that you’ll use. Consider three versions of the letter you might write:

Version #1 You’re good friends with the landlord, but you think that the law should be followed for the good of your employees and your customers. Purpose: to gather more information. Tone: friendly. Dear Ann: The new foyer looks fantastic. What a great way for us and others in the building to greet customers and other visitors. Thank you for undertaking the renovations. Could it be that the work isn’t finished? No accommodations have yet been made for wheelchair accessibility—as required by law. Perhaps I’m jumping the gun, and that part of the work just hasn’t begun? Please let me know. Let’s get together for lunch soon. All the best, Version #2 You’re on good terms with the landlord, but on principle, you don’t like being in a building that isn’t ADA-compliant. You have a disabled employee on staff, and you want the 4

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Know why you’re writing

situation righted. Purpose: to correct the oversight. Tone: more urgent. Dear Ann: Here at Bergson Company, we were delighted when you renovated the first floor and made it so much more inviting to both tenants and visitors. We are troubled, however, by the lack of wheelchair-access ramps and automatic doors for handicapped employees and customers, both of which are required by state and federal law. Perhaps you’re still planning that part of the renovations. If so, please advise. If this was a mere oversight, can you assure us that construction on ramps and automatic doors will begin within 60 days? Otherwise, as we understand it, we may be obliged to report the violation to the Vermont Buildings Commission. Without the fixes, you may be subject to some hefty fines—but we feel certain that you have every intention of complying with the law. Sincerely, Version #3 You’ve had repeated problems with the landlord, and you have found a better rental property elsewhere for your company. Purpose: to terminate your lease. Tone: firm, but without burning bridges. Dear Ms. Reynolds: Four weeks ago you finished renovating the first floor of our building. Did you not seek legal counsel? You have violated the Americans with Disabilities Act—as 5

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Delivering the Goods Quickly and Clearly

well as state law—by failing to provide a wheelchairaccess ramp and automatic doors for handicapped visitors and employees. Because four weeks have elapsed since you completed the work, we are entitled under state law to terminate our lease. This letter will serve as our 30 days’ notice. Although we have no doubt that your oversight was a good-faith error, we hope that you understand why we can’t stay in the building and have made plans to go elsewhere. We hope to remain on friendly terms during and after the move. Sincerely, These three letters are quite different because you are writing them to accomplish different things. Focus on the reaction you’re trying to elicit from the reader. You want results. Yet notice how even the sternest letter— Version 3—maintains a civil tone to foster goodwill. No hostility is necessary.

Recap • Consider your purpose and your audience before you begin writing, and let these guide both what you say and how you say it. • Plainly state the issue you’re addressing and what you hope to achieve. • Keep your goal in mind: Don’t undermine your efforts with a hostile or inappropriate tone.

6

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Chapter 2

Understand your readers Communication is a two-way exercise. Without knowing something about your readers—and about psychology in general, for that matter—you’ll rarely get your ideas across. What are their goals and priorities? What pressures do they face? What motivates them?

Respect readers’ time constraints The most important things to realize about all business audiences are these: • Your readers are busy—very busy. • They have little if any sense of duty to read what you put before them. • If you don’t get to your point pretty quickly, they’ll ignore you—just as you tend to ignore long, rambling messages when you receive them.

7

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Delivering the Goods Quickly and Clearly

• At the slightest need to struggle to understand you, they’ll stop trying—and think less of you. • If they don’t buy your message, you may as well have stayed in bed that day. Each of these universal tendencies becomes magnified as you ascend the ranks of an organization. Your job as a writer, then, is to: • Prove quickly that you have something valuable to say—valuable to your readers, not just to you. • Waste no time in saying it. • Write with such clarity and efficiency that reading your material is easy—even enjoyable. • Use a tone that makes you likable, so that your readers will want to spend time with you and your message. Do these things and you’ll develop a larger reservoir of goodwill. You’ll not only have a genuinely competitive edge, but you’ll also save time and money.

Tailor your message If you’re writing a memo to colleagues, for example, consider where they sit in the organization and what they’re expected to contribute to its success. Or if you’re responding to a client’s request for proposal, address every need outlined in the RFP—but also think about the client’s industry, company size, and culture. Your tone will change depending on your recipients, and so will your content. You’ll highlight the things they care about most—the ever-important “what’s in it for them.” 8

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Understand your readers

Connect with particular readers to connect with large audiences It’s challenging to write for a large, diverse group of readers, especially if you don’t know them. But you can make it easier by focusing on some specific person you know. In his preface to the U.S. Securities and Exchange Commission’s Plain English Handbook, Warren Buffett suggests grounding your prose by having a particular reader in mind:

When writing Berkshire Hathaway’s annual report, I pretend that I’m talking to my sisters. I have no trouble picturing them: Though highly intelligent, they are not experts in accounting or finance. They will understand plain English, but jargon may puzzle them. My goal is simply to give them the information I would wish them to supply me if our positions were reversed. To succeed, I don’t need to be Shakespeare; I must, though, have a sincere desire to inform.

If you focus on a smart nonspecialist who’s actually in your audience—or, like Buffett, imagine that you’re writing for a relative or a friend—you’ll strike a balance between sophistication and accessibility. Your writing will be more appealing and more persuasive. Your readers may have little or no prior knowledge about the facts or analysis you’re disclosing. But assume that they’re intelligent people. They’ll be able to follow you if you give them the information they need, and they won’t be bamboozled by empty, airy talk. 9

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Delivering the Goods Quickly and Clearly

NOT THIS:

BUT THIS:

We aspire to be a partner primarily concerned with providing our clients the maximal acquisition of future profits and assets and focus mainly on clients with complex and multi-product needs, large and midsized corporate entities, individual or multiple entrepreneurial agents, and profit-maximizing institutional clients. By listening attentively to their needs and offering them paramount solutions, we empower those who wish to gain access to our services with the optimal set of decisions in their possible action portfolio given the economic climate at the time of the advice as well as the fiscal constraints that you are subject to. Against the backdrop of significant changes within our industry, we strive to ensure that we consistently help our clients realize their goals and thrive, and we continue to strengthen the coverage of our key clients by process-dedicated teams of senior executives who can deliver and utilize our integrated business model. On the back of a strong capital position and high levels of client satisfaction and brand recognition, we have achieved significant gains in market share. We hope that you have a favorable impression of our company’s quantitative and qualitative attributes and will be inclined to utilize our services as you embark on your financial endeavors.

We’re a client-focused firm dedicated to making sure you get the most out of our services. Our client base includes individual entrepreneurs, midsized companies, and large corporations. If you decide to do business with us, we’ll give you financial advice that is in tune with the current economy and with what you can afford to invest. For years, we’ve consistently received the highest possible industry ratings, and we have won the coveted Claiborne Award for exceptional client satisfaction 17 of our 37 years in business. We hope to have the opportunity to work with you in your financial endeavors.

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Understand your readers

Recap • Understand that your readers have no time to waste: Get to the point quickly and clearly to ensure that your message gets read. • Use a tone appropriate for your audience. • Emphasize the items most important to your readers. If they can easily see how your message is relevant to them, they will be more likely to read it and respond. • Choose an intelligent, nonspecialist member of your audience to write for—or invent one—and focus on writing for that person. Your message will be more accessible and persuasive to all your readers as a result.

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Chapter 3

Divide the writing process into four separate tasks Do you feel anxious every time you sit down to write? Your main difficulty is probably figuring out how to begin. Don’t try to picture the completed piece before you’ve gathered and organized your material. It’s much too soon to think about the final, polished product—and you will just make the challenge ahead of you seem overwhelming. The worry can take more out of you than the actual writing. Instead, break up your work. Think of writing not as one huge task but as a series of smaller tasks. The poet, writer, and teacher Betty Sue Flowers has envisioned them as belonging to different characters in your brain: MACJ.1 That stands for Madman–Architect–Carpenter– 1. Betty S. Flowers, “Madman, Architect, Carpenter, Judge: Roles and the Writing Process,” Proceedings of the Conference of College Teachers of English 44 (1979): 7–10.

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Delivering the Goods Quickly and Clearly

Judge, representing the phases that a writer must go through: • The Madman gathers material and generates ideas. • The Architect organizes information by drawing up an outline, however simple. • The Carpenter puts your thoughts into words, laying out sentences and paragraphs by following the Architect’s plan. • The Judge is your quality-control character, polishing the expression throughout—everything from tightening language to correcting grammar and punctuation. You’ll be most efficient if you carry out these tasks pretty much in this order. Sure, you’ll do some looping back. For example, you may need to draft more material after you’ve identified holes to fill. But do your best to compartmentalize the discrete tasks and address them in order.

Get the Madman started Accept your good ideas gratefully whenever they come. But if you’re methodical about brainstorming at the beginning of the process, you’ll find that more and more of your good ideas will come to you early—and you’ll largely prevent the problem of finally thinking of your best point after you’ve finished and distributed your document. Get your material from memory, from research, from observation, from conversations with colleagues and oth-

14

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Divide the writing process into four separate tasks

ers, and from reasoning, speculation, and imagination. The problem you’re trying to solve may seem intractable, and you may struggle to find a good approach. (How on earth will you persuade the folks in finance to approve your budget request when they’re turning down requests left and right? How will you get the executive board to adopt a new mind-set about a proposed merger?) Don’t get hung up on the size of the challenge. Gathering ideas and facts up front will help you push through and defuse anxiety about the writing. How do you keep track of all this preliminary material? In the old days, people used index cards. (I wrote my first several books that way.) But today the easiest way is to create a rough spreadsheet that contains the following: • Labels indicating the points you’re trying to support. • The data, facts, and opinions you’re recording under each point—taking care to put direct quotes within quotation marks. • Your sources. Include the title and page number if citing a book or an article, the URL if citing an online source. (When writing a formal document, such as a report, see The Chicago Manual of Style for information on proper sourcing.) As you’re taking notes, distinguish facts from opinions. Be sure to give credit where it’s due. You’ll run aground if you claim others’ assertions as your own, because you’ll probably be unable to back them up convincingly. Worse, you’ll be guilty of plagiarism.

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Delivering the Goods Quickly and Clearly

This groundwork will save you loads of time when you’re drafting and will help you create a well-supported, persuasive document.

Let the Architect take the lead You may feel frustrated at first as you’re groping for a way to organize your document. If a sensible approach doesn’t come to mind after you’ve done your research and scouted for ideas, you may need to do more hunting and gathering. You want to arrive at the point of writing down three sentences—complete propositions—that convey your ideas. Then arrange them in the most logical order from the reader’s point of view (see chapter 4). That’s your bare-bones outline, which is all you typically need before you start drafting.

Give the Carpenter a tight schedule The key to writing a sound first draft is to write as swiftly as you can (you’ll read more about this in chapter 5). Later, you’ll make corrections. But for now, don’t slow yourself down to perfect your wording. If you do, you’ll invite writer’s block. Lock the Judge away at this stage, and try to write in a headlong rush.

Call in the Judge Once you’ve got it all down, it’s time for deliberation— weighing your words, filling in gaps, amplifying here and curtailing there. Make several sweeps, checking for one thing at a time: the accuracy of your citations, the tone, the quality of your transitions, and so on. (For an editorial checklist, see chapter 6.) If you try to do many things

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Divide the writing process into four separate tasks

at once, you won’t be doing any of them superbly. So leave plenty of time for multiple rounds of editing—at least as much time as you spent researching and writing. You’ll ferret out more problems, and you’ll find better fixes for them.

Recap • Approach a writing project as a series of manageable tasks using the MACJ method. • Use the Madman to gather research and other material for the project, diligently keeping track of quotations and sources. And allow more of your best ideas to come early by methodically brainstorming at the beginning of the process. • As the Architect, organize the Madman’s raw material into a sensible outline. Distill your ideas into three main propositions. • In the Carpenter phase, write as quickly as possible—without worrying about perfecting your prose. • Finally, assume the role of the Judge to edit, polish, and improve the piece. Do this in several distinct passes, each time focusing on only one element of your writing.

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Chapter 4

Before writing in earnest, jot down your three main points— in complete sentences A mathematician once told me that there are really only four numbers in the world: one, two, three, and many. There’s something to that: Four items just seem to be one too many for most people to hold in their memory. But a proposal, a report, or any other piece of business writing feels underdeveloped when it’s supported by only one or two points. So write down your three main points as full sentences, and spell out your logic as clearly as you can. That way, you’ll force yourself to think through your reasons 19

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Delivering the Goods Quickly and Clearly

for recommending a vendor, for example, or pitching an offer to a client—and you’ll make a stronger case. If you try to simply think things out as you write, you’ll run into trouble because you won’t really know yet what you’re hoping your reader will think or do. You’ll flail about, gradually clarifying your point as you make several runs at it. In the end, after multiple attempts, you may finally figure out what you have to say, but you probably won’t say it in a way that your reader can follow.

An example of finding your focus Let’s say your name is Carol Sommers, and you work at a small management-consulting firm. Your boss, Steve, owns the business and is considering acquiring a 17,000-square-foot building as his new office. Because you’re the office manager, Steve has asked you to think through the logistics and to write up your recommendations before the company makes an offer to purchase the building. At first, you’re at a loss—there are so many issues to sort through. But you’ve got to start somewhere. So before you write your memo, you put on your Madman hat and brainstorm a list of considerations: • Ownership • Maintenance • Buildout • Security • Offices vs. cubicles • Real-estate values—comparables?

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• The move—bids on movers? • Timing • Tax consequences • Employee and visitor parking • Environmental inspection and related issues • Smooth transitioning: phone and Internet service, mail forwarding, new stationery, updating business contacts, subscriptions, etc. • Insurance • Leaving current landlord on good terms • Taking signage to new location? These are just topics, not fully formed thoughts. But now that you have a rough list, you can start the Architect phase of writing and categorize in threes.

Steve’s responsibilities (before acquisition): • Consider an environmental inspection to make sure that the building has no hidden issues. Our commercial realtor can help. • Check with our accountant to find out what tax consequences we might have depending on how we time the closing. • Ask the accountant and perhaps a tax lawyer whether Steve should own the property personally, whether the company should own it, or whether a

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newly formed entity (an LLC, for example) should own it. There may be liability issues.

My responsibilities (before acquisition): • Cost out insurance coverage. • Interview contractors for building out the space to our satisfaction. (Note to self: Confirm that we can roll the buildout into the mortgage.) • Cost out the annual bill for providing the kind of security we currently have.

My responsibilities (postacquisition): • Contract for maintenance (cleaning and trash services, lawn and parking-lot care). • Plan the move, with a smooth transition in operations (the physical move, mail forwarding, phone and Internet, new stationery, address updates, announcement to customers, moving signage, etc.). • Help Steve plan the architectural buildout to foster collaboration and use space efficiently. To come up with all this, put yourself in Steve’s place, imagining what you’d want your office manager to think of to help you do your job better. But it also takes a little legwork—for example, talking to people at firms that have recently changed locations or acquired buildings. Can’t find anyone like that through your network? Ask the commercial realtor to put you in touch with one or two of its clients.

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For each stage, we’ve listed the three big issues—at least what we think they are. Look how easy it is now to begin your Carpenter work (writing a useful memo to Steve):

Memo To: Steve Haskell From: Carol Sommers Re: The Prospective Purchase of 1242 Maple Avenue Date: April 12, 2012 As you requested, I’ve thought through the logistics of purchasing and moving into the Maple Avenue property. Here are my suggestions for each stage of the process. Now I’d like your approval to tackle the following tasks immediately because they’ll give us a more complete picture of how expensive the acquisition and move would be: • Cost out insurance coverage. • Interview contractors for building out the space to our satisfaction. (I’ve checked with the bank to see if we can roll the buildout into the mortgage, and we can.) • Cost out the annual bill for providing the kind of security we currently have. Preclosing If you decide to go forward with the purchase and your offer is accepted, I’ll take care of these items before we close on the loan: 23

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• Arrange for at least one thorough inspection of the building. • Work with our accountant, to the extent you’d like, to get papers in order for obtaining the bank financing you mentioned. • Ensure that all due-diligence deadlines are met. After Closing After closing, I’ll get into the nuts and bolts of the move: • Help you plan the architectural buildout to foster collaboration and use space efficiently. • Plan the move, with a smooth transition in operations (the physical move, mail forwarding, phone and Internet, new stationery, address updates, announcement to customers, moving signage, etc.). • Contract for maintenance (cleaning and trash services, lawn and parking-lot care). Issues for You to Think About While I’m attending to the details above, you might want to: • Consider environmental and structural inspections to make sure the building has no hidden issues. Our commercial realtor says he can provide guidance—I’d be happy to set up a meeting if you like. • Check with our accountant to find out what tax consequences we might have depending on how we time the closing. • Ask the accountant and perhaps a tax lawyer whether you should own the property person24

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ally (highly unlikely), whether Haskell Company should own it, or whether a newly formed entity (such as an LLC) should own it. You or the company may face liability issues with outright ownership. Of course, I’m always on hand to take on whatever tasks you need. Just let me know. Prewriting in threes resulted in a clear, useful memo. It helped us forestall writer’s block, organize the material, and make concise, well-reasoned recommendations. But did you notice that the finished memo breaks things down into four categories, not three? As hard as I tried to think of everything before writing the memo, I couldn’t. Looking at my preliminary list, I identified a gap in time—a period in which there would be other necessary tasks. So I added the preclosing category and wrote those items on the fly. But I probably wouldn’t have come up with them if I hadn’t started with a plan. Organizing my main points in sets of three helped me see the preclosing gap; after that, filling it in wasn’t difficult. The order of categories changed, too. Why move Steve’s tasks from the beginning to the end? The memo was about what you, Carol Sommers, the office manager, could do for Steve. To think of your responsibilities, you needed to think of Steve’s. That was your starting point for brainstorming—but not for your memo. You couldn’t very well lead by telling your boss what he needs to do. That’s not your place, and that’s not what he asked for. So Steve’s to-dos can go at the end, as helpful reminders. That way, you can focus his attention mainly on items you’ll take care of to make his decisions easier. 25

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Recap • Find your focus by first generating a list of topics to cover. • Develop these raw ideas into full sentences and categorize your main points in sets of three. • Arrange these sets in a logical order, keeping your reader’s needs in mind.

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Chapter 5

Write in full—rapidly Once you’ve written your three main points so that you know where you’re going, you’re in Carpenter mode— ready to put together the ideas you’ve generated and organized. Write as quickly as possible. Your sentences will be shorter than they otherwise would be, your idioms will be more natural, and your draft should start taking shape before you know it. If there’s a painful part of writing, it’s doing the first draft. When you shorten the duration, it’s not as painful.

Time yourself To prevent premature fussing, write against the clock. (Creative writers call this speed writing. They often use it as an exercise to get juices flowing.) Allow yourself 5 or 10 minutes to draft each section—the opener, the body, and the closer—and set the timer on your computer or phone to keep yourself honest.

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Don’t edit as you go It’s counterproductive to allow the Judge and the Carpenter to work side by side. That’s essentially multitasking—you’re just doing two things inefficiently rather than simultaneously. And besides, the editorial part of the brain is simply incompatible with the production part. Who needs a fault-finding critic’s kibitzing when you’re trying to create something new and fresh? You’re best off keeping the Judge away as you produce your first draft. You’ll spend plenty of time editing later.

Don’t wait for inspiration Inspiration rarely comes when you want it to. After the careful planning you’ve done, you won’t need it anyway. As the management expert Peter Drucker famously said about innovation, good writing takes careful, conscious work, not a “flash of genius.” If you follow the MACJ process, you’ll inspire yourself—and minimize your procrastinating. Once the Madman and the Architect have worked, you should be primed to write. Schedule the time when the Carpenter is to begin, and when the appointed time comes, get started. Begin by writing in support of what you’re most comfortable addressing. When you get stuck, skip to something else. You need to get into a flow. If you’re still struggling when you come back to that problem passage, say out loud (to yourself or to a colleague) what you’re trying to convey. Sometimes speaking will help you find the right words. The point is to get your ideas on paper—knowing

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that you’ll still have time to elaborate and perfect them at the next stage.

Recap • Write your first draft as quickly as you can. • Don’t get stuck waiting for inspiration. Try giving yourself 5 to 10 minutes for each section when drafting. • Resist the urge to perfect as you write. Saving the editing until the draft is finished will keep the Judge from getting in your way. • Schedule a time for the Carpenter to work—and when that time comes, begin. • If you find yourself stumped, move on to a different section you’re more comfortable with and come back to the problem once you’ve found your flow.

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Chapter 6

Improve what you’ve written Once you’ve written a complete draft, you’ll revise first and then edit. Revising is a reconsideration of what you’re saying as a whole, and where you’re saying it. It’s rethinking the floor plan. Editing is more a matter of fine-tuning sentences and paragraphs. You need to allow time for both. On the one hand, don’t let some neurotic obsession with perfectionism delay important projects. On the other hand, don’t rashly send things out without proper vetting and improvement.

Revising As a reviser, you’re asking several questions: • Have I been utterly truthful? • Have I said all that I need to say? • Have I been appropriately diplomatic and fair?

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• Do I have three parts to the piece—an opener, a middle, and a closer? • In my opener, have I made my points quickly and clearly? And concretely? • Have I avoided a slow wind-up that unnecessarily postpones the message? • In the middle, have I proved my points with specifics? • Is the structure immediately apparent to my readers? Have I used informative headings? • Is my closer consistent with the rest—yet expressed freshly? Have I avoided lame repetition?

Editing When it comes to editing, you’re asking different questions as you read through your sentences and paragraphs: • Can I save some words here? • Is there a better way of phrasing this idea? • Is my meaning unmistakable? • Can I make it more interesting? • Is the expression relaxed but refined? • Does one sentence glide into the next, without discontinuities?

An example of revising and editing To understand the process more concretely, let’s take a look at how an internal memo takes shape through three 32

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drafts. The first draft is not very clear and omits important information, but the germ of an idea is there:

First Draft To: All Sales Personnel From: Chris Hedron Subject: Changes in Order-Processing Procedure In order to facilitate the customers’ placement of orders, a new order-processing procedure has been designed. The process will require a customer to enter the product and/or service code into our order-entry system, which will then generate a quote for the job and return it to the customer for approval. This will make time for the customer to review the quote and transmit any changes before work begins. Upon receipt of the customer’s written approval, the quote will be transformed into a work order. This procedure will make it easier and faster for us to process customers’ orders. This memo needs some amplification, especially in the realms of who, what, why, and when. The second draft, a full-fledged revision, fleshes out much that was unclear about the first draft.

Second Draft To: All Sales Personnel From: Chris Hedron Subject: New Work-Order-Processing Procedure Because our current work-order-processing procedure requires a lot of paperwork and phone calls, it’s difficult for customers to make changes prior to the 33

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commencement of work. The procedure is inefficient and subject to numerous errors. And it takes up to four weeks from quote to approval to work order. So we have designed a new four-step order-processing procedure that will allow customers to place orders through our website and allow us to begin jobs faster. Beginning in January 2013, we will inform our customers about the new procedure, and on April 20, 2013, we will implement the new procedure, which will work as follows. First, to initiate or change a work order, customers can visit our website to request a quote by filling out a detailed form and providing a purchaseorder number. Second, we will transmit a quote to the customer for approval. Third, if the customer approves, they can return the quote with an electronic signature and purchase-order number. Fourth, we will transform the quote to a work order immediately. Work-order changes can be made using the same procedure except that instead of a quote, customers will request a workorder change. The focus there was on saying all that needed to be said—not on refining the expression. Now, though, it’s possible to engage in fine-tuning and to produce a muchimproved draft.

Third Draft To: All Sales Personnel From: Chris Hedron Subject: New Work-Order-Processing Procedure Our current work-order processing takes a lot of paperwork and phone calls, so it’s hard for our customers to 34

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make changes to the work before it begins. The procedure is inefficient and subject to error. And it takes up to four weeks from quote to approval to work order. We have therefore designed a new four-step procedure that has two key benefits: (1) Customers can place orders through our website, and (2) we can start jobs faster. Beginning January 2013, we’ll tell our customers about the new procedure. On April 20, 2013, we’ll implement it. The new procedure will work in four steps: • Customers can visit our website to request a quote for a job by filling out a form and providing a purchase-order number. • We’ll then send a quote for the customer’s approval. • The customer can return the approved quote with a digital signature. • We’ll instantly convert the quote to a work order. Work-order changes can be made using the same procedure except that instead of a quote, customers will request a work-order change.

Recap • Allow yourself ample time to revise and edit your work. • Consider your draft in its entirety. Take a fresh look at your content and structure: Have you said everything you need to—and in the most effective way? • Then edit your work, fine-tuning to tighten, sharpen, and refine your prose. 35

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Chapter 7

Use graphics to illustrate and clarify When you’re writing about complex ideas, for example, or looking for useful ways to break up a long stretch of text, you can use a simple, elegant chart to convey critical information at a glance. Such graphics especially serve people who want to skim what you’ve written. A few crucial principles: • Make sure your graphics illustrate something discussed in the text. • Place them near the text they illustrate, preferably on the same page or on a facing page. • Use legends and keys that readers can easily grasp. To learn how to produce effective graphics, consult the books of Edward Tufte, especially Envisioning 37

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Information and Beautiful Evidence. You’ll marvel at the amount of learning and the sophisticated thought that lie behind superb visuals. It would be gross negligence to leave off without a graphic, so here’s one to round out the section. Note that when you flip through this book, your eye stops here. That’s because any departure from the norm achieves a special emphasis. If every third or fourth page had such a

FIGURE 7-1

The Who-Why-What-When-How Chart

Who are you writing for?

Key point: Consider your audience’s concerns, motivations, and background.

Why are you writing?

Key point: Keep your purpose firmly in mind. Every sentence should advance it.

What needs saying?

Key point: Include only the main points and details that will get your message across.

When are you expecting actions to be taken?

How will your communication benefit your readers?

Key point: State your time frame.

Key point: Make it clear to readers how you’re meeting their needs.

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chart, the effect would be nullified. So make your graphics distinctive—and don’t overuse them.

Recap • Distill your report (or part of it) into a chart, diagram, or other visual aid that helps your audience understand the content and its import. • Take your design cues from visuals you have found effective. • Read the books of Edward Tufte to develop this skill.

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Section 2

Developing Your Skills

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Chapter 8

Be relentlessly clear Clarity can be a double-edged sword. When you’re forthright enough to take a position or recommend a course of action, you’re sticking your neck out. People who don’t want to commit make their writing muddy. Perhaps they’re trying to leave room for their views to evolve as events unfold. Or perhaps they’re hoping they can later claim credit for good results and deny responsibility for bad ones. The fact is, though, that many readers will perceive them not as savvy wait-and-see participants but as spineless herd-followers who are slow to see (much less seize) opportunities within their reach. So clean up the mud.

Adopt the reader’s perspective Always judge clarity from the reader’s standpoint—not your own. Try showing a draft to colleagues with fresh eyes and asking them what they think your main points are. If they can’t do that accurately, then you’re not being clear enough. 43

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Developing Your Skills

Your ideal should be to write so unmistakably that your readers can’t possibly misunderstand or misinterpret. Anything that requires undue effort from them won’t be read with full attention—and is bound to be misunderstood.

Keep your language simple Simplicity breeds clarity. Strive to use short words and sentences. Over the years, research has confirmed again and again that the optimal average for readable sentences is no more than 20 words. You’ll need variety to hold interest—some very short sentences and some longer ones—but aim for an average of 20 words. With every sentence, ask yourself whether you can say it more briefly. NOT THIS:

BUT THIS:

Efficiency measures that have been implemented by the company with strong involvement of senior management have generated cost savings while at the very same time assisting in the building of a culture that is centered around the value of efficiency. We anticipate that, given this excising of unnecessary expenditures and enhanced control of other expenditures, the overall profitability of the company will be increased in the near term of up to four quarters.

Our senior management team has cut costs and made the company more efficient. We expect to be more profitable for the next four quarters.

If you’re writing about technical matters for an audience of nonspecialists—for example, explaining the benefits of a software upgrade to end users or putting together an investment primer for your company’s 401(k) participants—don’t try to define each term in the sen44

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tence where it first appears. That will bulk up your sentences and make the material even harder for people to grasp. Sometimes you’ll need a new sentence or even a new paragraph to explain a term or concept in simple, straightforward English.

Show, don’t tell You probably heard writing teachers in school say, “Show, don’t tell.” It’s excellent advice no matter what you’re writing—even business documents. The point is to be specific enough that you lead your readers to draw their own conclusions (conclusions that match yours, of course), as opposed to simply expressing your opinions without support and hoping people will buy them. Consider these examples: NOT THIS:

BUT THIS:

He was a bad boss.

He got a promotion based on his assistant’s detailed reports, but then—despite the company’s record profits— denied that assistant even routine cost-of-living raises.

The company lost its focus and floundered.

The CEO acquired five unrelated subsidiaries—as far afield as a paper company and a retailer of children’s toys—and then couldn’t service the $26 million in debt.

The shares of OJM stock issued to Pantheon stockholders in the merger will constitute a significant proportion of the outstanding stock of OJM after the merger. Based on this significant proportion, it is expected that OJM will issue millions of OJM shares to Pantheon stockholders in the merger.

We expect that OJM will issue about 320 million shares of its stock to Pantheon shareholders in the merger. That figure will account for about 42% of OJM’s outstanding stock after the merger.

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Developing Your Skills

WRITE LETTERS TO SHARPEN YOUR SKILLS Your letter writing is the best barometer of your writing skills generally. And it’s a safe way to practice—to prepare yourself for your more difficult writing tasks. Write thank-you letters, congratulatory letters, letters of recommendation (when asked), complaint letters, letters to the editor, personal notes (handwritten), and all sorts of others. If you can write good letters, you can write just about anything. (See chapter 19, “Business Letters,” for pointers on how.) That’s because they help you to focus on others. When you write a letter, you’re connecting with one particular recipient. And letters help you build goodwill with people. An e-mail message may create an impression, but it’s far less likely to be remembered than a personal letter is. To develop the habit, try writing a few letters a week. Make many of them handwritten notes. (When you receive one in a stack of mail, isn’t that the first thing that grabs your attention?) They’re personal and, if well done, memorable and even savable. They’ll help you build and maintain relationships. Write them to tell those you supervise how much you appreciate their hard work, congratulate colleagues on promotions, motivate team members to meet goals, let new partners know you’re eager to start collaborating, and so on. To write a good one, keep it neat, try limiting it to one page, make it warm and friendly, use you more than I, and use tasteful, mature stationery.

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A short, vague sentence (like “He was a bad boss”) may register in the readers’ minds—but only as a personal impression that’s potentially biased. It’s credible only if its source is highly credible. As for the long, vague sentence about OJM stock, there’s nothing for readers to hold on to, and they’ll get tired trying. Concrete business writing is persuasive because it’s evidence-based, clear, and memorable. When you supply meaningful, objective details (explaining, for example, that the floundering company “couldn’t service the $26 million in debt”), you’re sharing information, not just your opinion that the company “lost its focus.” You earn credibility by demonstrating a command of the facts. You also give your message staying power. People don’t care about—or even remember—abstractions the way they do specifics. So if you’re marketing your firm’s consulting services to potential clients, don’t just tell them you’ll save them money. Say how much money you’ve saved others. Don’t just promise that you’ll make their lives easier. List the time-consuming tasks you’ll take off their hands. Don’t just claim to have deep experience in the health care industry. Name names: Mention several hospitals and medical centers you’ve done work for, and include testimonials saying how happy clients are with the time and money you’ve saved them.

Recap • Put yourself in the reader’s shoes to assess your clarity. Better yet, see whether a colleague can accurately summarize the main points of your draft from a quick read-through.

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• Phrase your ideas as plainly and briefly as possible, aiming for an average sentence length of 20 or fewer words. • Pave your readers’ way with concrete details. Don’t try to push them there with abstract assertions. • Cultivate your letter writing to improve your writing skills more generally.

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Chapter 9

Learn to summarize— accurately A good summary is focused and specific—and it’s at the beginning of your document so readers don’t have to dig. It gets to the point. It lays the foundation for what’s to follow. There’s no holding back on the crucial information. Consider the difference between these two openers to a recommendation that a proposal be rejected: NOT THIS: Summary The cell phone changeover that has been proposed should be rejected. For the reasons stated below, the company would not be well served by accepting the proposal.

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BUT THIS: Summary Last year, we adopted an officewide policy of issuing cell phones to all executives and sales reps at an annual cost of $58,000 (including voice and data plans). The Persephone company has proposed that we switch to its phones and service at an annual cost of $37,000. The committee charged with evaluating this proposal recommends that we reject it for four reasons: 1. The new plans would have significantly less coverage in Europe and Asia, so our international sales reps might suffer lost opportunities. 2. Our current provider has been highly responsive and has tailored its service to our needs. 3. The $21,000 savings is dwarfed by potential costs (even one dropped sales call could result in a loss of much more money than that). 4. Persephone’s customer service appears from credible online reviews to be inferior.

What makes the second version better? It can be fully understood by anyone who reads it—at any time. The first version, by contrast, assumes familiarity: It’s clear to only a few “insiders”—and for only a limited period. And because it’s vague, it lacks the credibility that the second version earns through specifics. Struggling to incorporate the right amount of detail to make your summary clear and useful? Write a descriptive outline of your document—summarize each paragraph or section with a sentence that captures the who, what, when, where, why, and how—and try creating your overall summary out of that. Also, keep your readers’ needs foremost in your mind. What questions will people have when they open your document? Provide brief but concrete answers to those questions. These will assure readers that what follows will matter to them.

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Be brief—but not too brief People often assume that shorter is better when it comes to summaries. But brevity without substance is worthless. Never say more than the occasion demands—but never say less, either. Adopt the reader’s perspective: Fill in as much information as it takes to get people up to speed. Think of your summary as the CliffsNotes version of your document. Although the second example is longer, it conveys the whole gist of the message. And there’s not one wasted word, which brings us to our next chapter.

Recap • Summarize the vital information at the beginning of the document. • Summarize each section with a sentence that addresses “the five Ws” (who, what, when, where, why) and how—and use these sentences to build your general summary. • Provide only the information the reader needs to understand the issue—no more and no less.

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Chapter 10

Waste no words Make every word count. When you mean before, don’t say or write prior to, much less prior to the time when. Though prior to is a linguistic choice that the dictionary offers us, it’s a bad choice. Never use two words for one, three words for two, and so on. Syllables add up fast and slow people down. Of course, stick to idiomatic English. Don’t start dropping articles (a, an, the) where we’d all normally expect them. And don’t cut the important word that left and right—more often than not, you really need it to be clear. But remove all the words that aren’t performing a real function. Doing so saves readers time and effort and makes your ideas easier to grasp and apply. Wordiness can exist on many levels, from rambling statements to unnecessary repetition to verbose expressions that could be replaced by shorter, sharper alternatives. Whatever the manifestation, it’s bad. Consider the following examples:

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NOT THIS:

BUT THIS:

The trend in the industry is toward self-generation by some companies of their own websites, and Internet technology is changing the nature of training necessary to acquire the skill of website development at an acceptable level of sophistication, so that this activity can more and more be handled in-house. [49 words]

Since Internet technology makes it easier than ever to develop sophisticated websites, some companies now develop their own in-house. [19 words]

We are unable to fill your order at this point in time because there is an ongoing dock strike that affects our operations. [23 words]

We cannot fill your order right now because of the dock strike. [12 words]

I am writing in response to a number of issues that have arisen with regard to the recent announcement that there will be an increase in the charge for the use of our lobby computers. [35 words]

You may have heard that we’re raising the fees for using our lobby computers. [14 words]

The greater number of these problems can readily be dealt with in such a way as to bring about satisfactory solutions. [21 words]

Most of these problems can be readily solved. [8 words]

To trim extra words from your documents, try: • Deleting every preposition that you can, especially of: change April of 2013 to April 2013 and point of view to viewpoint.

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• Replacing every –ion word with a verb if you can. Change was in violation of to violated and provided protection to to protected. • Replacing is, are, was, and were with stronger verbs where you can. Change was hanging to hung and is indicative of to indicates. You’ll see all three tricks at work here: NOT THIS:

BUT THIS:

The manufacturers of tools for gardening have been the victims of a compression factor that has resulted in an increase in units on the market accompanied by a negative disproportionate rise of prices. [36 words]

The garden-tool industry has suffered from an oversupply of units coupled with rising prices. [14 words]

For the near and intermediate future in terms of growth goals, Bromodrotics, Inc., is evaluating its corporate design needs. The purpose of this short-term and intermediate-term evaluation is to make a determination as to how the image of the company might best be positioned to be of assistance to the sales force in meeting its growth goals. [57 words]

To increase sales, Bromodrotics needs to improve its image. [9 words]

Ruthlessly cut words from your first draft, so long as you remain faithful to the sounds and rhythms of normal, down-to-earth English. Don’t compress words to the point of sounding curt or unnatural.

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One other trick in that last example: eliminating padding such as in terms of and the purpose of. Sometimes you’ll find even worse phrases: in this connection it might be observed that it is important to bear in mind that it is interesting that it is notable that it is worthwhile to note that it should be pointed out that it will be remembered that Leave all these things unsaid—without saying it goes without saying that . . . .

Recap • Never use more words than necessary: If you can say it in two words instead of three, do so—as long as the result still sounds natural. • Tighten your prose by removing inessential prepositions, replacing abstract –ion nouns with action verbs where possible, and replacing wordy be-verb phrases with more direct simple verbs. • Eliminate padding that doesn’t contribute to your meaning.

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Chapter 11

Be plain-spoken: Avoid bizspeak It’s mission-critical to be plain-spoken, whether you’re trying to be best-of-breed at outside-the-box thinking or simply incentivizing colleagues to achieve a paradigm shift in core-performance value-adds. Leading-edge leveraging of your plain-English skill set will ensure that your actionable items synergize future-proof assets with your global-knowledge repository. Just kidding. Seriously, though, it’s important to write plainly. You want to sound like a person, not an institution. But it’s hard to do, especially if you work with people who are addicted to buzzwords. It takes a lot of practice. Back when journalists were somewhat more fastidious with the language than they are today, newspaper editors often kept an “index expurgatorius”: a roster of words and phrases that under no circumstances (except perhaps in a damning quote) would find their way into print. Here’s such a list for the business writer. Of course,

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Developing Your Skills

it’s just a starting point—add to it as you come across other examples of bizspeak that hinder communication by substituting clichés for actual thought.

Bizspeak Blacklist actionable (apart from legal action) agreeance as per at the end of the day back of the envelope bandwidth (outside electronics) bring our A game client-centered come-to-Jesus core competency CYA drill down ducks in a row forward initiative going forward go rogue guesstimate

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harvesting efficiencies hit the ground running impact (as verb) incent incentivize impactful kick the can down the road Let’s do lunch. Let’s take this offline. level the playing field leverage (as verb) liaise mission-critical monetize net-net on the same page operationalize optimize out of pocket (except in reference to expenses) paradigm shift parameters

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per planful pursuant to push the envelope putting lipstick on a pig recontextualize repurpose rightsized sacred cow scalable seamless integration seismic shift (outside earthquake references) smartsized strategic alliance strategic dynamism synergize; synergy think outside the box throw it against the wall and see if it sticks throw under the bus turnkey

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under the radar utilization; utilize value-added verbage (the correct term is verbiage—in reference only to verbose phrasings) where the rubber meets the road win-win These phrases have become voguish in business—abstain if you can. Sometimes people use them to enhance their own sense of belonging or to sound “in the know.” Or they’ve been taught that good writing is hyperformal, so they stiffen up when they use a keyboard or pick up a pen, and they pile on the clichés. It takes experience to bring your written voice into line with your spoken voice and to polish it so well that no one notices the polish. NOT THIS:

BUT THIS:

The reduction in monthly assessments which will occur beginning next month has been made financially feasible as a result of leveraging our substantial reductions in expenditures.

We’ll be cutting your assessments beginning next month because we’ve saved on expenses.

It is to be noted that a considerable amount of savings has been made possible by reason of our planful initiation of more efficient and effective purchasing procedures.

We’ve saved considerable sums by streamlining our purchases.

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Hunt for offending phrases Start looking for bizspeak in all kinds of documents, from memos to marketing plans, and you’ll find it everywhere. You’ll eventually learn to spot it—and avoid it—in your own writing. You’ll omit canned language such as Attached please find and other phrases that only clutter your message. Bizspeak may seem like a convenient shorthand, but it suggests to readers that you’re on autopilot, thoughtlessly using boilerplate phrases that people have heard over and over. Brief, readable documents, by contrast, show care and thought. Attached please find is just one example among many: NOT THIS:

BUT THIS:

at your earliest convenience

as soon as you can

in light of the fact that

because

we are in receipt of

we’ve received

as per our telephone conversation on today’s date

as we discussed this morning

Pursuant to your instructions, I met with Roger Smith today regarding the above-mentioned.

As you asked, I met with Roger Smith today.

Please be advised that the deadline for the abovementioned competition is Monday, April 2, 2012.

The deadline is April 2, 2012.

Thank you for your courtesy and cooperation regarding this matter.

Thank you.

Thank you in advance for your courtesy and cooperation in this regard. Please do not hesitate to contact me if you have any questions regarding this request.

Thank you. If you have any questions, please call.

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Writing plainly means expressing ideas as straightforwardly as you can—without sacrificing meaning or tone. Take Warren Buffett again, one of the smartest business leaders on the planet—and someone, by the way, who cares a lot about good business writing. Consider how he rewrote a short passage that he found in a financialservices firm’s business prospectus. Read through the first excerpt before you read Buffett’s translation below it, and note the bizspeak phrases that landed on the cuttingroom floor as Buffett tightened and translated: NOT THIS: Maturity and duration management decisions are made in the context of an intermediate maturity orientation. The maturity structure of the portfolio is adjusted in the anticipation of cyclical interest-rate changes. Such adjustments are not made in an effort to capture short-term, day-to-day movements in the market, but instead are implemented in anticipation of longer-term, secular shifts in the interest rates (i.e., shifts transcending and/or not inherent to the business cycle). Adjustments made to shorten portfolio maturity and duration are made to limit capital losses during periods when interest rates are expected to rise. Conversely, adjustments made to lengthen maturation for the portfolio’s maturity and duration strategy lies in the analysis of the U.S. and global economies, focusing on levels of real interest rates, monetary and fiscal policy actions, and cyclical indicators. Words: 136 Sentences: 5 (All passive voice) Average sentence length: 27.2 Flesch Reading Ease: 8.2

BUT THIS: We will try to profit by correctly predicting future interest rates. When we have no strong opinion, we will generally hold intermediate-term bonds. But when we expect a major and sustained increase in rates, we will concentrate on short-term

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issues. And conversely, if we expect a major shift to lower rates, we will buy long bonds. We will focus on the big picture and won’t make moves based on short-term considerations. Words: 74 Sentences: 5 (None passive voice) Average sentence length: 14.8 Flesch Reading Ease: 60.1

If you analyze the before-and-after prospectuses under the Flesch Reading Ease (FRE) scale—a test developed by readability expert Rudolf Flesch to measure the comprehensibility of written passages using word and sentence length—you can quantify the difference. The higher the score, the easier the passage is to read and comprehend. On a scale of 0–100, the original 136-word prospectus on top scores an 8.2. In contrast, Warren Buffett’s revision below it scores a 60.1. To give some perspective, Reader’s Digest scores 65 on the FRE scale, Time magazine around 52, and the Harvard Law Review in the low 30s. Increasing a passage’s readability is not the same as “dumbing it down.” The revised passage above gives the reader the same information—but more clearly. Here’s a shorter example, this time from a community college’s mission statement: NOT THIS: The object of this enterprise is to facilitate the development of greater capacities for community colleges and not-for-profit neighborhood organizations to engage in heightened collaboration in regard to the provision of community services that would maximize the available resources from a number of community stakeholders and to provide a greater level of communication about local prioritization of educational needs with the particular community. [63 words]

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BUT THIS: This project seeks to help community colleges and nonprofit neighborhood groups work more efficiently together. [15 words]

In both the Buffett example and the community-college example, the original versions seem to be aiming at something other than getting the point across. Perhaps the writers wanted to sound impressive, or wanted to obscure what they were actually up to, or wanted to cover up the fact that they weren’t entirely sure what they were up to. Whatever the answer, the original styles won’t work on any target audience.

Recap • Aim to write as naturally as you speak: Sound like a human being, not a corporation. • Avoid boilerplate phrases that weigh down your language and suggest lazy thinking. • Increase readability by expressing your ideas as directly as possible.

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Chapter 12

Use chronology when giving a factual account Stories are inherently chronological. One thing happens, then another, then another. That structure works well not only in books and films but also in business writing. It’s more likely to be clear and efficient, and to keep readers interested. So include “just the facts, ma’am,” as Joe Friday on the old TV series Dragnet used to say. Just the facts that matter, and in the right order. In theory this point seems obvious, but in practice writers find storytelling difficult. They often dive straight into the middle without orienting their readers, and the inevitable result is confusion on the receiving end. You’re familiar with this phenomenon. It happens all the time in conversations with friends or family members: “Wait a minute. Back up. When was this? Where were you? And why were you talking to this guy? And where’d he come from?” 67

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Suppose you’re sending an e-mail message to give the status of an ongoing project, and it’s been some time since the last update. The recipient isn’t as immersed in the project as you are and probably has many other things going on. So remind your reader where things stood when you last communicated about the subject, and describe what’s happened since then: NOT THIS:

BUT THIS:

Sarah—

Sarah—

It was hard making headway with Jim Martinez, but finally we’re looking (in the best-case scenario) at a demonstration of what our software can do by mid-May, as I established in my first telephone conference with Jim last Monday at 9:00 a.m. He was out Wednesday and Thursday (I didn’t see any reason to try calling on Tuesday), but on Friday he told me that we’d need a sample app. But prior to that, Magnabilify requires an NDA. Tuesday’s meeting should clarify things. Let me know what you think. Frank

Last week you asked me to approach Magnabilify Corporation, the software developers, to see whether they might have any interest in our customizing some security applications for their computer systems. I finally got through to Jim Martinez, corporate vice president in charge of software, and we have planned a face-to-face meeting at his office next Tuesday. The next steps, as I understand them under Magnabilify’s protocol, will be to enter into a nondisclosure agreement, to develop a sample application (in less than two weeks), and to schedule a demonstration shortly after. Can you and I chat before Tuesday’s meeting? Frank

The version on the left reads like stream-of-consciousness. The writer didn’t take the time to step back, think of the message from the reader’s perspective, and then lay out the important points chronologically. A story, even a short one like the narrative on the right, holds the

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reader’s interest more effectively than jumbled facts interspersed with opinions.

Plot out what happened, and when When a serious dispute arises within a company, the lawyers will typically ask their clients to produce a “chronology of relevant events,” detailing the most important incidents leading up to the dispute. This document helps everyone involved think more clearly about how things unfolded. Try taking a similar approach when writing a document that walks the reader through a series of events—whether you’re sending someone a project update or preparing an employee’s performance evaluation. Create a chronology of relevant events to organize the narrative. Say you did that before drafting your e-mail message to Sarah in the right-hand example. Here’s how it might look:

Chronology of relevant events Last week

Today Next Tuesday In two weeks

Sarah asked me to gauge Magnabilify’s interest in having us build customized security applications. I spoke with Jim Martinez. Jim and I will meet at his office to discuss. If Magnabilify is interested, we’ll do an NDA, develop a sample app, and schedule a demo.

Once you’ve laid out the chronology like this, drafting the e-mail message becomes a lot easier—just a matter of stringing the events together and asking to meet with Sarah before next Tuesday’s meeting.

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Recap • Include only the relevant facts. • Provide them in chronological order to make it easy for your readers to follow you. • Organize your narrative by creating a chronology of relevant events before you write; then string the events together in your draft. But avoid the rote recitation of unnecessary dates.

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Chapter 13

Be a stickler for continuity Smooth writing consists of a sequence of well-joined sentences and paragraphs, not a mere collection of them. This smooth sequencing requires good planning and skill in handling transitions, or links that help readers follow your train of thought. Watch how a good writer on business ethics, Manuel G. Velasquez, does it with a series of paragraph openers (the links are indicated here by italics): A Series of Paragraph Openers from Manuel G. Velasquez’s Business Ethics (2011)

1. How well does a free monopoly market succeed in achieving the moral values that characterize perfectly competitive free markets? Not well. 2. The most obvious failure of monopoly markets lies in the high prices they enable the 71

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monopolist to charge and the high profits they enable him to reap, a failure that violates capitalist justice. 3. A monopoly market also results in a decline in the efficiency with which it allocates and distributes goods. 4. First, the monopoly market allows resources to be used in ways that will produce shortages of those things buyers want and cause them to be sold at higher prices than necessary. 5. Second, monopoly markets do not encourage suppliers to use resources in ways that will minimize the resources consumed to produce a certain amount of a commodity. 6. Third, a monopoly market allows the seller to introduce price differentials that block consumers from putting together the most satisfying bundle of commodities they can purchase given the commodities available and the money they can spend. 7. Monopoly markets also embody restrictions on the negative rights that perfectly free markets respect. 8. A monopoly market, then, is one that deviates from the ideals of capitalist justice, economic utility, and negative rights. The italicized transitional phrases steer us from one idea to the next. Normally, we wouldn’t even notice them. The 72

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transitions in really good writing are almost subliminal— but they’re carefully placed where readers will need them. These connections take readers forward in different ways. They can: • Establish a time sequence: then, at that point, afterward, as soon as, at last, before, after, first, initially, meanwhile, later, next, now, once, originally, since, then, until, finally • Establish place: there, in that place, at the front, in back, farther back, in the rear, at the center, to the left (right), up front, way back • Add a point: and, or, further, also, in fact, moreover, not only . . . but also • Underscore a point: above all, after all, and so, chiefly, equally important, more so, indeed, more important • Concede a point: although, and yet, admittedly, at the same time, certainly, even though, doubtless, granted, no doubt, of course, still, though, to be sure, whereas, yet, while • Return to a point: even so, nevertheless, nonetheless, still • Give an example: for example, for instance, in particular • Provide a reason: because, hence, thus, for, it follows, since, so, then, therefore 73

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• Set up a contrast: but, yet, and yet, conversely, despite, by contrast, instead, on the other hand, still, then, while • Set up a conclusion: so, as a result, finally, in conclusion, in short, in sum, on the whole, therefore, thus, to sum up

Use subheads as transitions No matter how smooth your transitions are between sentences and paragraphs, time-pressed readers will zone out if you place a solid wall of text in front of them. Break up your documents (even e-mails that are longer than a paragraph) with some signposts to lead people from section to section and help them quickly locate the parts they’re particularly interested in. A “summary” subhead, for example, tells readers where to find just the highlights. And subheads that concisely yet clearly lay out your key points allow people to skim and still get the gist of your message. Make your subheads as consistent as you can. For instance, if you’re leading a task force that’s recommending ways to forge direct customer relationships through social media, you might write each subhead in your body text as a directive, along these lines: Use LinkedIn to Get Feedback on Current Products Use Facebook to Test New Concepts Use Twitter to Facilitate Chats About Live Events The parallelism will help your document hang together both rhetorically and logically. 74

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Recap • Use well-placed transitional phrases to guide the reader to your next idea and indicate its relationship to what came before. • Break up documents with concise, descriptive subheads to increase readability and help readers quickly locate the information most important to them. • Use a “summary” subhead to point your readers to the document’s highlights. • Use consistent style and parallel syntax in your subheads to reinforce the document’s logical and rhetorical cohesion.

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Chapter 14

Learn the basics of correct grammar Why nitpick about grammar? Because readers may see your language—especially your use of your native language—as a reflection of your competence. Make lots of mistakes and you’ll come across as uneducated and uninformed. People will hesitate to trust your recommendation to launch a resource-intensive project, for example, or to buy goods or services. They may think you don’t know what you’re talking about.

Telltale indicators Consider pronouns. If you don’t know how to handle I and me, many of your colleagues, partners, and customers won’t take you seriously. Some errors will predictably get you in trouble: • “She placed an order *with Megan and I.” (Correct: She placed an order with Megan and me.) • (On the phone:) “*This is him.” (Correct: This is he.) 77

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• “Just keep this matter *between you and I.” (Correct: Just keep this matter between you and me.) • “*Whom may I say is calling?” (Correct: Who may I say is calling?) The rule, very simply, is that I, we, he, and she are subjects of clauses ; me, us, him, and her are objects of either verbs or prepositions . In the compound phrasings, try leaving out Leslie and—and you’ll know the correct form immediately. Besides pronoun problems, here are the main types of grammatical errors to watch out for. As for dozens of other wording issues that can torpedo your credibility, see Appendixes D and F.

Subject–verb disagreement A verb must agree in person and number with its subject . But syntax can make things tricky. There is poses a problem because There appears to be the subject. It’s not. It’s what grammarians call an expletive—not a bad-word expletive (as in “expletive deleted”), but a word that stands in for the subject in an inverted sentence. In these sentences, there is just means “exists.” Take, for example, There is a vacancy on the hiring committee. The uninverted sentence would be A vacancy (exists) on the hiring committee. Because there seems to some people to resemble a singular subject, they tend to

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use a singular verb. But there inverts the word order, and the true subject follows the verb . And, of course, when the subject is plural, a plural verb is needed. NOT THIS:

BUT THIS:

There is always risk and liability considerations to take into account.

There are always risk and liability considerations to take into account.

There is many options to avoid a takeover.

There are many options to avoid a takeover.

Another troublesome area for subject–verb disagreement involves prepositional phrases that follow the subject. By “false attraction,” they often mislead writers to choose the wrong verb (singular for plural or vice versa). The object of a prepositional phrase is never the subject of a sentence. It may be nearer the verb, but the number of the subject controls the number of the verb: NOT THIS:

BUT THIS:

The details of the customized work is delaying the project.

The details of the customized work are delaying the project.

The source of our replacement parts and maintenance have not been selected yet.

The source for our replacement parts and maintenance supplies has not been selected yet.

In the first example, work is the object of the preposition of, so the plural subject details controls the verb. In the second, source takes the singular has not been selected. Disagreements can also arise with compound subjects connected by or, either . . . or, or neither . . . nor. If the subjects are all singular then the verb is singular as well. But 79

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when one or more are plural, the number of the verb must match the number of the noun that follows the or or nor: NOT THIS:

BUT THIS:

Special services or a new product target a niche market.

Special services or a new product targets a niche market.

Neither the education fund nor the training costs is without budget constraints.

Neither the education fund nor the training costs are without budget constraints.

In the first example, the singular subject a new product after the or mandates a singular verb. In the second example, the plural subject after nor makes the verb plural as well. Notice that it’s more idiomatic to use the singular subject or plural subject + plural verb form.

Noun–pronoun disagreement Strictly speaking, a pronoun must have the same gender and number as the subject. NOT THIS:

BUT THIS:

A shareholder may cast their vote for only one member of the board.

A shareholder may cast his or her vote for only one member of the board.

Although their is colloquially used as a genderless singular pronoun, this usage is not yet widely accepted in formal writing. And unless you know the sex of the subject, try to avoid using a masculine or feminine pronoun. If you wish to make a political statement with pronoun gender (by always choosing the generic feminine, for example), do so: Just know that some of your readers may be distracted by it or may discount your credibility. The

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safest course is to use some ingenuity to write in an invisibly gender-neutral way. NOT THIS:

BUT THIS:

Either the receptionist or the sales assistant will have to change their lunch hour so that at least one will be in the office at all times.

Either the receptionist or the sales assistant will have to start taking lunch earlier or later so that at least one will be in the office at all times.

Three candidates responded to the advertisement for the financial-officer position. Each submitted their résumé.

Three candidates responded to the advertisement for the financial-officer position. Each submitted a résumé.

But back to grammar. When the subject of a sentence is a singular pronoun such as either, neither, each, or every, other nouns that accompany it have no effect on the number of the verb: NOT THIS:

BUT THIS:

Have either of our clients arrived yet?

Has either of our clients arrived yet?

Neither of the new products have sold spectacularly this year.

Neither of the new products has sold spectacularly this year.

Each of us are responsible for the tasks assigned.

Each of us is responsible for the tasks assigned.

Double negatives A double negative occurs when back-to-back negatives are meant to intensify, not cancel, each other. It’s easy to recognize in dialect (for example, we didn’t have no choice or it didn’t hardly matter), but the problems can be more subtle in formal writing. Watch for the word not plus another word with a negative sense. 81

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NOT THIS:

BUT THIS:

We couldn’t scarcely manage to keep up with the demand.

We could scarcely manage to keep up with the demand.

Another subtle double-negative combination is not . . . but. NOT THIS:

BUT THIS:

The clerk couldn’t help but call the manager for advice.

The clerk couldn’t help calling the manager for advice.

But indicates a negative or contradiction, so not . . . but may be ambiguous. The first sentence could mean the clerk had some other option. The second sentence clearly states there was no alternative.

Nonstandard vocabulary In business writing, always use standard English—unless you’re writing specifically for a niche audience of nonstandard speakers. Broadly speaking, standard English is characterized by attention to accepted conventions for grammar, vocabulary, spelling, and punctuation. You needn’t always be strictly formal—in appropriate situations, use less formal English. But your prose and speech must always be professional and respectful. Dialect is always nonstandard. Avoid using it in business: NOT THIS:

BUT THIS:

Where’s the meeting at?

Where’s the meeting?

Me and Kim will handle the Brewster account.

Kim and I will handle the Brewster account.

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Nonstandard language may also creep in when writers rely on the spoken sounds of words: NOT THIS:

BUT THIS:

They shouldn’t of submitted those incomplete reports.

They shouldn’t have submitted those incomplete reports.

Irregular verbs are also fertile ground for nonstandard language. NOT THIS:

BUT THIS:

We drug our heels getting into the mid-Atlantic market.

We dragged our heels getting into the mid-Atlantic market.

Our late entry almost sunk our chances against established competitors.

Our late entry almost sank our chances against established competitors.

How to correct yourself Here are three good ways to brush up: (1) Read first-rate nonfiction; (2) have knowledgeable colleagues proof your material and explain their corrections; and (3) browse through guides on grammar and usage, consulting them whenever questions arise. This last method will help you distinguish between the real rules and the artificial ones that plague so much writing. For example, were you told in school never to begin a sentence with a conjunction? So was I. But look at all the ands and buts that begin sentences in first-rate prose. They’re everywhere. These words, as sentence-starters, keep readers going smoothly with the train of thought. They don’t break any real rules—and they never have. Grammatically, there’s nothing wrong with using additionally and however as sentence-starters. But

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stylistically, they’re inferior. The multisyllable connectors don’t join as cleanly and as tightly as monosyllables do. Do you worry that your readers will think a sentencestarting conjunction is wrong? They won’t even notice it, just as you never do. Good style gets readers focused on your clear, concise message. Bad style, by contrast, draws attention to itself. For a handy collection of grammar guidelines, see Appendix B, “A Dozen Grammatical Rules You Absolutely Need to Know.” And be sure to spend some quality time with Appendix F, “A Primer of Good Usage.” Fall in love with the language, and it will love you back.

Recap • When considering verb number, watch for compound subjects, inverted syntax, and prepositional phrases that follow the subject. • Never mistake the object of a preposition for the subject of a sentence. • Avoid using they/them/their as genderless singular pronouns in formal writing. • Avoid double negatives. • Follow the conventions of standard English. • Improve your grasp of standard English by reading quality nonfiction, having colleagues review your writing, and referring to grammar and usage guides when you have questions.

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Chapter 15

Get feedback on your drafts from colleagues Say you’ve drafted a budget request. Ask people on your team to read it and make sure you’ve explained clearly, concisely, and persuasively why you should receive the funding, for example, to hire two more staff members. And if possible, get constructive feedback from an objective peer in a different department—preferably someone who is good at lobbying for resources. Pay attention to what your colleagues say: Their reactions will probably be quite close to those of your intended readers.

Accept suggestions graciously A good writer welcomes good edits—yearns for them, in fact. A bad writer resents them, seeing them only as personal attacks. A good writer has many ideas and tends to value them cheaply. A bad writer has few ideas and 85

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values them too dearly. So share your material while it’s still rough—the feedback will help you make it shipshape much faster than if you were toiling in isolation. Try to avoid having your colleagues explain their edits in person. You may get defensive and have a hard time recognizing good advice. Invite them to mark up your document, and thank them for their help. If you have the people you supervise tightening and brightening your prose regularly, you’ll benefit in two ways: Your documents will be more polished, and the people you manage will, with practice, become better editors and writers. Give them direction, though: Ask them to look not just for outright errors but also for passages that are verbose, unclear, or awkwardly expressed. Ideally, you’ll get to the point where you’re accepting 80 percent of their suggestions.

Create a culture where editing flourishes At my company, everyone who edits or proofreads must suggest at least two changes per page. No one is allowed to hand something back—even a short letter—and say, “It looks good to me!” People can always make improvements by asking, “What did the writer not say that should have been said? How could the tone be improved? Isn’t there a better, shorter way of phrasing one of the ideas?” And so on. If each reader suggests at least two edits per page, your typos will get caught—believe me. Typos are generally the easiest things to catch, so readers will usually mark those before trying the more difficult task of suggesting stylistic improvements. In the end, awkwardness will disappear. You and your team will look better because you’ll 86

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perform better. You’ll make stronger, clearer arguments. You’ll put together more persuasive pitches. Does this seem like overkill? Consider that every communication you send is a commentary on your team or company and its level of professionalism. If it’s a printed brochure or a commercial e-mail with wide distribution, the more feedback the better. You simply cannot have too many sets of knowledgeable eyes review the copy. A dumb mistake can be disastrous—as a major university discovered after printing thousands of commencement brochures with “School of Pubic Affairs” in large type on the front cover. A photo of this embarrassing gaffe almost instantly popped up on the Internet, of course, and the university became the target of many jokes. When it comes to writing, you want a culture of unneurotic helpfulness. There’s no shame in needing edits from others. People should freely seek them and freely give them—without any unpleasant overtones of oneupmanship. Everyone in an organization, regardless of rank, can benefit from good editing.

Recap • Routinely ask your colleagues and those you supervise to read your drafts and suggest edits. • Have them mark up the document and submit their edits in writing, rather than explaining them in person, to avoid reacting defensively. Always thank them for their help. • Foster an environment where edits are freely sought and offered—without overtones of petty one-upmanship. 87

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Section 3

Avoiding the Quirks That Turn Readers Off

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Chapter 16

Don’t anesthetize your readers It seems obvious that you shouldn’t put your audience to sleep, doesn’t it? It should also be obvious to people who talk in circles at dinner parties or deliver dull lectures, but consider how many boring speakers you’ve had to listen to. It doesn’t have to be that way—whether in conversation or in writing. Ponder the best conversationalists and the best lecturers you’ve ever heard. No matter how obscure the topic, they make it fascinating through their technique. They avoid trite expressions. They use strong, simple words. Think of Winston Churchill’s famous phrase “blood, toil, tears, and sweat.” And remember what George Washington reputedly said when questioned about the fallen cherry tree: not “It was accomplished by utilizing a small sharp-edged implement,” but “I used my little hatchet.” Effective writers use the same techniques. Why do you read some books all the way through but set others aside?

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It’s their style: the way they explain things, the way they tell the story. Here are several tips for writing business documents that hold readers’ attention.

Use personal pronouns skillfully Don’t overuse I (try not to begin paragraphs or successive sentences with it), but do lean heavily on we, our, you, and your. Those are personal, friendly words that add human interest and pull readers into a document. Rudolf Flesch, a leading figure in plain-English circles and the author of How to Be Brief, was one of the first to explain the need for you:

Keep a running conversation with your reader. Use the second-person pronoun whenever you can. Translate everything into you language. This applies to citizens over 65 = if you’re over 65, this applies to you. It must be remembered that = you must remember. Many people don’t realize = perhaps you don’t realize. Always write directly to you, the person you’re trying to reach with your message.

Likewise, the words we and our—in reference to your firm or company—make corporations and other legal entities sound as if they have collective personalities (as they should and typically do). People usually appreciate this down-to-earth approach over the sterile, distancing effect of third-person prose. Compare the following examples:

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NOT THIS:

BUT THIS:

Whether or not a stockholder plans to attend a meeting, he or she should take the time to vote by completing and mailing the enclosed proxy card to the Company. If a stockholder signs, dates, and mails a proxy card without indicating how he or she wants to vote, that stockholder’s proxy will be counted as a vote in favor of the merger. If a stockholder fails to return a proxy card, the effect in most cases will be a vote against the merger.

Whether or not you plan to attend a meeting, please take the time to vote by completing and mailing the enclosed proxy card to us. If you sign, date, and mail your proxy card without indicating how you want to vote, your proxy will count as a vote in favor of the merger. If you don’t return your card, in most cases you’ll be counted as voting against the merger.

Use contractions Many writers have a morbid fear of contractions, having been taught in school to avoid them. But you won’t be breaking any real rules if you use them—and they counteract stuffiness, a major cause of poor writing. This doesn’t mean that you should become breezy or use much slang—just that it’s good to be relaxed. If you would say something as a contraction, then write it that way. If you wouldn’t, then don’t. NOT THIS:

BUT THIS:

For those customers who do not participate in West Bank’s online banking program, and do not wish to consider doing so, West Bank will continue sending them statements by U.S. Mail.

If you prefer not to use our online banking program, we’ll continue mailing your statements to you.

We would like to remind you that it is not necessary to be present to win. We will inform all winners by telephone subsequent to the drawing.

Remember: You needn’t be present to win the drawing. We’ll call you if you win.

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Stick to simple language I know I repeat this again and again—but it bears repeating. Readers who can’t follow you will stop trying.

Avoid passive voice Don’t say “The closing documents were prepared by Sue,” but instead “Sue prepared the closing documents”; not “The message was sent by George,” but either “George sent the message” or “The message came from George.” This guideline is hardly absolute—sometimes passive voice is the most natural way to say what you’re saying. Sometimes it can’t be avoided. (See?) But if you develop a strong habit of using active voice, you’ll largely prevent convoluted, backward-sounding sentences in your writing. How do you identify passive voice? Remember that it’s invariably a be-verb (typically is, are, was, were) or get, plus a past-tense verb. There are eight be-verbs and countless past participles.

Examples of Passive Voice is + delivered are + finished was + awarded were + praised been + adjusted being + flown 94

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Don’t anesthetize your readers

be + served am + relieved got + promoted You will improve your writing if you minimize passive voice. (Not: Your writing will be improved if passive voice is minimized by you.)

Vary the length and structure of your sentences Monotony, as Cicero once said, is in all things the mother of boredom. It’s true of syntax no less than it’s true of eating or anything else. Sameness cloys. So you want short sentences and long; main clauses and subordinate ones. You want variety. NOT THIS:

BUT THIS:

Over a significant period of time, we have gained experience helping our clients improve operational performance and maximize both the efficiency of their human resources and the economical utilization of their capital. Ours is an integrated approach that both diagnoses and streamlines operating practices and procedures using lean maintenance and optimization tools, while at the same time implementing change-management techniques involving mind-sets and behaviors of those involved in managerial positions within a given organization.

For many years, we have helped clients better use their resources and improve performance. How? By streamlining operations and changing managers’ mind-sets and behaviors.

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NOT THIS:

BUT THIS:

In order to provide you, the user of our products, the option of obtaining free replacements for defective products from the nearest office, we offer a simplified processing without acknowledgment of the statutory duty (“goodwill”) regardless of whether the product has been purchased there or has reached the user by another route.

What should you do if you need a free replacement for a defective product? Go to the nearest office. Any of our offices can help even if you did not purchase the item there.

Avoid alphabet soup Readers find acronyms tiresome, especially ones they’re not familiar with. So use them judiciously. It might be convenient to refer to COGS instead of spelling out “cost of goods sold.” If you also throw in acronyms such as ABC (“activity-based costing”), EBITDA (“earnings before interest, tax, depreciation, and amortization”), and VBM (“value-based management”), the accountants in your audience will follow you—but you’ll lose everyone else. Small wonder, too. People don’t want to master your arcane vocabulary to get what you’re saying. Surely you’ve had this experience as a reader: You encounter an acronym (a long one if you’re particularly unlucky) and can’t connect it with anything you’ve read in the article or document so far. You find yourself scanning backward through the text, hoping to find the first appearance of that acronym or words that might fit it. By the time you find it (or give up trying), you’ve completely lost the writer’s train of thought. Never put your own readers through that.

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Stick to words when you can. Acronyms make writing easier but reading harder. Your shortcut is the reader’s hindrance.

Recap • Don’t overuse I. Use we, our, you, and your instead to add a personal touch and appeal to your reader. • Avoid stuffiness by overcoming any fear you might have of contractions. • For clearer, more straightforward writing, prefer active voice—unless the passive in a particular context sounds more natural. • Vary the length and structure of your sentences. • Make the reader’s job easier by avoiding acronyms when you can.

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Chapter 17

Watch your tone Striking the right tone takes work—but it’s critical to the success of your business documents. If you sound likable and professional, people will want to work with you and respond to you. So adopt a relaxed tone, as if speaking directly to the recipient of your document.

Avoid hyperformality What do you think of colleagues who say or write “How may I be of assistance?” instead of “How may I help you?” Or “subsequent to our conversation” instead of “after we spoke”? When they choose overblown words over everyday equivalents, don’t they strike you as pompous? Too much formality will spoil your style. Keep your writing down to earth and achieve a personal touch by: • Writing your message more or less as you’d say it, but without all the casualisms (likes and you knows). • Including courtesies such as thank you, we’re happy to, and we appreciate.

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• Using the names of the people you’re writing about (David Green, not the above-mentioned patient). • Using personal pronouns (you, he, she—not the reader, the decedent, the applicant; we understand—not it is understood; we recommend—not it is recommended by the undersigned).

Be collegial You’ll have better luck delivering most kinds of messages, even tough ones, if you approach people collegially. Imagine that everything you write will be paraded before a jury in a contentious lawsuit. You’ll want that jury to think you’ve behaved admirably. Of course, sometimes you’ll need to take an aggressive stance—for example, when you’re at the last stage before litigation. But do this only as a last resort, and preferably on advice of counsel. Be yourself. Just be your most careful, circumspect self. People have gotten their companies into terrible trouble—and have lost their jobs—by writing ill-considered letters, memos, and e-mails. So always summon your best judgment. Even if you’re collegial and fairly relaxed, your language will vary somewhat depending on your relationship with the recipient. You’ll be okay if you ask yourself, “How would I say this to so-and-so if he were right here with me?” You don’t want a distant tone with your closest colleagues, and you don’t want a chummy tone with someone you don’t know all that well.

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Never try to make your readers admit that they’re in the wrong. It’s unwise to say that they labor under a delusion, or claim to understand, or fail to understand, or complain, or erroneously assert, or distort. These expressions, and others like them, breed ill will. Instead, treat your readers with integrity and fairness—and show your willingness to meet them halfway.

Drop the sarcasm Sarcasm expresses contempt and superiority. It doesn’t shame people into compliance. Rather, it’s a surefire way of irritating and alienating them. Compare: NOT THIS:

BUT THIS:

Given that Monday was a bank holiday, as declared by federal statute no less, your e-mail of the 17th of the present month did not come to my attention until yesterday. It is with no small degree of regret that we note that you deemed it necessary to send a follow-up e-mail to us regarding this matter, since we are desirous of establishing a relationship of mutual trust and respect.

Because Monday was a bank holiday, I didn’t receive your e-mail message of the 17th until yesterday. Naturally I was chagrined that you had to write a second time. But of course I want you to call on me whenever I might help.

In the left-hand column, note the deadly combination of hyperformality and sarcasm, and the annoying subtext: “You wrote on a holiday, you DOPE. Of course you had to wait for a response.” The chance of “establishing a relationship of mutual trust and respect” is very likely diminished.

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Recap • Arrive at a relaxed but professional tone by writing your message as if you were speaking to the recipient in person. • Refer to people by name, use personal pronouns as you naturally would, and shun fancy substitutes for everyday words. • Always use your best judgment and a collegial tone in composing your messages, even if the content isn’t positive. You’ll get better responses from your recipients and keep yourself—and your company— out of trouble. • Adopt a tone appropriate to your relationship with the recipient. • Never use sarcasm in professional messages. It will result in a step away from—not toward—your desired outcome.

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Section 4

Common Forms of Business Writing

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Chapter 18

E-mails When you send e-mails, do you usually receive a useful, friendly, timely response? Or one that falls short of that ideal? Or no response at all? If you’re struggling to get your recipients to focus on your messages, it’s because you’re competing with a lot of senders—in some cases, hundreds per day. Here’s how to write e-mails that people will actually read, answer, and act on: • Get straight to the point—politely, of course—in

your first few sentences. Be direct when making a request. Don’t fulsomely butter up the recipient first—although a brief compliment may help (“Great interview. Thanks for sending it. May I ask a favor?”). Spell out deadlines and other details the recipient will need to get the job done right and on time. • Copy people judiciously. Include only those who will immediately grasp why they’re on the thread.

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And avoid “Reply All.” Your correspondent may have been overinclusive with the “Copy” list, and if you repeat that mistake, you’ll continue to annoy the recipients who shouldn’t be there. • Keep your message brief. People find long e-mails irksome and energy-sapping. The more they have to scroll or swipe, the less receptive they’ll be to your message. They’ll probably just skim it and miss important details. Many people immediately close long e-mails to read the shorter ones. So rarely compose more than a single screen of reading. Focus your content and tighten your language. • Write a short but informative subject line. With a generic—or blank—subject line, your message will get buried in your recipient’s overstuffed inbox. (Not “Program,” but “The Nov. 15 Leadership Program.”) If you’re asking someone to take action, highlight that in the subject line. By making your request easy to find, you’ll improve your chances of getting it fulfilled. • Stick to standard capitalization and punctuation. Good writing conventions may seem like a waste of time for e-mail, especially when you’re tapping out messages on a handheld device. But it’s a matter of getting things right—the little things. Even if people in your group don’t capitalize or punctuate in their messages, stand out as someone who does. Rushed e-mails that violate the basic norms of written language bespeak carelessness. And their abbreviated style can be confusing. It takes 106

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less time to write a clear message the first time around than it does to follow up to explain what you meant to say. • Use a signature that displays your title and contact

information. It should look professional (not too long or ornate) and make it convenient for others to choose how to reach you. These tips are pretty commonsensical—but they’re not common practice. To show you how well they work, let’s compare some sample e-mails. Say you’re trying to help a young friend of yours, a budding journalist, land an internship. You happen to know the editor of a metropolitan newspaper, and you send him a message. Consider these two approaches: NOT THIS: Subject: Hello there! Hal— It’s been ages, I know, but I’ve been meaning to tell you just how effective I think you’ve been as the editor of the Daily Metropolitan these past seven years. Although I canceled my subscription a few years back (LOL)—the papers kept cluttering the driveway—I buy a copy at the coffee shop almost every day, and I always tell people there just how good the paper is. Who knows, I may have won you some subscribers with all my gushing praise! Believe me, I’m always touting the good old DM. Anyhoo, I have a mentee I’d like you to meet. You’ll soon be thanking me for introducing you to her. She would like an internship, and I know she’ll be the best intern you’ve ever had. Her name is Glenda Jones, and she is A-1 in every way. May I tell her you will contact her? (With good news, I hope!) It can be unpaid. I know your paper has fallen on tough times—but she wants to get into the business anyway! Silly girl. Ah, well, what can you do when journalism seems like it’s just in the blood? Expectantly yours, Myra P.S. You’ll thank me for this!

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BUT THIS: Subject: Request for an Interview Hal— May I ask a favor of you? Glenda Jones, a really sharp mentee in the township’s Young Leaders program, wants to pursue a career in journalism, and she’s eager to learn how commercial news organizations work. Would you spend 15 minutes chatting with her at your office sometime this month, before school lets out? I know it would be a meaningful introduction for her. You’ll find that she is a poised, mature, smart, and incredibly self-possessed young woman. She tells me that she’s looking for an unpaid internship. After a brief interview, perhaps you’d consider giving her a one-week tryout as your assistant. I know you’ve been a mentor to many aspiring journalists over the years, but here you have a real standout: editor of her college newspaper, Phi Beta Kappa member, state debate champion. No pressure here. If it’s a bad summer for you to take on an intern, I’ll completely understand. But please meet with her if you can. I’ve asked her to write to you independently, enclosing her résumé, to give you a sense of her writing skills. Thanks very much. Hope you and your family are doing well. Myra

The first version is colossally ineffective—and if Glenda gets an internship it will be very much despite the message from her mentor. The writer is inconsiderate (suggesting that journalism is a thankless career), insensitive (confessing to having canceled her subscription), and horribly presumptuous (acting as if the recipient owes her for “always touting” the newspaper and for suggesting this “A-1” intern—as well as assuming that Glenda must get the job). The second version is effective because it’s humble, you-centered, considerate (“No pressure here”), and mildly flattering (“I know you’ve been a mentor to many”). Though it’s a little longer than the first one, it gets to the point sooner, and it provides only helpful information. If

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Glenda has any real potential, she stands a decent chance of getting that interview and possibly landing an internship with this version. You may occasionally need to reprimand someone in an e-mail—to clearly explain a misstep, to make a record of it, or both. Compare these two examples, which show the right and wrong way to deal with an employee who sent an offensive e-mail to the whole team: NOT THIS: Subject: You Are in Trouble Ted— What on earth were you thinking when you sent that “joke”? Your coworkers sure didn’t appreciate it one bit, and neither did I. Don’t tell me it was “just a joke.” Haven’t you cracked your employee handbook and read our company’s policies? You’ve never done this before, that I am aware of. Don’t ever send an e-mail like this one again. Bill Morton Office Manager

BUT THIS: Subject: Disruption Caused by Your E-mail Ted— What one person considers funny, another may find offensive and insulting. Several people have complained to me about the e-mail headed “Have You Heard This One” that you sent everyone yesterday. I was as upset as they were by the foul language, which is inappropriate for an e-mail sent at work. Our company’s policy does not make an exception for offensive language, even when used in jest. Please think about how future e-mails will affect your coworkers. If I receive complaints again, HR will have to get involved. But I trust that won’t be necessary. Bill

In the first version, the writer’s anger is clear—and that’s about all that’s clear. Ted will certainly feel stupid (“What

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on earth were you thinking” and “Haven’t you cracked your employee handbook”) and scared (“Don’t ever”). But the writer doesn’t detail what Ted did wrong and why. And Ted isn’t likely to ask (“Don’t tell me it was ‘just a joke’”). The tone of the second version won’t immediately put the recipient on the defensive. This time, the writer explicitly identifies the source of the problem (“the e-mail headed ‘Have You Heard This One’ that you sent everyone yesterday”) and explains the effects, the policy violated, and the consequences. Ted is much more likely to understand his mistake.

Recap • Be as direct as possible while maintaining a polite tone. Come to the point of your e-mail within the first two or three sentences. • Never click “Reply All” without first checking the recipient list. Send your e-mail only to people who need to know its contents. • Keep e-mails brief. Restrict yourself to one screen’s worth of text and keep the message tight and focused so your readers get the point fast. • Write a concise subject line that tells your recipients why you’re writing and what it means to them. If they need to act on your message, make that clear in the subject line. • Diligently adhere to standard writing conventions—even when typing with your thumbs on a handheld device. 110

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Chapter 19

Business Letters Business letters aren’t a quaint thing of the past. They’re necessary in all sorts of situations—from correcting a vendor’s error to recommending a job candidate to announcing a new service. Effective ones can increase your profitability—by getting key customers to renew large orders, for example, or persuading service providers to charge you less for repeat business. They can also create goodwill, which may eventually yield financial returns. The pointers in this chapter will help you get those kinds of results.

Use direct, personal language You see canned phrases like enclosed please find and as per all the time in letters. They’re high-sounding but lowperforming. Your letters will be much clearer and more engaging without them.

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TIPS FOR WRITING CLEAR, PERSUASIVE LETTERS • Focus on the reader. Try not to begin with the word I; make it you, if possible (“You were so kind to . . . ,” “You might be interested . . . ,” etc.). Keep your recipient in the forefront because—let’s face it—that’s what will hold the reader’s interest. Not: “I just thought I’d drop you a note to say that I really enjoyed my time as your guest last week.” But instead: “What a wonderful host you were last week.” • Say something that matters. Make your message pointed but substantive—not just airy filler. Not: “I trust this finds you prospering in business, thriving in your personal life, and continuing to seek the wisdom that will bring lasting satisfaction in all your dealings.” But instead: “I hope you and your family and friends all dodged the fires last week in Maniton Springs— which sounded devastating.” • Avoid hedging and equivocating. Not: “It is with regret that we acknowledge that we do not appear at this time to be in a position to extend an offer of employment.” But instead: “We’re sorry to say that we aren’t now hiring.”

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NOT THIS:

BUT THIS:

Enclosed please find . . .

Here are . . .; Enclosed are . . .

As per your request . . .

As you requested . . .

We are in receipt of . . .

We’ve received . . .

We shall advise you . . .

We’ll let you know . . .

As per your letter . . .

As your letter notes . . .

We have your order and will transmit same . . .

We’ll forward your order promptly . . .

We take pleasure . . .

We’re glad . . .

Due to the fact that . . .

Because . . .

At an early date . . .

Soon . . .

In respect of the matter of . . .

Regarding . . .

People often overwrite their letters—studding their language with stiff, wordy expressions—when they’re uncomfortable with the message. Consider the difference between the two examples that follow. The first letter is a greeting to customers from a hotel manager; the second is my revision. NOT THIS: Dear Valued Guest: Welcome to the Milford Hotel Santa Clara. We are delighted that you have selected our hotel during the time when you will be here in the Silicon Valley area. Our staff is ready to assist you in any way and ensure that your stay here is an enjoyable and excellent one in every way. During your time here at the Milford Hotel Santa Clara, we would like to inform you that the hotel is installing new toilet facilities in all guest rooms. This project will begin on Tuesday, May 8 until Tuesday, May 29. The project engineers will begin at 9:00 a.m. and conclude for the day at 5:30 p.m. The team of associates will begin work on the 14th floor and will work in descending order until completion. During these hours, you may see the new or old toilets in the guest room corridors during the exchange process, and we will ensure that a high level

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of cleanliness standards will be upheld. We think you’ll soon appreciate fresh toilet seats. Should you be in your guest room during the toilet exchange and/or wish not to be disturbed, we recommend that you please utilize your Do Not Disturb sign by placing it on the handle of your guest room door. The vending area should remain sanitary, so feel free to have a candy bar or beverage of your preference. For your convenience, there are safes located in the bottom nightstand drawer in your guest room to safely store your valuables. There may also be available to you utilization of our safe deposit boxes located at the Front Desk. We appreciate your cooperation and understanding while we continue to improve the delivery system and appearance of our guest room product. Our goal is to minimize any inconvenience related to the toilet-exchange project. Please contact our Manager on Duty should you have any questions or concerns. Once again, please be assured of our utmost devotion to the total quality of your stay within the confines of the Milford Hotel Santa Clara. On behalf of myself and all the other management personnel and staff of employees here, we wish to reiterate our thanks for your selection and confidence that each and every factor of your stay here will be more than satisfactory. Sincerely, [386 words]

BUT THIS: Dear Valued Guest: Welcome to the Milford Hotel Santa Clara. We’re delighted you’re staying here, and we’re ready to help make your stay both enjoyable and productive. This month, we’re renovating the bathrooms, starting with the 14th floor and working our way down. Although you may have occasion to see or hear workers (during the day), we’re striving to minimize disruptions. Always feel free to use your “Do Not Disturb” sign while you’re in your room to ensure that our staff will respect your privacy. And if the renovations ever become a nuisance, please call me (extension 4505): I’ll see what I can do. The renovations are but one example of our commitment to providing first-rate lodging. Thank you again for joining us. Sincerely, [125 words]

The original is verbose (guest room product), perversely repetitious (the word toilet appears five times), hyper-

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bolic (excellent . . . in every way), bureaucratic-sounding (there may also be available to you utilization), unpleasantly vivid (you may see the new or old toilets), and even gross (have a candy bar right after you may see the new or old toilets). It seems destined to arouse ill-feeling and to drive away customers who bother to read it. The revised version, by contrast, conveys warmth and consideration with its “you” focus. Start fast, and say what you need to say in the simplest way you can. Think of Olympic diving: neatly in, no splash, soon out. And if you’re writing on behalf of your firm, use we. It’s much warmer and friendlier than the passive voice (It has been decided vs. We have decided) or the impersonal third person (this organization vs. we). Consider the difference: NOT THIS:

BUT THIS:

The Mercantile Association of Greater Gotham is delighted to count you among its newest members. The Mercantile Association will provide not only networking opportunities but also advantageous insurance rates, concierge services, and Internet advertising to its members. If you ever confront business issues with which the Mercantile Association might be able to devote its resources, it stands ready to be of assistance.

Here at the Mercantile Association of Greater Gotham, we’re delighted to count you among our newest members. We provide not only networking opportunities but also advantageous insurance rates, concierge services, and Internet advertising. If you ever confront business issues we can help with, we’ll do whatever we can. Just let us know.

In the left-hand example, passive voice (is delighted) and repetition of the organization’s name (it appears in every sentence) put distance between the writer and the reader. They make the communication sound like a

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commercial or promotion. But the yous and wes in the version on the right create a sense of belonging, a personal connection.

Motivate readers to act Business letters get results when they meet readers’ needs. To get people to do something, give them reasons they’ll care about. Consider one of the most challenging kinds of letters to write: a fund-raising appeal for a nonprofit group. The key is to understand why people give money to charitable organizations. Although marketers often cite seven “fundamental motivators” to explain responses—fear, guilt, exclusivity, greed, anger, salvation, and flattery—the reality is a bit more nuanced. Some combination of eight major reasons might motivate donors to send money in response to your appeal: • They believe their gifts will make a difference. • They believe in the value of organizations like yours. • They will receive favorable recognition for the gift. • They will be associated with a famous or respected person. • They will enhance their sense of belonging to a worthy group. • They will be able to relieve emotional burdens such as fear and guilt.

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• They feel a sense of duty. • They will receive tax benefits. Certain principles follow from these reasons for giving. A successful fund-raising letter must (1) appeal directly from one person to another; (2) depict an opportunity for the recipient to satisfy personal needs by supporting a worthwhile aim; and (3) prompt the recipient to take a specific, decisive action. (These principles apply to other types of business letters as well.) Note how all this theory plays out in an actual fundraising letter:

Dear Marion: May I count you in as a table sponsor at the Annual Dinner of the Tascosa Children’s Home of North Texas? Your sponsorship will pay a month’s room and board for one of the 50 orphaned teenagers that we care for. The event will be held at 6:00 p.m. on July 1 at Snowdon Country Club, and the emcee will be the nationally syndicated television host Spooner Hudson— our longtime national spokesperson. Celebrity chef Margrit Lafleur promises to serve up one of his memorable dinners, and the wines will be personally selected by master sommelier Peter Brunswick. Most excitingly, two mystery guests from Beverly Hills will be there that evening—among the best-known philanthropists in the world. As a table sponsor, you’ll be credited as one of our Patron Angels—and, believe me, the tangible gratitude

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of our kids will bring you the lasting satisfaction that you have vastly improved their lives and well-being. Our kids are reachable and teachable, but only through the generosity of our community’s philanthropic leaders. Many people, of course, can’t help us in our mission. We count on our Patron Angels. I hope you’ll spend a few minutes browsing through the Home’s brochure (enclosed) and that you’ll fill out the card committing to fill ten seats at your table (a $1,500 tax-deductible gift). I look forward to hearing from you soon. Sincerely, Now look again at the bulleted list that precedes the letter to Marion (our fictitious recipient): The writer deals with every item on the list. With a letter like that, you can hope to elicit prompt action from an acceptable percentage of recipients.

Ease into bad news If you have a rejection to deliver in your letter, sandwich it between happier elements. Don’t start with a direct “no.” Your readers can bear disappointment more easily if you begin on a genuine positive note and then explain the reason for the negative decision. They’ll also be more likely to grant your wishes—make a purchase, sign up for your webinar, renew a membership—despite your denying theirs.

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Business Letters

NOT THIS:

BUT THIS:

We regret to inform you that we cannot supply the 500 copies of Negotiate It Now! at the 60% discount that you have requested. No one—not even one of our authors, and not even the biggest bookselling chains—receives such a hefty discount. If you would care to resubmit your order at the more modest figure of 30%, we will gladly consider the order at that time. But I can offer no guarantees.

How rewarding to hear that you intend to use Negotiate It Now! as part of your business summit. You’ve chosen the best book on the subject, and we’d be delighted to supply it. Although you’ve requested a 60% discount off list price, the most we can offer is 30%. That’s the largest discount available to anyone, and we’re happy to extend it to you with a purchase of 500 copies.

Recipients of bad news will probably be unhappy no matter what. But to some extent you can control just how unhappy they’ll be. Some tips: • Adopt the reader’s perspective—and be your best self. If your correspondent is rude, be polite; if anxious, be sympathetic; if confused, be lucid; if stubborn, be patient; if helpful, show gratitude; if accusatory, be reasonable and just in admitting any faults. • Answer questions directly. • Don’t overexplain. Say only as much as necessary to get your point across. • Put things in the simplest possible terms—never use “insider talk” or bizspeak. • Use the voice of a thoughtful human being, not a robot.

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Even if your letter grants a benefit or request, it may irk the recipient if it does so in a way that puzzles, sounds grudging, or seems indifferent to the reader’s predicament. NOT THIS:

BUT THIS:

Joan— In response to your request for a travel subsidy to the conference where your award will be given, Jonathan has reminded me of our current discretionaryspending freeze. He has decided, however, to make an exception in this instance so long as your flight is no more than $400 and you stick to a $50 per diem. Please submit your fully documented expenses upon your return.

Joan— Congratulations on your Spivey Award! We’re delighted for you. Jonathan hastened to tell me that despite our current discretionary-spending freeze, he wants to support your travel to accept your award. We can manage a $400 flight reimbursement and a $50 per diem for on-the-ground expenses. You’ll be a great company representative, I know, and I only wish I could be there myself to see you honored.

Sincerely, Rebekah Brandy— At this time you have now used up all your available sick-leave days and vacation days for the year. A sister-in-law does not qualify for the closeness of relation required for an employee to be eligible for compensated bereavement leave, so you will be docked for any days you choose to be absent next week around the time of the funeral. I’m afraid that policy is simply inflexible, and I checked with Jane to confirm this.

Sincerely, Rebekah Brandy— Once again I want to extend my condolences for your family’s loss. Take the time you need next week to be with your family. I’m sorry to report that the days will be uncompensated, according to our policies for bereavement leave, but I hope you’ll call on me if I can do anything else for you in this time of need. Jane joins me in sending our heartfelt sympathies. Sincerely, Pamela

Sincerely, Pamela

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ENCLOSED PLEASE FIND See what business-writing authors have long said about this wooden phrase and others like it: Richard Grant White (1880): “[Please find enclosed:] A more ridiculous use of words, it seems to me, there could not be.” Sherwin Cody (1908): “All stereotyped words [that] are not used in talking should be avoided in letter writing. There is an idea that a certain peculiar commercial jargon is appropriate in business letters. The fact is, nothing injures business more than this system of words found only in business letters. The test of a word or phrase or method of expression should be, ‘Is it what I would say to my customer if I were talking to him instead of writing to him?’” Wallace E. Bartholomew & Floyd Hurlbut (1924):  “Inclosed herewith please find. Inclosed and herewith mean the same thing. How foolish to tell your reader twice exactly where the check is, and then to suggest that he look around to see if he can find it anywhere. Say, ‘We are inclosing our check for $25.50.’” A. Charles Babenroth (1942): “Enclosed please find. Needless and faulty phraseology. The word please

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has little meaning in this instance, and the word find is improperly used. poor: Enclosed please find sample of our #1939 black elastic ribbon. better: We are enclosing (or We enclose) a sample of our #1939 black elastic ribbon.” L. E. Frailey (1965): “So much for the worn-out, hackneyed expressions [enclosed herewith, enclosed please find, herewith please find] so often seen in business letters—whiskers, rubber-stamps, chestnuts, call them what you please. They are sleeping pills [that] defeat the aim of making every letter a warm, personal contact with the reader.” Gerald J. Alred, Charles T. Brusaw, & Walter E. Oliu (1993): “Using unnecessarily formal words (such as herewith) and outdated phrases (such as please find enclosed) is another cause of affectation.” Kelly Cannon (2004): “[I]n any business letter, certain principles are universal. ‘Inure to the benefit of’ is four words too long, ‘enclosed please find’ sounds pompous and silly, and ‘I am writing this letter to inform you that . . .’ is a thoughtless statement of the obvious.”

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Don’t write in anger Be kind and diplomatic, and say please and thank you. Courtesy is necessary to all business transactions—even letters of complaint. Omit it, and you’ll be dismissed as a crank. You can be courteous while still being direct. NOT THIS:

BUT THIS:

We are astonished at your complaint. The brochures that we printed were exactly as you specified. You okayed the sample paper, the typesetting, and the proofreading (we gave you an extra three hours). You chose the hot-pink borders with the fine-screen halftones in the body type against our advice. You insisted on drop-shipping by the 18th, and as you know, a rushed job does not allow for first-rate press work. Moreover, we quoted you a bargain-basement price. Under the circumstances we believe that any unbiased observer would say that we performed remarkably well under the impossible conditions you imposed.

We agree with you that the brochures did not match the high standards you have a right to expect from us. But we believed, in this instance, that you considered the color quality less crucial than a low price and a quick turnaround. So we pushed the work through production in three days’ less time than we usually require. We advised against your using hot-pink borders and fine-screen halftones on the grade of paper you chose. Still, we exercised some ingenuity to achieve better results than are ordinarily possible. I mention this not to avoid responsibility but merely to suggest that we did the best that could be done under difficult circumstances. If you’ll allow us a few more days next time, as you ordinarily do, the results will be better.

As you can see, a combative, superior tone irritates and alienates the reader—and probably loses a customer. A more diplomatic approach still gets the point across (rush jobs always take a hit on quality), but without souring the relationship.

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When you receive unreasonable letters, don’t ever respond in kind. That just starts a negative chain reaction. Approach complaints with a dedication to first-rate service. Write with the same warmth and friendliness you’d use in face-to-face conversations. If you or your company made a mistake, avoid the temptation to ignore it, cover it up, or shift the blame. Instead of deceiving readers, you’ll provoke more ire. When you blunder, admit error and say what you’ve done (or will be doing) to correct it. Stress the desire to improve service.

Recap • Keep your language simple, personal, and direct. Avoid canned phrases that add little but pomposity and verbiage to your letter. • Motivate your readers to act on your letter by giving them reasons that matter to them. • When conveying bad news, soften the blow by opening on a positive note. Follow up by explaining the reason for the unfavorable outcome— without overexplaining. • Consider the reader: Be polite, sympathetic, and professional. • Remain courteous and diplomatic. Accept responsibility for any mistakes you may have made.

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Chapter 20

Memos and Reports Memos and reports are often used to get people up to speed on an issue, to induce action, or both. So make it immediately clear in each element—your title, summary, body, and conclusion—what you want readers to learn about or do.

Pick a short, clear title Whether you’re writing a memo’s subject line or a report title, choose concise, sure-footed language that says exactly what the document is about. NOT THIS:

BUT THIS:

Subject: Siegelson

Subject: Approval of Siegelson Acquisition

Subject: Settlement

Subject: Why We Should Reject Frost’s Settlement Offer

Subject: Print Run

Subject: Ginsburg Autobiography Print Run

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The titles on the left hint at the topics covered but don’t let readers know what they’re supposed to do with the information. Those on the right are more pointed (without being wordy): The first and third titles promise status updates; the second asks readers to follow a recommendation.

Summarize key specifics up front Figure out how many main issues you’re addressing— preferably no more than three (see chapter 4)—and then for each one state: (1) the issue in a way that anyone can understand, (2) your solution, and (3) the reason for your solution. Here’s an example:

Summary Issue: Arnold Paper Supply has consistently failed to meet our deadlines for delivery of multicolor, printed cardstock.

Proposed Solution: Switch to National Paper and Plastics Company, which has a higher fixed fee.

Reason: Though National Paper and Plastics Company has a higher rate per delivery, its turnaround is quicker. This will increase efficiency in the warehouse, allow us to fill more orders, and help us to establish goodwill with retailers who have been angry with us for not meeting their deadlines. By sharing everything important at the beginning of the document, you’ll end up repeating yourself—but in a way that’s reinforcing, not redundant. Readers will get a quick orientation with your very short version up front;

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the fully elaborated version in the body will unpack each point, providing details and data for support. I recommend going back and forth between the summary and the body when writing your first draft: Start by stating the problem and offering your best shot at the answer in your summary. As you do more work on the body of the memo or report, you’ll go back and refine the problem and the answer. Write your summary for three types of readers: • A primary audience of one or more executives interested only in a quick status update, your findings and conclusions about a problem, or your recommendations. • A line of readers who may be called in (with or without your knowledge) to assess the soundness of your document, judging its merits according to their own fact-checking and critical analysis. • Future readers (including those in the first category two years from now) who will be required to quarry information from your document some time after you’ve written it. (After all, memos and reports are rarely acted on quickly: They may be laid aside for weeks or months or even years before anyone has the resources—or a mandate—to act.) All three types of readers have a legitimate claim to your attention. More important, you need to win them all over if you want your recommendations to go anywhere. Even if someone else has assigned you the question you’re exploring, you must define it in your summary.

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WHEN WRITING A REPORT . . . • Make sure you understand why you’re writing and what you’re reporting on. • Do your best, in light of your background knowledge and initial research, to write a summary that concisely states the problem, your solution, and why your solution will work or why it’s preferable to alternatives. • Discern sources of relevant information. • From those sources, gather all the data and explanations that you can. • Synthesize relevant observations and inferences and throw out the rest. • Put your findings into report form. • Revise your summary to match your body text.

You, the writer, are in the best position to limit its scope: The person who did the assigning may not know enough about the problem to raise the right question—or to understand that it actually contains three subquestions. In fact, you won’t know these things until you do your research, which may involve digging up data that reveal where the problem lurks, reading about how other organizations have tried to solve it, talking with people who have discovered some helpful workarounds, and so on.

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You should do enough research to understand the problem. Then you state the problem so clearly that anyone could understand why it’s worth solving. If you’re making a recommendation, say (1) what needs to be done, (2) who should do it, (3) when and where it should be done, (4) why it should be done, and (5) how it should be done. A brief marketing report might look like this:

Marketing Strategy for Skinny Mini Line of Chocolates Summary Issue: Within the last fiscal year, Pantheon Chocolate’s sales have dropped from $13,320,000 to $10,730,000, but its market share remains unchanged at 37%. Proposed Solution: Increase promotion of the Skinny Mini line of chocolates. These chocolates contain less sugar and fat than the regular line. Reason: Health-conscious consumers want low-calorie options but don’t want to sacrifice full flavor. The Skinny Mini chocolates have fewer calories than Pantheon’s regular chocolates but the same flavor. Consumers are buying more “healthy alternative” chocolates Because consumers increasingly regard sugar and fat as unhealthy, they are not buying as much high-end gourmet chocolate as they were a year ago. This has led to a decline in sales for all high-end chocolate makers, including Pantheon. But for candies marketed as “healthy alternatives” with less sugar and fat and fewer calories, 129

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sales have increased 42% in the same period. Marketing studies show that consumers of “healthy alternative” candies are most attracted to low-calorie chocolates that are packaged in specific-calorie portions rather than by weight. These consumers also complain that low-calorie candies lack the rich flavor that they are used to, and they are willing to pay more for quality. Pantheon already produces a line of low-calorie gourmet chocolates, Skinny Minis, that have fewer calories than Pantheon’s regular candies but the same flavor. They’re currently sold by the pound or in gift boxes in high-end chocolate boutiques and as elegantly wrapped bars in coffee shops. Recommendations • To reach more health-conscious consumers, Pantheon should package Skinny Mini chocolates in a variety of portion-controlled sizes and make them available in health-food stores and supermarkets as well as the chocolate and coffee shops. • The marketing campaign should stress the controlled portion and limited calories of each Skinny Mini bar or gift box, and the packaging should boldly display the low calorie count.

Recap • Choose a concise title or subject line that tells readers what topics the memo or report covers

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and what they should do about it (or why they should care). • Begin your document by addressing your main points and outlining the issue, your solution, and the reason for it. • Work from this summary when elaborating the body of your first draft. • Modify the summary as you go to ensure that it accurately reflects what’s in the body.

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Chapter 21

Performance Appraisals Writing performance appraisals, sometimes called employee reviews, needn’t be a dreaded responsibility. As long as you have gathered your facts in advance—reviewed the notes you’ve taken throughout the year, asked others for feedback on the people you supervise, and carefully read people’s self-assessments—the drafting isn’t onerous if you have an ample evaluative vocabulary. I’ve written this chapter so you’ll have some helpful phrases at the ready. The sample phrases that follow address seven aspects of work: attitude, efficiency, human relations, judgment, knowledge, reliability, and communication skills. But you can adapt the wording to suit whatever qualities you’d like to focus on. Then it’s a matter of pairing the phrases with specifics that support them. For example: “When we had several layoffs last June, Lauren remained utterly calm and collected while demonstrating keen sensitivity to those who lost their jobs. She [fill in whatever particular action was noteworthy].” 133

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Attitude Superb

Good

Acceptable

Needs Improvement

Poor

• • • • • • • • • • • • • • • • • • • •

shows unwavering commitment always gives maximal effort is always friendly and happy to help always brings out the best in others shows strong commitment usually makes a strong effort is usually friendly and happy to help usually brings out the best in others shows adequate commitment makes an effort is often friendly and happy to help is often a positive influence on the group could show more commitment doesn’t always make an effort is sometimes quarrelsome sometimes creates tension within the group lacks commitment rarely makes a real effort is quarrelsome and sometimes even hostile often creates tension within the group

• • • • • • • • • • • •

never wastes time or effort delegates effectively always completes tasks on time can manage many projects at a time rarely wastes time or effort usually delegates appropriately almost always completes tasks on time can manage several projects at a time usually doesn’t waste time or effort delegates pretty well usually completes tasks on time can manage more than one project at a time sometimes wastes time and effort tries to do too much without delegating fails to complete tasks on time cannot manage more than one project at a time often wastes time and effort usually fails to delegate when appropriate can’t be counted on to complete tasks on time struggles to manage even one project at a time

Efficiency Superb

Good

Acceptable

Needs Improvement

• • • •

Poor

• • • •

Human relations Superb

• demonstrates keen sensitivity to others and an uncanny ability to understand their needs • participates actively and collegially in meetings • works exceptionally well on teams • relates to customers extremely well

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Good

Acceptable

Needs Improvement

• • • • • • • • • • • •

Poor

• • • •

usually demonstrates sensitivity to others participates effectively in meetings works effectively on teams relates to customers well often demonstrates sensitivity to others participates adequately in meetings gets along with fellow team members relates to customers competently does not always pick up on interpersonal cues sometimes wastes others’ time in meetings is sometimes motivated more by personal goals than by team goals sometimes alienates customers through inattention rarely pays attention to others’ reactions often wastes others’ time in meetings does not work well on teams often alienates customers with impoliteness and sarcasm

Judgment Superb

Good

Acceptable

Needs Improvement

• makes excellent choices and informed decisions • remains utterly calm and collected even in times of crisis • knows precisely which problems need immediate attention and which ones can wait • behaves professionally and appropriately in every situation • makes sound choices and reasonable decisions • remains relatively calm and collected even in times of crisis • generally knows which problems need immediate attention and which ones can wait • behaves professionally and appropriately • generally makes sound choices and informed decisions • remains mostly calm and collected except in times of crisis • does a pretty good job distinguishing between problems that need immediate attention and those that can wait • generally behaves professionally and appropriately • sometimes makes poor choices and ill-informed decisions • sometimes lacks the calm and collected demeanor required in high-pressure circumstances • often doesn’t distinguish between problems that need immediate attention and those that can wait • sometimes behaves unprofessionally and inappropriately

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Judgment (continued) Poor

• often makes poor choices and ill-informed decisions • often lacks the calm and collected demeanor required in high-pressure circumstances • typically fails to distinguish between problems that need immediate attention and those that can wait • often behaves unprofessionally and inappropriately

Knowledge Superb

Good

Acceptable

Needs Improvement

Poor

• is exceptionally well informed about all aspects of the job • demonstrates extraordinarily comprehensive knowledge • skillfully handles complex assignments without supervision • has a comprehensive knowledge of the industry • is well informed about key aspects of the job • demonstrates thorough knowledge • can handle complex assignments with some supervision • has strong knowledge of the industry • understands the job • demonstrates adequate knowledge • can handle moderately complex assignments with supervision • has an acceptable degree of knowledge of the industry • doesn’t fully understand the job • demonstrates less than satisfactory knowledge • sometimes mishandles assignments of moderate complexity, even with supervision • has insufficient knowledge of the industry • is ill-informed about many aspects of the job • demonstrates inadequate knowledge • mishandles basic assignments • has little knowledge of the industry

Reliability Superb

Good

Acceptable

• • • • • • • • • • • •

always meets deadlines is unfailingly dependable achieves excellent results in urgent situations always delivers on promises meets deadlines is highly dependable achieves good results in urgent situations almost always delivers on promises meets most deadlines is dependable achieves acceptable results in urgent situations delivers pretty consistently on promises

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Needs Improvement

Poor

• sometimes fails to meet important deadlines • is sometimes undependable • sometimes fails to achieve acceptable results in urgent situations • sometimes fails to deliver on promises • often fails to meet important deadlines • is rarely dependable • often fails to achieve acceptable results in urgent situations • can’t be counted on to deliver on promises

Communication skills Superb

Good

Acceptable

Needs Improvement

Poor

• writes and speaks with remarkable clarity • never gets bogged down in unnecessary details • has superior communication skills in person and over the phone • develops and delivers imaginative, clear, and concise presentations • writes and speaks clearly • rarely gets bogged down in unnecessary details • has sound communication skills in person and over the phone • develops and delivers clear, concise presentations • generally writes and speaks clearly • usually avoids getting bogged down in unnecessary details • has adequate communication skills in person and over the phone • develops and delivers acceptable presentations • sometimes writes and speaks unclearly and with undue complexity • sometimes gets bogged down in unnecessary details • sometimes struggles to communicate in person and over the phone • develops and delivers presentations in need of further work and polish • writes and speaks unclearly and with undue complexity • gets bogged down in unnecessary details • fails to communicate effectively in person and over the phone • develops and delivers presentations that ramble and lack clarity

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Recap • Prepare by gathering your facts in advance: Keep performance notes throughout the year and review them before writing. Ask other colleagues for feedback on those you’re evaluating. Carefully review the employees’ self-assessments. • Use the sample phrases provided here to help articulate your impressions. • Always pair your general statements with specific examples that support them.

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Appendix A

A Checklist for the Four Stages of Writing Madman

□ Consider why you’re writing: What’s moved you to write? What’s the assignment? What do you hope to achieve? □ Think about who your readers are and what they need to know. □ Figure out how much time you have, and work out a rough schedule for gathering ideas and material, outlining, preparing a draft, and revising. □ Research with imagination and gusto. Take notes on relevant information. □ Push yourself to be creative. Don’t be content with obvious ideas that just anyone would think of.

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Architect □ Jot down your three main points in complete sentences—with as much specificity as you can. □ Consider the best order of the three points and reorganize them if necessary. □ Decide how to open and conclude the document. □ Think about what visual aids might be helpful in conveying your ideas.

Carpenter □ If possible, turn away from all distractions. Silence your phone and your computer alerts, and find an hour or so of solitude. You’ll be writing. □ Use your three-point outline as a guide. □ Start writing paragraphs that support the point you find easiest to start with—then move to the other points. □ Write swiftly without stopping to edit or polish. □ Try to write a full section in one sitting. If you must get up in the middle of a section, start the next sentence with a few words and then leave. (When you come back, you’ll find it easier to resume a half-completed sentence than to start a new one.)

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Judge

□ Immediately after completing your draft, read it through with the idea of amplifying ideas here and there. □ Then let it cool off—overnight, if you can, or for a few minutes if you’re working under an urgent deadline. □ When you return to your draft, consider it from the audience’s perspective. Will it be clear to everyone who looks at it, or does it require inside knowledge? Is it concise, or does it waste words and time? □ Identify the draft’s two biggest flaws and try to fix them. □ Ask yourself: •

Is anything essential missing?

•

Are important points stressed?

•

Is the meaning of each sentence clear and accurate?

•

Are my transitions smooth?

•

What can I trim without sacrificing important content?

•

Are there any vague passages I can sharpen with specific facts?

•

Are there boring passages I can word more vividly?

•

Can I improve the phrasing?

•

Can I improve the punctuation?

•

Are there any typos?

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Appendix B

A Dozen Grammatical Rules You Absolutely Need to Know 1. It is perfectly acceptable to start a sentence with And or But. The single most important element in fluid writing is the use of effective transitions between sentences and paragraphs. And no transition is more effective than the plain single-syllable words and and but. The notion that it’s ungrammatical to start a sentence with a conjunction has long been ignored by the best writers and debunked by reputable grammarians. Look at the op-ed page of any major newspaper or scan through some pages of any well-edited magazine and you’ll see plenty of examples. Why? Because 143

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conjunctions are excellent transition tools, signaling how the sentence to follow fits in with what came before—and because they’re short, sharp, and fleet. And and but are usually more effective than clunky conjunctive adverbs such as additionally and however, which add syllables and demand a comma after them. 2. It is perfectly acceptable to end a sentence with a preposition. The “rule” that you should not end a sentence with a preposition is a misbegotten notion based on Latin syntax and expounded by a few (a very few) 19th-century writers. Grammarians have long since dismissed it as ill-founded and unnecessary. Often a sentence that ends with a preposition sounds far more natural than the same sentence forced into avoiding the terminal preposition. Consider: What will the new product be used for? versus For what purpose will the new product be used? That said, a strong sentence should end forcefully because the end of a sentence is the most emphatic position. A preposition is rarely a powerful sentence-ender, but it is not an ungrammatical one. 3. The adverb corresponding to the adjective good is well. When describing performance, manner, action, and the like, use the adverb well . Though becoming more widespread, the adverbial use of good is nonstandard English . The question whether to use good or well frequently arises when someone asks “How are you doing?” The best answer—assuming a positive response— is “I’m doing well” (or “I’m fine, thank you”). Saying “I’m good” is common but unrefined. The response “I’m *doing good” is substandard because good is there being used as an adverb. An exception to the rule against using good as an adverb applies with certain set phrases . 4. The subject of the sentence determines the number of the verb. A subject and its verb must both be either singular or plural. Grammar Girl says so. (Grammar Girl and says are both singular.) All grammarians say so. (Grammarians and say are both plural.) The rule seems so elementary as to be trivial. But a lot can go wrong. A prepositional phrase modifying the subject is a common source of trouble: Should an oversupply of foreign imports take a singular or plural verb? The answer is singular, to match the subject oversupply. Although compound 145

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Appendix B

subjects generally take plural verbs, sometimes a subject really expresses a single (and singular) idea . The subject, bread and butter, is plural in form but singular in sense, so it takes the singular verb is. There (in its use as a subject stand-in, as in There is another way) presents a special problem, one that some authorities call the most common grammatical error today. In inverted sentences, the true subject follows the verb . The subject profits is after the verb go. Yet people seem to want singular verbs with there regardless of what follows, and errors result . The compound subject capacity and competition should take the plural verb are, not the singular verb is. Illusory compounds can also cause trouble. These occur with constructions such as together with, as well as, and the like, none of which forms a plural. . The subject is the singular board, which takes the singular verb endorses. 5. Both either and neither, as subjects, take singular verbs. Beware of distractions caused by prepositional phrases containing plural objects: The sub146

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ject—either or neither—is still singular . 6. With neither/nor and either/or in the subject position, the second element controls the number of the verb. When the correlative conjunctions either/or or neither/nor frame alternatives in the singular, the verb is singular . When the alternatives are plural, the verb is plural . But when one element is singular and the other is plural, match the verb to the second element . 7. A flat adverb like thus or doubtless takes no –ly ending. Most adverbs are formed by adding the -ly suffix to adjectives (large makes largely, quick makes quickly) or changing the -able suffix to -ably (amicable makes amicably, capable makes capably). But the English language also contains a fair number of adverbs that do not 147

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Appendix B

end in -ly (such as fast, ill, and seldom). With these, it is unnecessary—and unidiomatic—to add the suffix -ly. The two most common examples are *doubtlessly and *thusly. 8. The words however, therefore, and otherwise cannot join independent clauses without additional punctuation. An independent clause (1) contains a subject and a verb and (2) expresses a complete thought. It can stand alone as a sentence, or it can be connected with another clause by a comma and a conjunction (such as and, but, or) . When two independent clauses are joined with a conjunctive adverb like however, a semicolon must go in front of the connector and a comma after . Omitting the semicolon or replacing it with a comma creates what is known as a “comma splice” . 9. With a verb phrase, the adverb usually goes after the first auxiliary verb. Writing authorities have long agreed that midphrase is the strongest and most natural place for an adverb . The alternatives are awkward or nonsensical . Resistance to this guidance may be due to the old superstition that it’s ungrammatical to split an infinitive (it isn’t), since that is one type of split verb . When the phrase has more than one auxiliary verb, the most natural placement is usually after the first one (as in has long been assumed). 10. Relative pronouns (that, which, and who) must appear alongside their antecedents. A relative pronoun (that, which, who, whom, and various forms with the -ever suffix) serves one of two purposes. First, it can link a dependent clause to an independent one . The dependent clause (whoever wants to participate) serves as the subject of the main clause. Second, it can join a clause with its antecedent . Here, the dependent clause (who want to participate) adds crucial information about its antecedent, those. The second type of relative pronoun should be close to its antecedent—preferably immediately after it. The link must be clear because 149

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Appendix B

trouble can occur when the reference becomes uncertain . Which is being eliminated, the position or the department? Restating the sentence clarifies it . The relative pronoun that immediately follows its antecedent, customer-service position. 11. An appositive is set off by commas when it is not essential to the sentence (when it is nonrestrictive), but is not set off by commas when it is essential (restrictive). An appositive is a noun or noun phrase that follows another noun (or pronoun) and identifies or depicts it more fully . In the first example, the appositive Pat is not set off by commas from the rest of the sentence. In the second, a tall man in an oversized suit is set off. The reason is that appositives, like relative clauses (those introduced by which, who, and whom), may or may not be essential to the meaning of the sentence. Pat, in the first sentence, is essential—it specifies which colleague (presumably out of several) is being referred to. In the second sentence, the appositive merely adds description. We could 150

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A Dozen Grammatical Rules You Absolutely Need to Know

also say that Pat, in the first sentence, defines or restricts its referent, colleague, while the appositive in the second sense is indefinite or nonrestrictive. Current stylebooks use the terms restrictive and nonrestrictive to label these qualities. Appositives may also be set off by em-dashes (typically for emphasis) or parentheses (typically for deemphasis) instead of commas. 12. Correlative conjunctions (those used in pairs) require parallel phrasing. Correlative conjunctions (such as both . . . and, neither . . . nor, and not only . . . but also) work in pairs, joining related constructions that match in syntax. Each conjunction should immediately precede the part of speech it describes. Parallelism is rarely a problem with simple nouns , but it becomes tricky with phrases and clauses, as in the erroneous phrasing *We not only raised our regional market share but also our profit margin, which should read: We raised not only our regional market share but also our profit margin. The verb raised must be outside the first correlative conjunction (not only) to apply to both possessive phrases (our regional market share and our profit margin).

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Appendix C

A Dozen Punctuation Rules You Absolutely Need to Know 1. Hyphenate your phrasal adjectives. A small-business incentive is different from a small business incentive. A limited-liability clause is different from a limited liability clause. When two or more words as a unit modify a noun, they must be hyphenated (unless certain exceptions apply). So a hotel’s door sign advising the staff not to disturb the guests would be a do-not-disturb sign. A company that is 25 years old is a 25-year-old company. There are some exceptions: (1) Don’t hyphenate simple phrases formed by an -ly adverb and a past-participial adjective . (2) Don’t hyphenate phrases formed with proper nouns or foreign words . (3) Generally, don’t hyphenate phrasal adjectives used after the noun they modify , but there are exceptions based solely on conventions of usage . 2. Use a comma before and or or when listing three or more items. Although simple series might not require the so-called serial comma before the conjunction to be perfectly clear, clarity fades fast as series become longer and more complex . So what is the rule? The Chicago Manual of Style and other authorities on professional, technical, and scholarly writing almost universally endorse using the serial comma in all series for one good reason: It is sometimes wrong (ambiguous or worse) to omit it, but never wrong to include it. 3. Don’t use a comma to separate two compound predicates. Do use punctuation—usually a comma but a semicolon if needed for clarity—to separate a series of three or more compound predicates. 154

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When two predicates share the same subject, it’s common not to repeat the subject. If the second clause repeats the subject, then the comma is proper before the conjunction . But if the subject isn’t repeated (is shared by both predicates), there should be no comma before the conjunction . When three or more such clauses are combined (sharing the same subject), the predicates become a series and do require at least a comma to separate them . When one or more of the parts in the series contain commas, use semicolons instead to separate the predicates . The same principle holds for a compound predicate . 4. Don’t use an apostrophe to form plural nouns. The use of apostrophes to form plurals (rather than possessives or contractions) is almost always incorrect. Most proper nouns take a simple -s, while those ending in -s, -x, -z, and sibilant -ch or -sh take -es. The exceptions to the no-apostrophe rule are for lowercase 155

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Appendix C

letters and capital letters when an apostrophe might prevent a miscue . Don’t use apostrophes to pluralize numbers or capitalized abbreviations without periods . The usual way to pluralize words and letters is to italicize the word or letter and append -s in roman type . The incorrect use of apostrophes is especially common when pluralizing names. Mr. and Mrs. Smith are the Smiths, not *the Smith’s (or *the Smiths’). Mr. and Mrs. Stevens are the Stevenses (not *the Steven’s or *the Stevens’). 5. Don’t separate the grammatical subject from the verb, unless there’s a set-off intervening phrase. As a rule, words and phrases that go together should be together, not unduly separated. So an appositive, for example, is next to the noun or pronoun it elaborates and a pronoun should not be so far from its antecedent as to make the connection unclear. On the same principle, the subject and verb in a sentence are best kept close together so that the sentence does not wander off on tangents. That’s not to say that an intervening phrase or clause between the subject and verb is 156

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always wrong. It can be an effective way to modify the sense or add information . Although this technique adds emphasis to the modifying matter, it’s often clearer to make the phrase or clause introductory so that the subject and verb remain close . 6. Use bullets as attention-getting devices, but don’t overuse them. Bullets draw the reader’s eye to a list of points without signaling that they’re presented in a certain order. The best lists follow these rules: •

Set up the list with an explanatory sentence in the form of an introduction that ends with a colon.

•

Keep all the items parallel in grammatical form (all noun phrases, say, or all predicates starting with verbs) and somewhat similar in length.

•

Present the items with a hanging indent so the bullets stand out to the left and all the lines of type align.

•

Typeset the items single-spaced, perhaps with a bit of extra spacing between items. 157

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Appendix C

•

Keep the bullets simple in appearance, eschewing whimsical artwork in favor of solid bullet dots about the size of a lowercase o.

As with any other design device aimed at signaling emphasis or attracting the reader’s attention, the overuse of bulleted lists dilutes their impact. 7. Avoid quotation marks as a way of emphasizing words. Quotation marks can send mixed signals. Most often they signal their traditional function: to set off a quotation. Sometimes they suggest a snide attitude , or perhaps imply that what they contain is not what it purports to be at all . They can be the equivalent of introducing the words with “so-called.” Given all these different possible meanings, quotation marks are a poor choice for emphasizing words and phrases. That is traditionally the role of italic type, an unambiguous signal. Also avoid (1) underlining, the italic font’s uglier equivalent from the typewriter era; (2) overuse of boldface type, which is best reserved for titles and headings; and (3) all caps, which is irritating and hard to read if longer than a word or two. 8. Don’t hyphenate most prefixed terms. American English is generally averse to hyphenating its prefixes (anteroom, biennial, 158

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deselect, proactive, quarterfinal, semisweet). Avoid the practice of inserting a hyphen, even when it results in a doubled letter (cooperate, reelect, misspeak). But there are a few exceptions: (1) when it’s needed to avoid a miscue or an ambiguity (re-create, re-lease, re-sign); (2) when the root word is a proper noun (preHalloween sales); and (3) when using certain prefixes such as all- (all-inclusive), ex- (expartner), and self- (self-correcting). 9. Use a colon or a comma—never a semicolon— after a salutation. Colons are standard in business correspondence , commas in personal letters . Commas may also be permissible for business letters, depending on the personal relationship between the sender and the recipient. But to use a semicolon (*Dear Mr. Jones;) is always incorrect. 10. Long dashes have two defensible—and valuable— uses: to frame and to emphasize. First, long dashes—called em-dashes—frame what is basically parenthetical matter and make it stand out. Notice in the first sentence how “called em-dashes” stands out. It could just as easily have been set off from the rest of the sentence by commas or placed inside parentheses. But the dashes give an interruptive phrase special emphasis (while parentheses 159

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Appendix C

almost beg to be skipped over). It’s a strong technique that should be used but, like all effective writing devices, not overused. Second, em-dashes are handy for short tags that sit apart from the main sentence. The em-dash replaces the colon but adds emphasis. The setoff can come at the beginning of the sentence or at the end . 11. Don’t use a comma when writing a month and year. Stylebooks have long agreed that no comma should appear between the month and year . With the standard American format of month–day–year, do use a comma after the day . No comma is necessary with the day–month–year format . Use a comma after the year unless the date is used adjectivally . 12. For singular possessives, add ’s even if the word ends with an -s, -z, -x, or -ss. This is the first rule in Strunk & White’s famous book The Elements of Style: A singular possessive takes ’s . But note that personal pronouns and who have their own form without the ’s (mine, our, ours, your, yours, his, her, hers, its, their, theirs, whose). Also, if the name of a corporation or other entity is formed from a plural word, add only the apostrophe . When forming a plural possessive, use the word’s standard plural form and add an apostrophe to the final -s . An exception applies to plural words that don’t end in -s: they follow the same rule as singular possessives .

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Appendix D

Common Usage Gaffes In this top-20 list of usage points that distinguish sloppy from refined language, an asterisk precedes erroneous words and phrases. NOT THIS:

BUT THIS:

I *feel badly about the oversight.

I feel bad about the oversight.

I’m *feeling very well about the sales figures.

I feel good (contented). I feel well (healthy).

They’re *doing good.

They’re doing well.

Just *between you and I.

Just between you and me.

He expected *Helen and I to help him.

He expected Helen and me to help him.

She *could care less.

She couldn’t care less.

He’s *laying down on the couch.

He’s lying down on the couch.

*Where are you at?

Where are you?

*If I would have been there . . . .

If I had been there . . . .

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Appendix D

NOT THIS:

BUT THIS:

She serves on the board; *as such, she has fiduciary duties.

She’s a board member; as such, she has fiduciary duties.

The letter was sent *on accident.

The letter was sent by accident.

I *wish he was faster.

I wish he were faster.

I *could of done it.

I could have done it.

*in regards to

in regard to, or regarding

*less items

fewer items

He was *undoubtably guilty.

He was undoubtedly guilty.

*preventative

preventive

*There’s lots of reasons.

There are lots of reasons.

*as best as she can

as best she can

*irregardless

regardless, or irrespective

For more on usage, see Appendix F.

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Appendix E

Some Dos and Don’ts of BusinessWriting Etiquette Dos:

1. Proofread all documents before sending them out to make sure the spelling and grammar are correct. 2. Double-check that the recipient’s name is spelled correctly and that the form of address is proper (Ms., Mrs., Miss, Mr., Dr., Judge, Justice, Honorable, etc.). Double-check the envelope, too, if there is one. 3. Sign business letters with your full name unless you’re friends with the recipient. If the salutation is “Dear Mr. Smith,” sign your full name; if it’s “Dear George,” sign your first name only. 165

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4. Sign your letters with an ink pen and not with a stamp of your signature. 5. Always include your contact information so that the recipient will know how to respond to you. 6. If you’re sending a handwritten note to a business contact or friend, use a stamp to mail the letter rather than meter-stamping the envelope. 7. Before sending an e-mail, make sure that you have (a) included everyone you need in the address block and (b) incorporated any attachments you refer to in the e-mail. 8. Use white space effectively so that the document reads well and is not a strain on people’s eyes. Create generous margins, leave spaces between paragraphs, break up text with subheads if appropriate, and indent appropriately. 9. Date your communications (except e-mails, which will date themselves) so that they give the reader a reference time. 10. Write distinctive thank-you notes if you’re writing them to several people in the same office. It’s counterproductive if recipients compare their notes and realize you massproduced them.

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Don’ts:

1. Don’t use all caps. It amounts to shouting at the reader. 2. Don’t return a letter to its sender by writing on it to save time or paper. A reply should be on a separate piece of paper, even if it’s a short note. Contracts and other agreements are a separate issue. 3. Don’t write “Thank you in advance.” If you want to thank people in a request, simply make the request and then write “Thank you.” Also, be sure to say thanks (perhaps in person) again when the task has been completed. 4. Don’t use BCC on an e-mail unless you are quite sure that it is necessary. It could get you a bad reputation as being indiscreet. 5. Don’t use tiny or unusual fonts that make your writing hard to read or that make you seem flippant. 6. Don’t write a very long topic in the subject line of an e-mail. 7. Don’t write a thank-you note on a card with a preprinted “Thank you!” or “Merci” (it’s not considered good manners). 8. Don’t let the passage of time stop you from writing to express congratulations, gratitude,

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Appendix E

condolences, or whatever other sentiment your instincts say you ought to express. 9. Don’t write a letter in anger or frustration. Step back, take some time, and detach yourself from the situation. Come back to writing when you have had time to reflect on the matter and can express yourself calmly. 10. Don’t put anything in writing that you would be ashamed to see reported on the front page of the Wall Street Journal.

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Appendix F

A Primer of Good Usage abstruse. See obtuse. accede; exceed. Accede = to agree or yield . Exceed = to surpass, to be greater than .

access; excess. Both are traditionally nouns. Access = the act or opportunity of approaching or entering. Excess = an amount beyond what is required. Of course, access is also common today as a verb meaning “to gain entry to; to penetrate” .

accord; accordance. Accord = agreement . Accordance = conformance .

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Appendix F

administer; administrate. The first is standard. Avoid *administrate, a back-formation from administration.

admission; admittance. Admission = permission or authority to enter . Admittance = physical entry .

adopt; adapt. Adopt = take up as one’s own . Adapt = modify . Note that the nouns are adoption and adaptation.

adverse; averse. Adverse = unfavorable or contrary to . Averse = reluctant or unwilling; having distaste of, fear of, or hostility toward .

advise; advice. Advise is the verb . Advice is the noun .

affect; effect. Affect is usually a verb meaning “to have an influence” . Effect is usually a noun denoting a result or outcome . Effect may also be a verb meaning “to bring about” .

aggravate; irritate. Aggravate = to make worse . Irritate = to

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annoy. Using aggravate to mean “irritate” is a common colloquialism, but it will still annoy some readers.

aide; aid. Aide is an assistant. Aid is assistance. allusion; illusion. Allusion = an indirect reference, as to a cultural work, historical event, or other form of shared knowledge . Illusion = a misperception or a mistaken belief .

a lot. Always two words. already; all ready. Already = previously, by this time . All ready = completely prepared .

alternative; alternate. As a noun, alternative = one option (among one or more others) ; alternate = a substitute .

altogether; all together. Altogether = entirely or completely . All together = collectively or in a group .

ambiguous; ambivalent. Ambiguous = inviting more than one reasonable interpretation . Ambivalent = having mixed emotions about something .

amend; emend. Amend = to add to a document, esp. a law or other legal document . Emend = to make corrections or edits to a piece of writing .

among. See between. amuse; bemuse. Amuse = to entertain or delight. Bemuse = to befuddle.

antidote; anecdote. Antidote = anything that counteracts a bad situation . Anecdote = an amusing, illustrative story .

anxious; eager. Anxious = anticipating with unease or worry . Eager = anticipating with enthusiasm .

appraise; apprise. Appraise = to assess in value . Apprise = to keep someone informed .

arbiter; arbitrator. Arbiter = a person with final say over a matter . Arbitrator = a person who conducts an arbitration to settle 172

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a dispute .

as. See like. assure; ensure; insure. Assure = to try to satisfy someone of something . Ensure = to make certain that something will happen or that things will be as expected . Insure = to indemnify against loss or damage .

attain; obtain. Attain = to achieve or accomplish something . Obtain = to get something .

averse. See adverse. avocation. See vocation. awhile; a while. Awhile is an adverb meaning “for a short time” . A while is a noun phrase meaning “a period of time” .

bear; born; borne. Bear = (1) to carry or support or (2) to give birth . Borne refers to sense 1 , and born to sense 2 .

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Appendix F

bemuse. See amuse. beside; besides. Beside = (1) next to or at the side of or (2) outside of . Besides = in addition to .

between; among. Between shows one-to-one connections , even when more than two things are involved . Among connotes a looser relationship with three or more .

blatant; flagrant. Blatant = obvious, overt . Flagrant = conspicuously rude or abusive .

bombastic = pompous, pretentious . The word has nothing to do with violence.

born; borne. See bear. breach; broach. Breach = to break or break though . Broach = to bring up .

can; may. Most properly, can expresses power or ability . May expresses 174

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permission or possibility .

canvas; canvass. Canvas = coarse cloth . Canvass = a noun meaning “a poll or survey” or a verb meaning “to conduct a poll or survey” .

capital; Capitol. Capitol = the building where the U.S. Congress or a state legislature meets. In all other senses, the spelling is capital .

censor; censure. Censor = to inspect and possibly restrict the release of matter judged to be objectionable. Censure = to reprimand someone.

clench; clinch. Clench = to tighten, esp. in anger or determination . Clinch = to secure or fasten .

climatic; climactic. Climatic = of the weather, esp. climate . Climactic = dramatic, riveting, moving toward a climax .

clinch. See clench. closure; cloture. Closure = the act or fact of concluding or resolving. Cloture = the parliamentary procedure for ending debate and calling for a vote. 175

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Appendix F

collaborate; corroborate. Collaborate = to cooperate in an enterprise . Corroborate = to lend support, esp. by confirming information .

common. See mutual. compare to; compare with. To compare something to something else is to liken the two things; to compare it with something else is to note both similarities and differences.

compel; impel. Compel = to force, esp. by dint of authority or necessity . Impel = to drive forward, as by circumstances or weight of argument .

compendious; voluminous. Compendious = concise, condensed. Voluminous = large, roomy.

complementary;

complimentary. Complementary

=

(1) making complete or perfect or (2) matching or harmonious . Complimentary = (1) free or (2) flattering .

comprise; compose. Comprise = to include . Compose = to make up . The phrase *is comprised of is always faulty.

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compulsive; compulsory. Compulsive = prone to or caused by uncontrollable urges . Compulsory = mandatory .

connote. See denote. consequent; subsequent. Consequent = following as a result (consequence) . Subsequent = following in time .

continual; continuous. Continual = recurring, intermittent . Continuous = ceaseless, uninterrupted .

convince; persuade. Convince . . . of = to win over, to prove a point . Persuade . . . to = convince and cause to take action .

corroborate. See collaborate. council; counsel. Council = a board . Counsel = (1) adviser , (2) advice , or (3) to advise .

credible; credulous; incredulous; creditable. Credible = believable, trustworthy . Credulous = gullible . Incredulous = 177

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Appendix F

unbelieving . Creditable = respectable but not outstanding .

damage; damages. Damage = harm . Damages = judicial compensation for harm .

declaim. See disclaim. definite; definitive. Definite = clear, explicit, unmistakable . Definitive = authoritative .

delegate. See relegate. deliberate; deliberative. Deliberate = purposeful . Deliberative = of or relating to debate or discussion .

denote; connote. Denote = to signify; to be the name of . Connote = to imply; to suggest something beyond the literal sense of a term .

depreciate; deprecate. Depreciate = to fall in value . Deprecate = to disapprove of, to plead against .

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detract; distract. Detract = take away (some quality) . Distract = divert .

device; devise. Device = a tool or apparatus . Devise = to create or invent .

different. Prefer different from over different than. differ from; differ with. To differ from is simply to be different ; to differ with is to disagree .

disburse. See disperse. disclaim; declaim. Disclaim = deny or disavow . Declaim = to orate .

discrete; discreet. Discrete = distinct . Discreet = circumspect, tactful .

disinterested; uninterested. Disinterested = unbiased; lacking any financial or emotional stake in a dispute . Uninterested = uncaring .

disperse; disburse. Disperse = to scatter . Disburse = to distribute funds .

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Appendix F

distinct; distinctive. Distinct = clear, well-defined . Distinctive = marking a difference, characteristic .

distract. See detract. dominant; dominate. Dominant = supreme . Dominate = to control .

eager. See anxious. effect. See affect. e.g.; i.e. E.g. = for example . I.e. = that is .

elicit; illicit. Elicit = to draw a response . Illicit = forbidden, illegal .

eligible; illegible. Eligible = fit to be chosen; suitable. Illegible = incapable of being read because of bad handwriting, poor printing, etc.

embarrass. So spelled. emend. See amend.

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eminent. See imminent. empathy; sympathy. Empathy = understanding . Sympathy = compassion .

ensure. See assure. equally. Avoid *equally as. Good usage dictates equally profitable, not *equally as profitable.

evoke; invoke. Evoke = to draw out . Invoke = to call on, esp. for authority or assistance .

explicit; implicit. Explicit = (1) unambiguous or (2) graphic, lurid . Implicit = (1) implied or (2) absolute .

farther; further. Farther = physically more distant . Further = more advanced .

faze; phase. Faze = to agitate . Phase = a stage of development .

fewer. See less.

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Appendix F

first, second, third. So written—preferably not *firstly, *secondly, *thirdly.

flagrant. See blatant. flair; flare. Flair = (1) an innate talent or (2) stylishness . Flare = a burst, as of light, activity, etc. .

flaunt; flout. Flaunt = to show off something . Flout = to openly disobey or disregard .

flounder; founder. Flounder = to struggle or thrash about . Founder = (1) to sink or (2) to fail .

forbear; forebear. Forbear = to refrain from an impulse . Forebear = an ancestor .

forgo; forego. Forgo = to do without . Forego = to precede .

formally; formerly. Formally = properly . Formerly = previously .

founder. See flounder. 182

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further. See farther. gibe; jibe. Gibe = a taunt or tease . Jibe = agree .

harass. So spelled. horde; hoard. Horde = large group of people . Hoard = a cache, esp. of valuable things . As a verb, to hoard is to accumulate to an excessive degree.

i.e. See e.g. if; whether. A fine but useful distinction: If = on the condition that. So, e.g., Let me know if you need a catalog means most rigorously not to call if you don’t want a catalog. Whether = which way you decide about. So Let me know whether you need a catalog means, again most rigorously, to please call either way.

illegible. See eligible. illicit. See elicit. illusion. See allusion. imminent; eminent. Imminent = looming and inevitable . Eminent = prominent and respected .

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Appendix F

impel. See compel. implicit. See explicit. imply; infer. Imply = to suggest something without saying it expressly . Infer = to read into .

in behalf of. See on behalf of. incredulous. See credible. infer. See imply. ingenious; ingenuous. Ingenious = clever, skillful . Ingenuous = frank, innocent, free of ulterior motive .

in order to. Usually you can shorten this expression to to. Do so whenever you can with no loss in clarity.

insure. See assure. invoke. See evoke. irritate. See aggravate. it’s; its. It’s = it is . Its = the possessive form of it . 184

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jibe. See gibe. just deserts (what one deserves) is so spelled—not *just desserts. Deserve and desert [pronounced /di-ZURT/] are related words.

lay > laid > laid. To lay is to put down or arrange .

lend; loan. Lend = to provide, to grant the temporary use of . Loan = a sum of money that has been lent . Though traditionally a noun, loan is also acceptable as a verb when the object is money .

less; fewer. Less = a smaller amount . Fewer = a smaller number .

lie > lay > lain. To lie is to recline .

like; as. Like precedes a noun or pronoun . As precedes a subject and verb .

loan. See lend. loathe; loath. Loathe is the verb meaning “to abhor” . Loath is the adjective meaning “reluctant” . 185

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Appendix F

loose; lose. Loose is an adjective meaning “not tight” or “not constrained” or a verb meaning “to free” . Lose, the verb , is often misspelled loose.

make do = to get by with . The phrase is often mistakenly rendered *make due.

marshal. Both the noun and the verb are so spelled.

may. See can. mete out = to allocate. So rendered, not *meet out. militate. See mitigate. minuscule = tiny . So spelled, not *miniscule.

mitigate; militate. Mitigate = to make less harsh . Militate = to weight heavily in one direction .

mutual; common. Mutual = reciprocal . Common = shared .

nonplussed = frozen by surprise, perplexed . 186

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A Primer of Good Usage

number. See quantity. obtain. See attain. obtuse; abstruse. Obtuse = dull, dim-witted . Abstruse = obscure, arcane .

on behalf of; in behalf of. On behalf of = representing . In behalf of = in support of .

orient; *orientate. Orient = to get one’s bearings . *Orientate is an ostentatious variant to be avoided.

past; passed. Past is the noun , adjective , adverb , and preposition . Passed is the past tense and past participle of the verb pass .

peak; peek; pique. Peak = a high point, esp. a pointed one such as a mountaintop or a spike on a chart . Peek = a quick, furtive look . Pique = (1) indignation or (2) to arouse .

peddle; pedal. Peddle = to sell . Pedal = to operate a foot lever .

peek. See peak. 187

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Appendix F

pejorative = having negative implications; tending to belittle. So spelled, not *perjorative.

pendant; pendent. Pendant = a piece of dangling jewelry . Pendent = pending, unsettled .

people. See persons. percent. This word (meaning “by the hundred”) was formerly spelled as two words. Today it is one.

perquisite; prerequisite. Perquisite = a privilege or benefit, esp. one attached to a position; usually shortened to perk . Prerequisite = a necessary condition .

persecute; prosecute. Persecute = treat harshly, esp. as a group . Prosecute = pursue legal action .

personal; personnel. Personal = an adjective meaning “private, individual.” Personnel = a noun meaning “the whole group of persons employed in a business.”

persuade. See convince. persons; people. In most contexts, the plural persons sounds stilted. Except for set phrases , reserve person for singular use and use people for the plural. 188

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A Primer of Good Usage

perspicuous; perspicacious. Perspicuous = lucid . Perspicacious = insightful, shrewd .

phase. See faze. pique. See peak. populace; populous. Populace = the inhabitants of a place, collectively . Populous = heavily populated .

pore; pour. To pore is to read intently . To pour is to make (a liquid) flow downward.

practical; practicable. Practical = pertaining to experience or actual use; adapted to useful action instead of to contemplation . Practicable = capable of being done or used .

precede; proceed. Precede = to occur before something else . *Preceed is a common misspelling. Proceed = (1) to start or (2) to continue .

precipitate; precipitous. Precipitate is most commonly a verb meaning “to cause suddenly or recklessly” . As an adjective, it means “sudden, rash, or 189

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Appendix F

violent” . Precipitous = steep .

prerequisite. See perquisite. prescribe; proscribe. Prescribe = to direct a course of action . Proscribe = to forbid or outlaw .

presumptive; presumptuous. Presumptive = assumed to be . Presumptuous = arrogant, impudent .

preventive; *preventative. Preventive = intended to ward off harm . *Preventative is a corrupt form.

principal; principle. Principal = main, first . As a noun, it refers to the main person or, in finance, the original sum of money lent or invested . Principle = a belief, tenet, or law .

proceed. See precede. prophesy; prophecy. Prophesy = to predict . Prophecy = the prediction .

proposition; proposal. Proposition = something that is offered for consideration . Proposal = a formal offer .

proscribe. See prescribe. prosecute. See persecute. prostrate; prostate. Prostrate = lying face down. Prostate = a gland in male mammals.

proved; proven. Proved = the long-preferred past participle of prove . An exception is the set phrase innocent until proven guilty. Proven is an adjective .

purpose. See intention. quandary = state of confusion , not the cause of that confusion.

quantity; number. Quantity = an unspecified mass . Number = a collection of individually countable objects .

rack. See wrack. rebut; refute. Rebut = to answer a charge or argument. Refute = to disprove a charge or argument. 191

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Appendix F

reek; wreak. Reek = (1) to stink or (2) the bad odor . Wreak = to cause a specified type of harm .

refute. See rebut. regrettable; regretful. Regrettable = unfortunate . Regretful = sorry about .

rein; reign. Rein = a bridle strap. Figuratively, the means of control . The homophone reign (= to rule over) is sometimes mistakenly used in those and similar idioms.

relegate; delegate. Relegate = to reassign to a lower position or task . Delegate = to entrust (a person) to act on one’s behalf .

reluctant. See reticent. respectfully; respectively. Respectfully = in a polite manner . Respectively = in regular order .

reticent; reluctant. Reticent = taciturn, not open about one’s thought; reluctant to talk . Avoid using it as a substitute for being reluctant to act.

role; roll. Role (in the sense “a part in an organization, a movie, etc.”) and roll (in the sense “a list of participants, actors, etc.”) are often confounded.

sanction = (1) a penalty or (2) an endorsement .

species; specie. Species = a type of plant or animal. The word is both singular and plural. Specie = coined money.

stanch. See staunch. stationary; stationery. Stationary = unmoving . Stationery = writing paper .

staunch; stanch. Staunch = loyal and devoted . Stanch = to stop or control the actual or figurative loss of liquid .

strait; straight. Strait = a tight spot . Straight often displaces strait in straitjacket and straitlaced.

strategy; tactics. Strategy = big-picture planning . Tactics = actions and techniques that 193

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Appendix F

support your strategy .

subsequent. See consequent. supersede = to take the place of . The word is often misspelled *supercede.

sympathy. See empathy. tactics. See strategy. than. See then. that; which. Use that to introduce a clause that’s essential to meaning (a restrictive clause), and don’t set it off with commas. If you write, “The departments that made their numbers last quarter received budget increases,” readers will infer that some departments didn’t receive increases. Use which with a clause that isn’t essential (a nonrestrictive clause). If you write, “The departments, which made their numbers last quarter, received budget increases,” you’re saying that all departments received increases. You can leave out a which clause set off by commas and still convey the gist of the sentence.

their. See there. then; than. Then = at that time; in that case; therefore. Than expresses comparison .

194

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A Primer of Good Usage

there; their; they’re. There refers to direction or place ; their is the possessive of they ; and they’re is the contraction of they are .

torpid. See turgid. toward; towards. Toward dominates in American English, towards in British English.

try and. Make it try to. turgid; torpid. Turgid = (1) swollen , or (2) bombastic . Torpid = dormant or sluggish .

uninterested. See disinterested. unique; unusual. Unique = one of a kind, unmatched . As an absolute term, unique should not take modifiers such as very. It is not a synonym of unusual.

use; utilize. Prefer the simple term. venal; venial. Venal = corrupt, susceptible to bribery . Venial = pardonable .

veracity; voracity. Veracity = truthfulness . Voracity = gluttony . 195

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Appendix F

verbiage = wordiness, not the words in a message. Excess verbiage is redundant. Avoid the misspelling *verbage.

vocation; avocation. Vocation = career . Avocation = (1) hobby or (2) second occupation .

voluminous. See compendious. voracity. See veracity. wangle. See wrangle. whether. See if. whether; whether or not. In most instances whether can stand alone: or not adds nothing. But when the sense is “regardless of whether,” the additional words are needed .

which. See that. who’s; whose. Who’s = who is. Whose = the possessive form of who or whom.

whosever; whoever’s. Whosever is the standard possessive form of whoever. Whoever’s is a contraction for whoever is.

workers’ compensation. This gender-neutral phrase has replaced workmen’s compensation as standard. 196

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A Primer of Good Usage

wrack; rack. Wrack = (1) to destroy or (2) wreckage . Rack = to torture as on a rack .

wrangle; wangle. Wrangle = to argue noisily . Wangle = to obtain by manipulation .

wreak. See reek. your; you’re. Your = possessive form of you. You’re = contraction of you are.

197

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Desk References Writing well is not just one skill but a combination of many—and it’s something you must constantly work at. In addition to this guide you might want to keep the following desk references handy.

The Basic Writer’s Bookshelf • The American Heritage Dictionary of the English Language. 5th ed. Boston: Houghton Mifflin Harcourt, 2011. • Garner, Bryan A. Garner’s Dictionary of Modern American Usage. 3d ed. New York: Oxford, 2009. • Merriam-Webster’s Collegiate Dictionary. 11th ed. Springfield, MA: Merriam-Webster, 2008. • Roget’s Thesaurus of English Words and Phrases. George Davidson, ed. Avon, MA: Adams Media, 2011. • Trimble, John R. Writing with Style. 3d ed. Upper Saddle River, NJ: Pearson, 2010.

199

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Desk References

The Connoisseur’s Bookshelf • Flesch, Rudolf. The Art of Plain Talk. New York: Harper & Brothers, 1946. • Flesch, Rudolf. How to Write Plain English: A Book for Lawyers and Consumers. New York: Harper & Row, 1979. • Fowler, H. W. A Dictionary of Modern English Usage. 2d ed. Edited by Ernest Gowers. New York: Oxford University Press, 1965. • Garner, Bryan A. Legal Writing in Plain English. 2d ed. Chicago: University of Chicago Press, 2012. • Gowers, Ernest. The Complete Plain Words. 3d ed. Edited by Sidney Greenbaum and Janet Whitcut. Boston: David R. Godine, 1986. • Graves, Robert, and Alan Hodge. The Reader over Your Shoulder. 2d ed. London: Cape, 1947. • Partridge, Eric. Usage and Abusage: A Guide to Good English. New York: Harper & Brothers, 1942. • Strunk, William, and E. B. White. The Elements of Style. 4th ed. Boston: Allyn & Bacon, 1999. • Tufte, Edward R. Beautiful Evidence. Cheshire, Conn.: Graphics Press, 2006. • Tufte, Edward R. Envisioning Information. Cheshire, Conn.: Graphics Press, 1990.

200

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Desk References

• Wallace, David Foster. Consider the Lobster. New York: Little, Brown & Co., 2005. • Zinsser, William. On Writing Well. New York: HarperCollins, 30th Ann. ed., 2006.

201

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Index

acronyms, 96–97 adverbs, 144–145, 147–148 all caps, 158, 167 Alred, Gerald J., 122 and, starting a sentence with, 83–84, 143–144 apostrophes, improper use of, 155–156, 160–161 appositives, 150–151, 156 Architect phase, 13–14, 16, 21–26, 140 articles, (a, an, the), don’t drop, 53 as per, 62, 111, 113 attached please find, 62 audience connecting with, 9–10 consideration for, 111–116, 123–124 for letters, 4–6 holding readers’ attention, 91–97 motivating to act, 116–118 nonspecialists, 44–45 perspective of, 43–44 understanding readers, 7–11 who you’re writing for, 8 Babenroth, A. Charles, 121–122 Bartholomew, Wallace E., 121

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Beautiful Evidence (Tufte), 37–38, 200 be verbs, 55, 94–95 bizspeak, 57–65 boilerplate, 62 boldface type, 158 brainstorming, 14–15, 20–21 brevity and clarity, xvi–xvii, 44–45, 49–51, 53–56, 106, 110 Brusaw, Charles T., 122 Buffett, Warren, 9, 63–65 bullets, as attention-getting device, 157–158 but, starting a sentence with, 83–84, 143–144 buzzwords, 57–61 Cannon, Kelly, 122 Carpenter phase, 13–14, 16, 23–25, 27–29, 140 Chicago Manual of Style, The, 15, 154 chronology, 67–70 Churchill, Winston, 91 clarity, 43–48, 53 clichés, 58–61 closing text, 32 Cody, Sherwin, 121 collegiality, 100–101

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Index

colons, 157, 159 commas, 148, 150–151, 154–155, 159–160 conclusions, leading readers to, 45 concrete writing, 47 conjunctions correlative, 147, 151 starting sentences with, 83–84, 143–144 connecting with large audiences, 9–10 continuity and transitions, 71–75, 143–144 contractions, 93 courtesy, 123–124 credibility, 47, 50, 77–78, 80–81 dates, 160, 166 definitions, 44–45 delivering bad news, 118–120 dialect, 81–82 diplomacy, 123–124 double negatives, 81–82 drafts e-mail, 107–110 feedback, 85–87 first, 16, 27–29, 32–35, 55 revising, 31–35 writing rapidly, 27–29 Drucker, Peter, 28 dumbing it down, 64–65 editing, 16–17, 28, 31–35 efficiency, 14–17 either, 79, 81, 146–147 Elements of Style, The (Strunk and White), 160, 200 e-mails BCC, 167 check before sending, 166 compared to letters, 46

general guidelines for, 105–110 storytelling, 67–70 subject line, 106, 167 em-dashes. See long dashes. emphasis, adding, 37–39, 157– 160 empty words, 9–10 enclosed please find, 111, 113, 121–122 Envisioning Information (Tufte), 37–38, 200 etiquette, business writing, 165–168 feedback from colleagues, 85–87 Flesch Reading Ease (FRE) scale, 63–64 Flesch, Rudolf, 64, 92, 200 Flowers, Betty Sue, 13 focus finding it, 19–25 “you” focus, 92–93, 108, 112, 115–116 fonts, 158, 167 forms of address, 165 Frailey, L.E., 122 FRE scale, 64 fund-raising, 118–119 genderless pronouns, 80–81 getting to the point, 7–8 good and well, 144–145, 163 grammar generally, 77–84 mistakes creating bad impressions, 163–164 passive voice, 94–95, 115–116 phrasal adjectives, 153–154 rules to know, 77–84, 143–151 granting a benefit or request, 122 graphics, 37–39

204

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Index

Harvard Law Review, 64 however, 83–84, 144, 148 Hurlbut, Floyd, 121 hyperformality compared to polished plain speech, 61, 99–100 hyphens, 153–54, 158–159 impressions, bad, 163–164 “index expurgatorius,” 57–61 inspiration, 28 -ion words, 55 issues, stating plainly, 3, 49–50, 126–27, 129 italic type, for emphasis, 156, 158 Judge phase, 13–14, 16–17, 28, 141 letters as a tool for sharpening writing skills, 46 chronology in, 67–70 form and purpose, 3–6 general guidelines for, 111–124 replying to, 167 salutations, 159, 165 signature, 165–166 when to write and when not to write, 167–168 logic, 16, 19–20 long dashes, uses for, 159–160 MACJ, 13–14, 28 Madman phase, 13–16, 20–21, 139 Madman–Architect–Carpenter– Judge, 13–14 main points, 19–25 marketing reports, 129–130 memos, 8, 20–25, 32–35, 125–130 middle, 32

mistakes, admitting, 124 motivating readers, 116–118 neither, 79–81, 146–147, 151 nonstandard language, 82–84 notes, making, 15 nouns disagreement with pronouns, 80–81 plural, 155–156 of, 54–55 Oliu, Walter E., 122 opening text, 32, 49–50, 71–74 opinions, unsupported, 45, 47 organizing chronology, 67–70 main points/issues and logic, 19–25 outlining, 16, 50 sets of three, 19–25 subheads, 74 otherwise, 148 outlining, 16, 50 padding, recognizing and eliminating, 53–56 paragraph openers, 71–72 passive voice, 94–95, 115–116 performance appraisals, 133–138 persuasiveness, xviii–xix, 47, 112 phrasal adjectives, hyphenating, 153–154 phrases canned, 62, 111, 113, 121–122 creating bad impressions, 163–164 overused, 58–61 for performance reviews, 133–137 plagiarism, 15

205

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Index

plain-spoken language, importance of, 57–65 planning your writing project, 13–16, 19–25 polishing your writing, 14, 16–17, 61, 86 possessives, 160–161 predicates, compound, 154–155 prefixes, hyphenating, 158–159 prepositions, 54, 79, 144, 145, 146–147 prior to, 53 process of writing, 13–17, 19–25, 27–29 procrastination, 28–29 pronouns errors in using, 77–78, 80–81 personal, 92–93 relative, 149–150 punctuation, basic rules of, 148, 150, 153–161 purpose for writing, 3–6 quotation marks, for emphasis, 158 readers. See also audience nonspecialist, 9, 44–45 perspective, 43–44, 51, 68–69, 119 three types for memos, 127 time constraints, 7–8 understanding, 7–10 Reader’s Digest, 64 reason for writing. See purpose for writing recommendations, 129–130 rejection, 118–119 relative pronouns, 149–150 reports, tips on writing, 125–131 reprimand by e-mail, 109–110

requests for proposal, 8 research, 14–16, 128–129 reviews, employee. See performance appraisals revising general guidelines for, 31–35 continuity and transitions, 71–75 salutations, punctuation following, 159 sarcasm, 101 semicolons, 148, 154–155, 159 sentences compound subjects, 79–80, 145–146 conjunctions at beginning of, 83–84, 143–144 length of, 44–45, 63–65, 95–96 noun–pronoun disagreement, 80–81 prepositions at end of, 144 pronouns, 77–78, 80–81, 92–93 starters, 83–84, 143–144 structure, 95–96 subject–verb disagreement, 78–80, 81, 145–147 “show, don’t tell,” 45, 47 signature, 107, 165–166 simplicity and clarity in language, 43–48, 53–55, 57–65, 91, 94 sources, 15 speed writing, 27 split infinitives, 149 standard English, 82–83 starting to write, 13–17, 19–25 storytelling and chronology, 67–70 Strunk, William, Jr., 160–161, 200 style, how to acquire good, xviii–xix subheads, 74

206

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Index

subject lines, 106, 125–126, 167 subject–verb agreement, 78–80, 81, 145–147 summarizing, 49–51, 74, 126–128 thank you in advance, 167 thank-you notes, 166, 167 that, 53, 149–150, 194 there, 78–79, 195 their, 80–81, 195 therefore, 73, 74, 148 third person, 92–93, 115–116 Time (magazine), 64 time management, 27–29, 31 titles, 125–126 tone collegial, 100–101 combative, 123 courteous and direct, 123–124 in e-mails, 107–110 friendly, 4, 8 hyperformality, 99–100 purpose and content, 4–6, 8 relaxed, 99–100 sarcasm, 101 stern, 5–6 urgent, 4–5 transitions and continuity, 71–75 Tufte, Edward, 37–38, 200 underlining, 158 U.S. Securities and Exchange Commission’s Plain English Handbook, 9 usage bad examples of, 163–164 good, 169–197 vagueness, 43–47, 49–50 verbs buried, 55

irregular, 83 past-tense, 94 separating the grammatical subject from, 156–157 split infinitives, 149 strong, 55 verb phrases, 148–149 visual aids, 37–39, 140 vocabulary, 82 Washington, George, 91 we, 78, 92, 100, 115–116 well, 144–145, 163 which, 149–151, 194 White, E. B., 160–161, 200 White, Richard Grant, 121 white space in document design, 166 who, 149–51, 161, 196 “who, what, when, where, and why,” 38, 50 wordiness, controlling, 53–56 wording, problems with, 77–84 words, wasting of, 53–56 writer’s block, 16, 25, 28 writing anxiety about, 13–15 benefits of good writing, xv–xx etiquette in, 165–168 four stages checklist for, 139–141 how to begin, 13–17, 19–25 muddy, 43 process of, 13–17, 19–25, 27–29 purpose of, 3–6 rapidly, 27–29 style, 91–97, 99–100 timing, 27 “you” focus, 92–93, 108, 112, 115–116

207

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Acknowledgments

My profound gratitude goes to Lisa Burrell of HBR, who suggested and edited the book through several revisions; to the LawProse employees Heather C. Haines, Becky R. McDaniel, Tiger Jackson, Jeff Newman, David Zheng, and Ryden McComas Anderson—all of whom helped in developing and refining the text; my Twitter followers (I’m @bryanagarner) who suggested examples of bizspeak to be avoided; my mother-in-law Sandra W. Cheng, her brother Daniel Wu, and my sister-in-law Linda Garner, all of whom suggested lines of inquiry from their many years in business; and most of all my wife, Karolyne H.C. Garner, who cheered and goaded and inspired me in the months when this book was being written—as she has before and since. The book is dedicated to J.P. Allen, the filmmaker, who has been my close friend from childhood (I was 5, he was 3): We developed our interest in language and writing as teenagers, while also reading intensively about entrepreneurship and business management—never worrying that we might be considered nerds or eggheads. We

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Acknowledgments

always thought learning was cool, and ignorance uncool. Nothing has changed. B.A.G. August 2012

210

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About the Author

Bryan A. Garner is a noted lexicographer, grammarian, lawyer, and business owner. Since founding LawProse Inc. in 1991, he has trained more than 150,000 lawyers in the techniques of written persuasion and effective contract drafting. His clients include the legal departments of dozens of Fortune 500 companies. Garner is the author of Garner’s Modern American Usage, The Elements of Legal Style, and The Winning Brief, and the editor in chief of all in-print editions of Black’s Law Dictionary. He has coauthored two best-selling books about judicial decision-making with Justice Antonin Scalia.

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Notes

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Notes

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Notes

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Notes

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Notes

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Notes

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Smarter than the average guide

Hbr Guide to Getting The Right Work Done Stay focused Accomplish more Manage your energy

HBR Guide to Getting the Right Work Done

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Harvard Business Review Guides Arm yourself with the advice you need to succeed on the job, from the most trusted brand in business. Packed with how-to essentials from leading experts, the HBR Guides provide smart answers to your most pressing work challenges.

The titles include: HBR Guide to Better Business Writing HBR Guide to Finance Basics for Managers HBR Guide to Getting a Job HBR Guide to Getting the Mentoring You Need HBR Guide to Getting the Right Work Done HBR Guide to Giving Effective Feedback HBR Guide to Making Every Meeting Matter HBR Guide to Managing Stress HBR Guide to Managing Up and Across HBR Guide to Persuasive Presentations HBR Guide to Project Management

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HBR Guide to Getting the Right Work Done

HARVARD BUSINESS REVIEW PRESS Boston, Massachusetts

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Find more digital content or join the discussion on www.hbr.org. The web addresses referenced and linked in this book were live and correct at the time of the book’s publication but may be subject to change. Copyright 2012 Harvard Business School Publishing Corporation All rights reserved No part of this publication may be reproduced, stored in or introduced into a retrieval system, or transmitted, in any form, or by any means (electronic, mechanical, photocopying, recording, or otherwise), without the prior permission of the publisher. Requests for permission should be directed to [email protected], or mailed to Permissions, Harvard Business School Publishing, 60 Harvard Way, Boston, Massachusetts 02163. Library of Congress Cataloging-in-Publication Data HBR guide to getting the right work done. p. cm. ISBN 978-1-4221-8711-1 (alk. paper) 1. Time management. 2. Decision making. I. Harvard Business Review Press. II. Title: Harvard Business Review guide to getting the right work done. III. Title: Guide to getting the right work done. HD69.T54.H374 2012 650.1'1—dc23 2012012383

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What You’ll Learn

Are you paralyzed by the pile of projects on your plate? Has fear of delegation buried you in administrivia? Is your focus destroyed by the incessant call of e-mail and Twitter? Do you leave work exhausted—but with little to show for it? Are promotions passing you by because your peers are more productive? You can’t possibly tackle every task that awaits you. But here’s the good news: You can learn to get the right work done, focusing your time and energy where it’ll yield the greatest reward—for you and your organization. This guide will help by offering a range of accessible tools so you can sample them and see what works for you. You’ll get better at: • Prioritizing • Staying focused • Working less but accomplishing more • Stopping bad habits and developing good ones • Writing to-do lists that work

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What You’ll Learn

• Breaking overwhelming projects into manageable pieces • Thwarting e-mail overload • Refueling your energy

vi

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Contents

Section 1: GET STARTED 1. You Can’t Get It All Done

3

. . . so what should you do? BY PETER BREGMAN

2. Nine Things Successful People Do Differently

9

It’s not who you are; it’s what you do BY HEIDI GRANT HALVORSON

3. Being More Productive: An Interview with David Allen and Tony Schwartz

23

Do you need the right system or the right frame of mind? BY DANIEL MCGINN

Section 2: PRIORITIZE YOUR WORK 4. Get a Raise by Getting the Right Work Done

35

Focus on the work that will bring the greatest reward—for your organization and for you BY PETER BREGMAN

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Contents

5. The Worth-Your-Time Test

39

Stop wasting time on the wrong work BY PETER BREGMAN

6. Say Yes to Saying No

43

Make it easier to decline projects and invitations BY ALEXANDRA SAMUEL

Section 3: ORGANIZE YOUR TIME 7. A Practical Plan for When You Feel Overwhelmed

49

How to get started when you don’t know where to begin BY PETER BREGMAN

8. Stop Procrastinating—Now

53

Five tips for breaking this bad habit BY AMY GALLO

9. Don’t Let Long-Term Projects Become Last-Minute Panic

57

What to do when you have “all the time in the world” BY PETER BREGMAN

10. Stop Multitasking

63

Do just one thing to get many things done BY PETER BREGMAN

11. How to Stay Focused on What’s Important

69

Stop fighting fires BY GINA TRAPANI

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Contents

12. To-Do Lists That Work

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The secret is specificity BY GINA TRAPANI

13. How to Tackle Your To-Do List

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Use your calendar BY PETER BREGMAN

14. Reward Yourself for Doing Dreaded Tasks

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When crossing items off your list just isn’t enough BY ALEXANDRA SAMUEL

Section 4: DELEGATE EFFECTIVELY 15. Management Time: Who’s Got the Monkey?

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Delegate, Delegate, Delegate BY WILLIAM ONCKEN, JR., AND DONALD L. WASS, WITH COMMENTARY BY STEPHEN R. COVEY

16. Levels of Delegation

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Teach them to fish BY LINDA A. HILL AND KENT LINEBACK

Section 5: CREATE RITUALS 17. Ritual: How to Get Important Work Done

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Make good habits automatic BY TONY SCHWARTZ

18. Power Through Your Day in 90-Minute Cycles

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Work with your body’s natural rhythms BY TONY SCHWARTZ

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Contents

19. An 18-Minute Plan for Managing Your Day

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Frequent check-ins with yourself will keep you on course BY PETER BREGMAN

20. Use a 10-Minute Diary to Stay on Track

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The best way to spend the last few minutes of your day BY TERESA AMABILE AND STEVEN KRAMER

Section 6: RENEW YOUR ENERGY 21. How to Accomplish More by Doing Less

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Take breaks to get more done BY TONY SCHWARTZ

22. Manage Your Energy, Not Your Time

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Time is limited, but your energy is not BY TONY SCHWARTZ AND CATHERINE MCCARTHY

23. Why Great Performers Sleep More

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. . . and how you can, too BY TONY SCHWARTZ

Section 7: TAKE CONTROL OF YOUR E-MAIL 24. Simplify Your E-mail

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Three folders will do it BY GINA TRAPANI

25. Eight E-mail Overload Experiments

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Don’t be afraid to be extreme BY ALEXANDRA SAMUEL

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Contents

Section 8: MAINTAIN YOUR NEW APPROACH 26. Sustaining Your Productivity System

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You’ve become productive! Now keep it up BY ALEXANDRA SAMUEL

Section 9: EXPLORE FURTHER 27. More Productivity Books to Explore

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Summaries of three popular titles by Covey, Morgenstern, and Allen BY ILAN MOCHARI

28. Productivity Apps and Tools

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Tech tools to keep you on track

Index

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Section 1

Get Started

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Chapter 1

You Can’t Get It All Done by Peter Bregman

Brad is as hard a worker as anyone I know. (Names and some details have been changed.) He’s not just busy, he’s keenly focused on getting the right things done. And it pays off—he is the largest single revenue generator at his well-known professional services firm. A few days before Thanksgiving, Brad flew from Boston to Los Angeles with his family. During the five-hour flight, he decided not to use the plane’s Internet access, choosing to play with his children instead. A five-hour digital vacation. When they landed, Brad turned on his BlackBerry and discovered that a crisis had developed while he was in the air. He had close to five hundred new e-mail messages. So much for a digital vacation. The truth is, we can’t really get away from it. There’s no escaping the nonstop surge of e-mail, text, voice

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mail, Twitter, Facebook, LinkedIn—and that’s just the technology-based stream. How can we ever catch up? We can’t. The idea that we can get it all done is the biggest myth in time management. There’s no way Brad can meaningfully go through all his e-mail, and there’s no way any of us are going to accomplish everything we want to. Face it: You’re a limited resource. On the one hand, that’s depressing. On the other hand, acknowledging it can be tremendously empowering. Once we admit that we aren’t going to get it all done, we’re in a much better position to make explicit choices about what we are going to do. Instead of letting things haphazardly fall through the cracks, we can intentionally push the unimportant things aside and focus our energy on the things that matter most. That’s what this guide is all about. There are two main challenges in doing the right things: identifying what they are and then doing them. To determine the “right things,” we need to make choices that will move us toward the outcomes we most want. Which, of course, means we need to know what our priorities are. In terms of the second challenge—the “doing” or follow-through—we need tools. Rituals. To-do lists. Delegation skills. But which tools will work best for you? Which rituals will help you follow through? You might be the kind of person who can read through a book like this, full of great advice, and implement it all at once. I am not. I get overwhelmed and end up not changing anything.

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You Can’t Get It All Done

So, here’s one way to use this guide:

1. Identify your time management challenges. Do you leave the office with a nagging feeling that you worked all day but didn’t get your most important work done? Are you distracted by little things? Avoiding big, hairy projects? Take this three-minute quiz (see “How well do you manage distraction?”) to discover where you’re distracting yourself the most. 2. Find one piece of advice you think will have the greatest impact on your work. Once you’ve identified your biggest challenges, read through this guide and find a tip that speaks to you. Maybe you’re not clear on your “right things.” Maybe the rituals you’re using aren’t working. Maybe you procrastinate. Choose one tactic you think will help you the most. Then do that one thing. 3. Do it again. Once that tactic has had an impact on your work, repeat the process. Return to this guide and select another tip. Because Brad is a paragon of productivity, he decided to put his BlackBerry away and wait to reply to the messages until he was in his hotel room. Then, using his laptop, he attacked the crisis: called his client to allay their concerns, delegated tasks to his team, and sent an e-mail to his team and his client detailing the plan. Within an hour, he had finished, shut his laptop, left his BlackBerry in his room, and enjoyed a fun, chaos-filled dinner with

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© PeterBregman.com. All Rights Reserved. Reprinted with permission.

1. Even though it feels like I work nonstop all day, I still don’t get the most important things done. 2. No matter what I intend to focus on at the beginning of the day, as soon as I start working (checking e-mail, etc.), I seem to get derailed and lose my focus. 3. When I have something important and challenging I want to accomplish, I spend my time doing lots of little things and avoiding the big one. 4. When my work gets challenging, I somehow keep interrupting myself by surfing the Web, doing e-mail, and other distractions. 5. When I’m on a conference call, I get bored and start multitasking until I miss something important; then I try to recover without making it obvious that I wasn’t paying attention. 6. I’m late for meetings and appointments because I try to get one more thing done instead of leaving enough time for preparation and/or travel. 7. I feel overwhelmed and stressed out by the number of things I have to do. 8. My work day ends in frustration as I think about all the things I intended to accomplish but didn’t. 9. When I try to make space for my own work, I get interrupted by others and I find it hard to protect my time. 10. I don’t spend enough time at work in my “sweet spot” (doing work I’m really good at and enjoy the most).

How well do you manage distraction?

TABLE 1-1

Occasionally Occasionally Occasionally Occasionally Occasionally Occasionally Occasionally Occasionally Occasionally Occasionally

Never Never Never Never Never Never Never Never Never Never

Often

Often Often Often

Often

Often

Often

Often

Often Often

Always

Always Always Always

Always

Always

Always

Always

Always Always

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This quiz is derived from Peter’s book, 18 Minutes: Find Your Focus, Master Distractions, and Get the Right Things Done. For free 18 Minutes tools and resources (including an online version of this quiz offering more detailed results and feedback), visit http://www.peterbregman.com.

If you selected mostly “Always,” you need help. But you know that, because you bought this guide, so you’re already on the path to productivity. Pick your biggest pain point and start there, then return to the Guide as often as you need to.

If you selected mostly “Often,” you could use a process to help you get and stay focused on the right work. Resist the allure of “urgent” projects to focus on the work with the greatest long-term rewards. Learn how to craft the most useful to-do lists so that you can power through them and leave work feeling a sense of accomplishment.

If you selected mostly “Occasionally,” you’re doing pretty well. Perhaps willpower or delegating is helping you focus on getting the right work done. But there’s even more you could be doing to boost your productivity. Perhaps you haven’t experimented with rituals. Perhaps your obsession with e-mail is derailing you. Read on to discover new ideas about how you can get even more of the right work done.

If you selected mostly “Never,” congratulations! You’re already doing a great job of focusing on the work that will give you—and your organization—the highest reward. You likely already have rituals and tactics that make you productive. Look to this guide for some new tips and ideas to expand your collection of productivity tools.

Guide to scores

Score yourself Number of checks in: Never ____ Occasionally ____ Often ____ Always ____

Get Started

his family—which, at that time, was precisely the right thing for him to do.

Peter Bregman is a strategic adviser to CEOs and their leadership teams. His latest book is 18 Minutes: Find Your Focus, Master Distraction, and Get the Right Things Done.

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Chapter 2

Nine Things Successful People Do Differently by Heidi Grant Halvorson

Why have you been so successful in reaching some of your goals, but not others? If you aren’t sure, you’re far from alone. Even brilliant, highly accomplished people are pretty lousy when it comes to understanding why they succeed or fail. The intuitive answer—that you’re born predisposed to certain talents and lacking in others— is really just one small piece of the puzzle. In fact, decades of research on achievement suggest that successful people reach their personal and professional goals not

Excerpted with permission from Nine Things Successful People Do Differently (product #11065).

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simply because of who they are, but more often because of what they do. What follows are the nine things that successful people do—the strategies they use to set and pursue goals (sometimes without consciously realizing it) that have the biggest impact on performance.

1. Get Specific When you set a goal, be as specific as possible. “Lose five pounds” is a better goal than “lose some weight,” because it gives you a clear idea of what success looks like. Knowing exactly what you want to achieve keeps you motivated until you get there. Also, consider the specific actions you’ll need to take to reach your goal. Promising you’ll “eat less” or “sleep more” is too vague. “I’ll be in bed by 10 pm on weeknights” leaves no doubt about what you need to do, and whether or not you’ve actually done it. Spelling out exactly what you want to achieve removes the possibility of settling for less—of telling yourself that what you’ve done is “good enough.” It also makes your course of action clearer. Instead of “getting ahead at work,” make your goal more concrete, such as “a pay raise of at least $ ____” or “a promotion to at least the ____ level.” To be successful, you also need to get specific about the obstacles you may encounter. In fact, what you really need to do is go back and forth, thinking about the success you want to achieve and the steps it will take to get there. This strategy is called mental contrasting, and it’s a remarkably effective way to set goals and strengthen your commitment.

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Nine Things Successful People Do Differently

To use the mental contrasting technique, first imagine how you’ll feel attaining your goal. Picture it as vividly as you can—really consider the details. Next, think about the obstacles in your way. For instance, if you wanted to get a better, higher-paying job, you would start by imagining the sense of pride and excitement you would feel accepting a lucrative offer at a top firm. Then you would think about what stands between you and that offer— namely, all the other really outstanding candidates. Kind of makes you want to polish up your résumé a bit, doesn’t it? That’s called experiencing the necessity to act; it’s a state that’s critical for reaching your goal, because it gets the psychological wheels in motion. Mental contrasting turns wishes and desires into reality by bringing attention and clarity to what you will need to do to make them happen.

2. Seize the Moment to Act on Your Goals Given how busy most of us are and how many things we’re juggling at once, it’s not surprising that we routinely miss opportunities to act on a goal. Did you really have no time to work out today? No chance at any point to return that phone call? To seize the moment, decide when and where you’ll take action, in advance. Be specific (“If it’s Monday, Wednesday, or Friday, I’ll work out for thirty minutes before work”). Studies show that this if-then planning helps your brain to detect and take advantage of the

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opportunity when it arises, increasing your chances of success by roughly 300 percent. (For more on planning when and where you’ll perform tasks, see “How to Tackle Your To-Do List,” later in this guide.) Deciding in advance when and where you will take specific actions to reach your goal (or how you will address obstacles you might encounter) is probably the most effective single thing you can do to ensure your success. If-then plans take the form: If X happens, then I will do Y. For example: If I’m getting too distracted by colleagues, then I’ll stick to a five-minute chat limit and return to work. Why are these plans so effective? Because they’re written in the language of your brain—the language of contingencies. Humans are particularly good at encoding and remembering information in “if X, then Y” terms, and using these contingencies to guide their behavior, often below their level of awareness. Once you’ve formulated your if-then plan, your unconscious brain will start scanning the environment, searching for the situation in the “if ” part of your plan. This enables you to seize the critical moment (“Oh, it’s 4 pm! I’d better return those calls!”), even when you’re busy doing other things. Since you’ve already decided exactly what you need to do, you can execute the plan without having to consciously think about it.

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3. Know Exactly How Far You Have Left to Go Achieving any goal also requires honest and regular monitoring of your progress—if not by others, then by you yourself. If you don’t know how well you’re doing, you can’t adjust your behavior or your strategies accordingly. Check your progress frequently—weekly, or even daily, depending on the goal. Feedback helps motivate us because we subconsciously tune in to the presence of a discrepancy between where we are now and where we want to be. When your brain detects a discrepancy, it reacts by throwing resources at it: attention, effort, deeper processing of information, and willpower. If self-monitoring and seeking out feedback are so important, you may be wondering why we don’t always do it. The first and most obvious reason is that it’s effortful; you need to stop whatever else you’re doing and really focus on assessment. And of course, the news isn’t always positive; sometimes we avoid checking in on our progress because we don’t want to acknowledge how little progress we’ve made. Self-monitoring requires a lot of willpower, but you can make it easier by using if-then planning to schedule your self-assessments. Done the right way, assessing your progress will keep you motivated from start to finish. Done the wrong way, it may actually lower your motivation. Recent research by University of Chicago psychologists Minjung Koo and Ayelet Fishbach examined how people pursuing goals were affected by focusing on either how far they had al-

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ready come (to-date thinking) or what was left to be accomplished (to-go thinking). Koo and Fishbach’s studies consistently show that when we’re pursuing a goal and consider how far we’ve already come, we feel a premature sense of accomplishment and begin to slack off. When we focus on progress made, we’re also more likely to try to achieve a sense of “balance” by making progress on other important goals. As a result, we wind up with lots of pots on the stove, but nothing is ever ready to eat. If, instead, we focus on how far we have left to go (to-go thinking), motivation is not only sustained, it’s heightened. So when you’re assessing your progress, stay focused on the goal and never congratulate yourself too much on a job half-done. Save it for a job well—and completely—done.

4. Be a Realistic Optimist When you’re setting a goal, by all means engage in positive thinking about how likely you are to achieve it. Believing in your ability to succeed is enormously helpful for creating and sustaining your motivation. But don’t underestimate the time, planning, effort, and persistence it will take to reach your goal. Thinking things will come to you easily and effortlessly leaves you ill prepared for the journey ahead and can significantly increase the odds of failure. This is the difference between being a realistic optimist and an unrealistic optimist.

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Realistic optimists believe they will succeed, but also believe they have to make success happen—through things like planning, persistence, and choosing the right strategies. They recognize the need for considering how they’ll deal with obstacles. Unrealistic optimists, on the other hand, believe that success will happen to them—that the universe will reward them for their positive thinking. Cultivate your realistic optimism by combining a positive attitude with an honest assessment of the challenges that await you. Don’t just visualize success; visualize the steps you will take in order to make success happen. If your first strategy doesn’t work, what’s plan B? (This is another great time to use your if-then plans.) Remember, it’s not “negative” to think about the problems you are likely to face—it’s foolish not to.

5. Focus on Getting Better, Rather Than Being Good Believing you have the ability to reach your goals is important, but so is believing you can get the ability. Many of us believe that our intelligence, personality, and physical aptitudes are fixed—that no matter what we do, we won’t improve. As a result, we focus on goals that are all about proving ourselves, rather than developing and acquiring new skills. Fortunately, abilities of all kinds are profoundly malleable. Embracing the fact that you can change will allow you to make better choices and reach your fullest potential. People whose goals are about getting better,

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rather than being good, take difficulty in stride and appreciate the journey as much as the destination. How can you motivate yourself to approach new responsibilities with confidence and energy? The answer is simple, though perhaps a little surprising: give yourself permission to screw up. I know this may not be something you’re thrilled to hear, because you’re probably thinking, if you screw up you’ll be the one to pay for it. But you needn’t worry, because when people feel they’re allowed to make mistakes, they’re significantly less likely to actually make them! People approach any task with one of two types of goals: what I call be-good goals, where the focus is on proving that you have a lot of ability and already know what you’re doing, and get-better goals, where the focus is on developing ability and learning to master a new skill. The problem with be-good goals is that they tend to backfire when we’re faced with something unfamiliar or difficult. We quickly start feeling that we don’t actually know what we’re doing, that we lack ability—and this creates a lot of anxiety. And nothing interferes with performance quite like anxiety does; it is the productivity killer. Get-better goals, on the other hand, are practically bulletproof. When we think about what we’re doing in terms of learning and mastering—accepting that we may make some mistakes along the way—we stay motivated despite setbacks that might occur. A focus on getting better also enhances the experience of working; we naturally find what we do more interest-

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Nine Things Successful People Do Differently

ing and enjoyable when we think about it in terms of progress, rather than perfection. Finding what you do interesting and believing it has inherent value is one of the most effective ways to stay motivated despite unexpected roadblocks. In fact, interest doesn’t just keep you going despite fatigue; it actually replenishes your energy.

6. Have Grit Grit is a willingness to commit to long-term goals and to persist in the face of difficulty. Gritty people obtain more education in their lifetimes and earn higher college GPAs. Grit predicts which cadets will stick out their first grueling year at West Point. In fact, grit even predicts how far contestants at the Scripps National Spelling Bee will go. The good news is that if you aren’t particularly gritty now, you can do something about it. People who lack grit often believe that they just don’t have the innate abilities successful people have. If that describes your own thinking, you’re wrong. As I mentioned earlier, effort, planning, persistence, and good strategies are what it really takes to succeed. Embracing this knowledge will not only help you see yourself and your goals more accurately, but also do wonders for your grit. Study after study of successful people, whether they are athletes, musicians, or mathematicians, shows that the key to success and enhanced ability is deliberate practice—thousands of hours spent mastering the necessary skills and knowledge. Grit is all about not giving up in the face of difficulty, even when you’re tired or discouraged. And the best predictor of not giving up is how we explain that difficulty in

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the first place. When you’re having a hard time, what do you blame? Entity theorists, who are convinced that ability is fixed, tend to blame setbacks on a lack of ability. If this is hard for me, I must not be good at it. As a result, they lack grit; they give up on themselves way too soon, inadvertently reinforcing their misconception that they can’t improve. Incremental theorists, on the other hand, tend to blame setbacks on more controllable factors—insufficient effort, using the wrong strategy, poor planning. When faced with difficulty, they try harder, armed with the belief that improvement is always possible. This gritty attitude leads to far greater long-term accomplishments. Change really is always possible, and the science here is crystal clear. There is no ability that can’t be developed with experience. The next time you find yourself thinking, “But I’m just not good at this,” remember: You’re just not good at it yet.

7. Build Your Willpower Muscle Our self-control “muscle” is just like others in your body; when it doesn’t get much exercise, it becomes weaker over time. But when you give it regular workouts, it will grow stronger and help you reach your goals. To build willpower, take on a challenge that requires you to do something you’d rather not do. Give up highfat snacks, do a hundred sit-ups a day, try to learn a new skill. When you find yourself wanting to give in or give up—don’t. Start with just one activity and make a plan

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for how you’ll deal with troubles when they occur (“If I want a snack, I’ll eat one piece of fresh or three pieces of dried fruit”). It will be hard in the beginning, but it will get easier, and that’s the whole point. As your strength grows, you can take on more challenges and step up your self-control workout. Like biceps or triceps, willpower can vary in its strength, not only from person to person, but from moment to moment. The good news is that willpower depletion is only temporary. Give your muscle time to bounce back, and you’ll be back in fighting form. When rest is not an option, you can accelerate your recovery simply by thinking about people you know who have a lot of self-control. Or, you can try giving yourself a pick-me-up. Anything that lifts your spirits—listening to a favorite song, calling a good friend, or reflecting on a past success—should also help restore your self-control when you’re looking for a quick fix.

8. Don’t Tempt Fate No matter how strong your willpower muscle becomes, it’s important to always respect the fact that it’s limited, and if you overtax it, you will temporarily run out of steam. Don’t try to take on two challenging goals at once, if you can help it (like quitting smoking and dieting). And make achieving your goal easier by keeping yourself out of harm’s way. Many people are overly confident in their ability to resist temptation, and as a result they put themselves in situations where temptations abound. Suc-

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cessful people know not to make reaching a goal harder than it already is. Resisting temptation is a key part of successfully reaching just about any goal. What we want to do is often the very opposite of what we need to do. This may sound a bit counterintuitive, but the very first thing you’re going to want to do if you’re serious about resisting temptation is make peace with the fact that your willpower is limited. Even if you’ve built up large reserves of willpower, you won’t have much left for sticking to your resolutions at the end of a long day of putting out fires at work. That’s why it’s so important to give some thought to when you’re most likely to feel drained and vulnerable and make an if-then plan to keep yourself out of harm’s way. It’s far easier to abstain from doing something all together than it is to give in just a little and then stop. And you need more and more self-control to stop a behavior the longer it goes on. If you don’t want to eat the entire slice of cake, don’t take “just one bite.”

9. Focus on What You Will Do, Not What You Won’t Do Do you want to get promoted, quit smoking, or put a lid on your bad temper? Then plan how you’ll replace counterproductive behaviors with more constructive ones. Too often, people concentrate all their efforts on what they want to stop doing and fail to consider how they will fill the void. Trying to avoid a thought can make it more active in your mind (“Don’t think about white bears!”). The same holds true when it comes to behavior; by trying

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not to do something, you strengthen rather than diminish the impulse. If you want to change your ways, ask yourself, “What will I do instead?” For example, if you’re trying to gain control of your temper, you might make a plan such as, “If I’m starting to feel angry, then I’ll take three deep breaths to calm down.” By using deep breathing as a replacement for giving in to your anger, your success-sabotaging impulse will get worn away over time until it disappears completely. Once you’ve decided to make an if-then plan to help you reach your goal, the next thing you need to do is figure out how to construct it. There are three types of if-then plans: • “Replacement” if-then plans do just what the name suggests—replace a negative behavior with a more positive one (as in the anger management strategy just described). • “Ignore” if-then plans are focused on blocking out unwanted feelings, like cravings, performance anxiety, or self-doubts. (“If I have the urge to smoke, then I’ll ignore it.”) • Finally, “negation” if-then plans involve spelling out the actions you won’t be taking in the future. With these plans, if there is a behavior you want to avoid, you simply plan not to perform this behavior. (“If I am at the mall, then I won’t buy anything.”) Of all three types, replacement plans are most successful. When it comes to reaching your goals, focusing on what

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you will do, not what you won’t do, is the most effective way to achieve them.

Heidi Grant Halvorson, PhD, is a motivational psychologist and author of the HBR Single Nine Things Successful People Do Differently (Harvard Business Press, 2011) and the book Succeed: How We Can Reach Our Goals (Hudson Street Press, 2011). Her personal blog, The Science of Success, can be found at http://www.heidigranthalvorson .com/.

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Chapter 3

Being More Productive An Interview with David Allen and Tony Schwartz by Daniel McGinn

David Allen is a productivity consultant and the author of the best seller Getting Things Done, which outlines the list-driven efficiency system adherents call by its acronym: GTD. Tony Schwartz, the author of the bestseller Be Excellent at Anything, is the CEO of The Energy Project, which helps people and organizations fuel engagement and productivity by drawing on the science of high performance.

Excerpted from Harvard Business Review, May 2011 (product # R1105D).

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In this edited conversation with HBR, they discuss the distractive pull of e-mail, how they’ve been influenced by each other, and why you should do your most important task first thing in the morning (even though only one of them does).

HBR: Let’s start with something simple. How does each of you define what you do? Allen: I help people and organizations produce more with less input. I teach a set of best practices and a methodology that produce a greater sense of concentration and control.

Schwartz: We teach individuals and organizations how to manage energy more skillfully in order to get more work done in less time, more sustainably. That requires a new way of working—one that balances periods of high focus with intermittent renewal.

Both of you have written several books describing your techniques, but give me a quick summary. Allen: I call what I’ve uncovered “the strategic value of clear space.” Say you’re going to cook dinner for people, it’s 5:00 pm, and they’re coming at 6:00. You want to have all the right ingredients. You want to have the right tools. You want the kitchen to be nice and clear. You need the freedom to make a creative mess. I teach people to achieve that freedom by taking very immediate, concrete steps: downloading all your commitments and projects into lists, focusing

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Being More Productive: An Interview with Allen and Schwartz

on “next actions,” and thinking about the context— work that needs to be done in your office, or on the phone, or on the computer. You don’t need to change who you are. You just need some simple but very powerful techniques.

Schwartz: We focus on the four primary dimensions of energy that we all need to perform at our best. The ground level is physical—fitness, sleep, nutrition, and rest. At the emotional level, it’s about cultivating positive emotions—and as a leader, communicating them to others. At the mental level, it’s about gaining more control of your attention—both by increasing [your] ability to focus on one thing at a time and by learning to shift into the right hemisphere to do more-creative work. And at the spiritual level, it’s about defining purpose, because when something really matters, you bring far more energy to it. Very few [managers and] leaders I’ve met fully appreciate how meeting these needs—in themselves and for others—is absolutely critical to sustainable high performance. They’re good at doing things, and they’ve been rewarded by being given more things to do. But increasingly, demand is outrunning their capacity. They’re overloaded with e-mail and texts and all the information that comes in. We have to teach them to step back and say, “What do I actually want to do? What are the right choices? What are the costs of this choice?”

Let’s talk about some of the concrete principles you teach. Tony, explain why you think people should 25

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approach work as a series of short sprints, not an all-day marathon. Schwartz: There’s a fundamental misunderstanding about how human beings operate at their best. Most of us mistakenly assume we’re meant to run like computers—at high speeds, continuously, for long periods of time, running multiple programs simultaneously. It’s just not true. Human beings are designed to be rhythmic. The heart pulses; muscles contract and relax. We’re at our best when we’re moving rhythmically between spending energy and renewing it. We need to recognize the insight of athletes, who manage their work-rest ratios. We encourage people to work intensely for 90 minutes and then take a break to recover. We teach them to eat small, energy-rich meals every few hours, rather than three big meals a day. We believe napping drives productivity, although that remains a tough sell in most companies. Still, the reality is that if a person works continuously all through the day, she’ll produce less than a person of equal talent who works very intensely for short periods and then recovers before working intensely again. (To learn more, see “Power Through Your Day in 90-Minute Cycles” and “Manage Your Energy, Not Your Time,” later in this guide.)

Allen: It’s also an issue of choosing the right work. Peter Drucker said that the toughest job for knowledge workers is defining the work. A century ago, 80% of the world made and moved things. You worked as long as you could, and then you slept, and then you

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got up and worked again. You didn’t have to triage or make executive decisions. It’s harder to be productive today because the work has become much more complex.

David, what’s the biggest roadblock to productivity that you typically observe when you go into an organization for the first time? Allen: People don’t capture stuff that has their attention. They don’t acknowledge it or objectify it. And it keeps rolling around in the organizational psyche as well as the personal psyche, draining energy and creating incredible psychic residue. People say, “I’ll do that,” but they don’t write it down, and it goes into a black hole. That would be fine if it were just one thing, but it’s hundreds of things. And people don’t determine exactly what their commitment to that stuff is—what’s the outcome they want to achieve, what’s the next action required to move it forward. Your head is for having ideas, not holding them. Just dumping everything out of your head and externalizing it is a huge step, and it can have a significant effect.

The devil’s advocate position is that this results in gigantic to-do lists, which are overwhelming in themselves. Allen: You need lists because your brain isn’t good at keeping them. Your mind is this dumb little computer that will wake you up at 3:00 am and beat you

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bloody over stuff you can’t do spit about while you’re lying there. All it’s doing is repeating stuff in open loops, and it sucks your energy like crazy.

Schwartz: There’s a process of humility that’s required here. It’s a little bit of a turn on the 12-step notion of admitting that you’re powerless over your addictions. In this case, the addiction is to e-mail and information. The problem is that our willpower and self-discipline are wildly overrated. We think the way to make a change is to push harder—to resist that chocolate-chip cookie, or wake up early and get to the gym. It doesn’t work. It’s humbling to discover that we’re creatures of habit, and what we did yesterday is what we’re going to do today. You want to co-opt the process by which negative habits arise without your intention, and substitute what we call “positive rituals,” or deliberate practices. (See Section 5: Create Rituals.)

How much do you know about each other’s work—and how much do you use each other’s strategies? Schwartz: I always kept lists, but until I connected with David’s work, I didn’t realize that anything I didn’t download would potentially create distractions—so now I keep lists of everything. Another ritual I have that aligns with David’s work is to always do the most important task of the day first thing in the morning, when I’m most rested and least distracted. Ninety percent of people check their e-mail as soon as they get to work. That turns their agenda over to someone else. 28

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David, how has Tony’s thinking influenced the way you work? Allen: The piece that’s made the biggest difference is his work on energy cycles. I actually brought a pillow into work. I work in a glass office, and now people can see me lying on my floor taking a nap for 20 minutes. That’s directly from Tony’s work. I wish I had the discipline Tony does to tackle the hardest tasks first thing in the morning, but I don’t.

Schwartz: It’s not that you don’t have the discipline— it’s that you don’t have the ritual. If you built that ritual, I have zero doubt that you could do it.

Allen: Part of the way to attack that problem is to break big tasks down and focus on smaller “next actions,” which can seem more manageable. What most people put on a to-do list are vague things like “Mom.” Great! So Tony will write down “Mom,” signifying that he has to decide whether to get his mother a birthday present, and what to buy, and how to deliver it. He’ll resist looking at the list, because he knows there’s a lot of work in that simple notation. Instead the list should specify a smaller next action—say, “Call sister re: Mom’s birthday.” Oh, look—I can do that! There’s actually a part of us that loves to produce, that loves to be complete. Now I’ve created motivation: I see a desired result, I have the confidence I can get there, and I see the path. A lot of what GTD does is set it up so that you only have to think about things once. The problem is that everybody is multitasking and getting distracted by the latest and loudest. They fail because 29

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they haven’t captured, clarified, organized, or built in a regular review system they trust.

Schwartz: Let me beg to differ a little. Say you’re working on a primary task and you get an e-mail. You hear that little Pavlovian beep, and you cannot resist it. So you turn to the e-mail and lose track of the initial task, and it takes you time to reconnect to it afterward. Researchers have found that over time and with practice, people get better at task shifting, but they never get remotely as good as they’d be if they did one thing at a time. (For more on effective to-do lists and multitasking, see Section 3: Organize Your Time.)

Allen: Let’s take it a step further. Why do people get disturbed by that e-mail beep? It’s because they don’t trust that they’ve emptied their e-mail every 24 hours. Most people are living in an emergency scan mode. They never deal with their e-mail, so they’re afraid there’s still something sitting in there, and they’re constantly allowing themselves to get distracted by it. (See Section 7: Take Control of Your E-mail.)

Last question: If people could take just one thing away from your work, what should it be? Schwartz: [We] need to recognize that human beings are basically organisms containing energy. And that energy is either being renewed or being dissipated over time. An organization has to realize that part of its responsibility, whether it wants it or not, is to

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ensure that people have full tanks of energy. This is one of the big variables that will determine which organizations thrive in the next 10 or 20 years. [And until organizations do so, we need to take on that responsibility for ourselves.]

Allen: Think about it this way: While we’ve been sitting here talking, stuff has been piling up in our in-boxes and our voice mails. Some of it has the potential to meaningfully shift our priorities. When we turn to this accumulated stuff, we’ll need to eliminate old business that is pulling on us, that’s taking our attention, and reallocate our resources to these new priorities. You can only do one thing at a time, and you only have so many resources. You either feel OK about sitting here talking to us, or you feel bad about the 9,000 other things you’re not doing. Everybody needs a system to make those choices wisely.

Daniel McGinn is a senior editor at Harvard Business Review.

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Section 2

Prioritize Your Work

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Chapter 4

Get a Raise by Getting the Right Work Done by Peter Bregman

My friend Dave is notorious for eating fried food. (Names and some details changed.) Yet recently he was surprised to learn that his cholesterol was high because, as he put it, “The day before the test, I ate really well.” The idea of immediate results is alluring. But whether it’s managing our diet or prioritizing our workload, there are no quick fixes. I was reminded of this when a reporter asked me what advice I would give to someone who wanted to ask for a raise at a time when most wages are stagnating or falling. My answer? Don’t ask. It’s not that I think people can’t get raises right now. But if you haven’t spent the last year laying the ground-

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work, it’s highly unlikely that you’ll be successful now. There’s no formula—no perfect words or spinning of events—that will magically deliver a raise with a day or two of preparation. But there is a formula for getting more money over time. And it starts with your ability to prioritize. The formula is based on one simple premise: We can get more money when we demonstrate that we’ve added more value. And we can add more value when we spend the majority of our time focusing on the work that the most senior leaders in our organization consider valuable, which is almost always work that increases revenue or profits, either short-term or long-term. But when we’re not clear about what work is most important to our organization, one of two things can happen: Either we put the same amount of energy and effort into everything or we let the wrong things fall through the cracks. Making more intentional and strategic choices about where to spend our time can mean the difference between a stagnant salary and a growing one. We can be more productive when we know which initiatives deserve our highest priority. Here’s my formula for getting a raise:

1. During this year’s compensation conversation, take whatever is given to you without negotiation and with appreciation. Then explain that you’re less interested in a raise right now and more interested in how you can add tremendous value to the organization. 36

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2. Think like a shareholder of the company. Ask lots of questions about the strategy and what’s keeping the top leaders awake at night. Understand how your department affects revenue or profitability and what’s important to your direct manager. With your manager, identify the top two or three things you can work on that will drive revenue or profitability. Once you’ve had that conversation, you’ll have your raiseworthy work focus. 3. Now keep those two or three revenue and/or profitability drivers at the top of your to-do list. Approach your daily work so that the majority of your effort moves the organization further in those areas. Share your to-do list with your manager, to keep you on the same page about your priorities and how your work affects the bigger picture. Quantify the impact you’re making. If your manager asks you to do things outside of your top priorities, push back and discuss the possible trade-offs you could make. Sure, you’ll need to work on some things that aren’t important. But make a strategic choice to shortchange those. After about six months of this laser focus, you’ll be ready to talk about how you’ve added tremendous value on the things that matter most. During that discussion you’ll also be ready to talk about a real raise. That’s good timing, since most organi37

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zations are beginning to think through their departmental budgets and promotions around the six-month mark. Here’s why this formula works: It’s not a trick. If you focus on your highest-priority work—even if it requires that you push back when your manager asks you to work on other tasks—ultimately you and your manager will be more productive, and the organization will benefit. That’s money in the bank. It will make your job more secure and you more promotable. “So,” I asked Dave. “Now that you know you have high cholesterol, are you going to change the way you eat?” “No,” Dave answered, true to form, “I’m taking a pill. My cholesterol will be lower in a few days and I can still eat everything.” Maybe I like doing things the hard way. But as far as I know, there’s no pill for getting a raise.

Peter Bregman  is a strategic adviser to CEOs and their leadership teams. His latest book is 18 Minutes: Find Your Focus, Master Distraction, and Get the Right Things Done.

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Chapter 5

The Worth-YourTime Test by Peter Bregman

Nate Eisman recently started working for a large consulting firm after many years as an independent consultant. (Some details changed to protect privacy.) He called me for some advice. “I’m wasting a tremendous amount of time,” he complained. “I’m in meetings all day. The only way I can get any real work done is by coming in super early and staying super late.” Nate had gone from an organization of one to an organization of several thousand and was drowning in the time suck of collaboration. He is not alone. Working with people takes time. And different people have different priorities. Someone may need your perAdapted from content posted on hbr.org on April 1, 2010.

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spective on an issue that’s critical to him but not to you. Still, if he’s a colleague, it’s important to help. And often, we want to help. On the other hand, we’ve all felt Nate’s pain: How can we spend time where we add the most value and let go of the rest? We need a way to quickly and confidently identify and reduce our extraneous commitments, to know for sure whether we need to deal with something or delegate it, and to manage our desire to be available to others. I propose a brief test that every commitment should pass before you agree to it. When someone comes to you with a request, ask yourself:

1. Am I the right person? 2. Is this the right time? 3. Do I have enough information? If the request fails the test—if the answer to any one of these questions is “no”—then don’t do it. Pass it to someone else (the right person), schedule it for another time (the right time), or wait until you have the information you need (either you or someone else needs to get it). Sometimes it’s impossible or inappropriate to wall yourself off completely. For example, what if your boss is the person who interrupts you? Or what if you’re on vacation and an important client reaches out with a timesensitive and crucial question? The three test questions offer a clear, easy, and consistent way of knowing how to respond—and help us avoid the tendency to say yes to everything.

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If your boss asks you to do something and her request fails the test, it’s not just okay, it’s useful to push back on or redirect her so the work is completed productively. It’s not helpful to you, your boss, or your organization if you waste your time on the wrong work. That’s the irony. We try to be available because we want to be helpful. And yet being overwhelmed with tasks—especially those we consider to be a waste of our time—is exactly what will make us unhelpful. When we get a meeting request that doesn’t pass the test, we should decline it. When we’re cc’d on an e-mail that doesn’t require our attention, we need to delete it. And a 50-page presentation needs to pass the test before we read it—and even then, it’s worth an e-mail asking which are the critical pages to review. A few weeks after sharing the three questions with Nate, I called him at his office at around 6 pm to see how it was going. I guess it was going well, because I never reached him. He had already gone home.

Peter Bregman  is a strategic adviser to CEOs and their leadership teams. His latest book is 18 Minutes: Find Your Focus, Master Distraction, and Get the Right Things Done.

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Chapter 6

Say Yes to Saying No by Alexandra Samuel

If your e-mail in-box looks like mine, it’s full of requests and invitations that promise challenging new projects, clients, and commitments. Sure, you enjoy the stimulation and excitement that come with these offers, but it’s a fine line. You have to be selective about what you take on—and disciplined about retiring long-standing activities to make room for new ones. You have to be able to say no. Frequently, politely, and effectively. The good news is that the same technologies that threaten to overload you with things to say yes to can also help you say no. Here’s how:

Adapted from content posted on hbr.org on January 8, 2010.

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Set your intentions Before you say no, make it clear to yourself what you want to say yes to. Sites like 43Things.com and SuperViva .com can help you create lists of what you want to accomplish and experiences you want to have. Writing down your goals will help you clarify what’s important, identify what you want to eliminate, and get the community support to achieve it.

Prioritize your commitments A simple Excel spreadsheet can help you evaluate what’s on your plate before you agree to take on more. Capture every project you’re working on—even ones you’ve only thought about—and list these in column A, one row per task. Use column B to assign a priority to each project, ranking items from 1–5. In column C, capture the name of anyone who could take over or help with certain projects. Sort your projects according to priority. For high-priority tasks you’ve noted could be delegated, e-mail or meet with everyone to whom you hope to transfer projects. Review with your boss the list of high-priority tasks that only you can handle. Are they aligned with her and your unit’s goals? If not, reevaluate to see if you should: shift priorities; delegate more of the projects; or defer some to a later date. (To download a sample Excel spreadsheet, visit my website at http://www.alexandrasamuel .com/career-work/excel-template-7-steps-to-achievingyour-goals.)

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Make it easy to say “no” When my in-box piles up with unanswered messages, you can bet that it’s full of e-mails that require a no—ones that I can’t bring myself to write. To make it easier, I’ve created a few different signature files in my e-mail client, with polite “no” messages for different circumstances: I’d love to join you, but my schedule is really booked for the next month; or Thanks for thinking of us, but we’re only taking on XYZ type of client right now; or That sounds like a great project, but my pro bono work is already committed for this quarter. Using these removes the burden of working up the energy to let someone down.

Make “no” your default answer Say no to the majority of invitations and project offers you receive unless they meet a short set of criteria. For example, I look for conferences that combine business development (getting clients), professional development (improving skills or knowledge), and personal development (regeneration or personal growth), and attend only events that promise meaningful value on at least two of those fronts. Write down your criteria and stick them to your computer monitor, or put them on a digital sticky note. None of these practices will eliminate the anxiety that comes from saying no or the fear that you may be passing up a fantastic opportunity. But it’s because saying no is so difficult that we need tools and systems to make it a little easier and a little more habitual. The more you say no, the better you’ll be able to focus on your most important work.

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Alexandra Samuel is the Director of the Social + Interactive Media Centre at Emily Carr University, and the cofounder of Social Signal, a Vancouver-based social media agency. You can follow Alex on Twitter at @awsamuel or her blog at alexandrasamuel.com.

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Section 3

Organize Your Time

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Chapter 7

A Practical Plan for When You Feel Overwhelmed by Peter Bregman

We’ve all experienced it: that feeling that we’ve got so much to do that there’s no chance we’ll get it all done. And certainly not done on time. Right now, I’m feeling completely overwhelmed by my to-do list. Here’s the crazy part. I just spent the last two days trying to work without actually working. I start something but get distracted by the Internet. Or a phone call. Or an e-mail. At a time when I need to be most efficient, I’ve become less efficient than ever. You’d think it would be the opposite—that when we have a lot to do, we’d become very productive in order to get it done. Sometimes that happens. Adapted from content posted on hbr.org on September 23, 2010.

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But often, when there’s so much competing for our attention, we don’t know where to begin—so we don’t begin anywhere. Next time you find yourself in this situation, try this approach:

1. Write down everything you have to do on a piece of paper. Resist the urge to use technology for this task. Why? I’m not sure, but somehow writing on paper—and then crossing things out—creates momentum. 2. Spend 15 minutes completing as many of the easiest, fastest tasks on your list as you can. Make your quick phone calls. Send your short e-mails. Don’t worry about whether these are the most important tasks on your list. You’re moving. The goal is to cross off as many tasks as possible in the shortest time. Use a timer to keep you focused. 3. Work on the most daunting task for the next 35 minutes without interruption. Turn off your phone, close all the unnecessary windows on your computer, and choose the most challenging task on your list, the one that instills the most stress or is the highest priority. Then work on it and only it—without hesitation or distraction—for 35 minutes. 4. Take a break for 10 minutes, then begin the cycle again. After 35 minutes of focused work, take 50

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A Practical Plan for When You Feel Overwhelmed

a break. Then start the hourlong process over again, beginning with the 15 minutes of quick actions. “Thirty years ago,” Anne Lamott writes in her book Bird by Bird, “my older brother, who was ten years old at the time, was trying to get a report on birds written that he’d had three months to write. It was due the next day. We were out at our family cabin in Bolinas, and he was at the kitchen table close to tears, surrounded by binder paper and pencils and unopened books on birds, immobilized by the hugeness of the task ahead. Then my father sat down beside him, put his arm around my brother’s shoulder, and said, ‘Bird by bird, buddy. Just take it bird by bird.’” That’s it. Bird by bird, starting with a bunch of easy birds to help you feel accomplished and then tackling a hard one to gain serious traction and reduce your stress level. All timed. Working within a specific and limited time frame is important because the race against time keeps you focused. When stress is generalized and diffuse, it’s hard to manage. Using a short time frame actually increases the pressure but keeps your effort specific and particular to a single task. That increases good, motivating stress while reducing negative, disconcerting stress. So the fog of feeling overwhelmed dissipates, and forward movement becomes possible. In practice, I’m finding that although I make myself work at least the full 35 minutes, I don’t always stop when the 35 minutes of hard work are over, because I’m 51

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in the middle of something and I have traction. On the other hand, though it’s tempting, I don’t exceed the 15 minutes of easy, fast work. When the timer stops, so do I, immediately transitioning to the hard work. Maybe this method has been working simply because it’s novel for me and, like a new diet, offers some structure to motivate my effort. Today, though, it doesn’t matter, because it’s a useful tool for me. And I’ll keep using it until I don’t need it or it stops working. Am I still stressed? Sure. But overwhelmed? Much less so. Because I’m crossing things off my list and getting somewhere on my little tasks as well as my big ones, bird by bird.

Peter Bregman  is a strategic adviser to CEOs and their leadership teams. His latest book is 18 Minutes: Find Your Focus, Master Distraction, and Get the Right Things Done.

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Chapter 8

Stop Procrastinating— Now by Amy Gallo

It seems that no one is immune to procrastination. When someone asked Ernest Hemingway how to write a novel, he replied, “First you defrost the refrigerator.” But putting off tasks takes a big toll on our productivity and our psyche. Here are five principles to follow the next time you find yourself procrastinating:

1. Figure Out What’s Holding You Back When you find yourself ignoring or delaying a task, ask yourself why. Psychiatrist Ned Hallowell says there are two types of tasks we most often defer: Adapted from content posted on hbr.org on October 11, 2011.

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• Something you don’t like to do. This is the most common one. As Hallowell says, “You don’t put off eating your favorite dessert.” • Something you don’t know how to do. When you lack the necessary knowledge or are unsure of how to start a job, you’re more likely to avoid it. Once you’ve identified why you’ve put something off, you can break the cycle and prevent future bouts of procrastination.

2. Set Deadlines One of the simplest things to do is create a schedule with clear due dates for each task. “As soon as you get the project, chunk it down into a few manageable segments,” advises Teresa Amabile, coauthor of The Progress Principle. Then, assign deadlines for each task. “Put an appointment in your calendar to work on a small piece of the next segment each day to allow yourself to get it done a bit at a time,” she says. These “small wins” make the work more manageable and contribute to your sense of progress. And achieving them is much easier than trying to barrel through a complex project. Use whatever visual cues work for you: Set reminders in your calendar, add items to your to-do list, or put a sticky note on your computer screen.

3. Increase the Rewards We often dally because the reward for doing an assignment is too far off. To make a task feel more urgent, focus

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on short-term rewards. If you always procrastinate on filing your taxes, for example, focus on getting a refund by a certain date. And if there aren’t any obvious rewards, create your own. Treat yourself to a coffee break or a quick chat with a coworker once you’ve finished a task. Embed the reward into the work by making it more fun to do, like partnering with a colleague on a particularly difficult project.

4. Involve Others One of the principles Hallowell emphasizes is “Never worry alone.” If you don’t know how to do something, ask for help. Turn to a trusted colleague or a friend for advice. Asking people to review your work can also help spur you to get started, because you know they’re expecting it.

5. Get in the Habit “People throw up a hand and say ‘I’m such a procrastinator’ as if they have no control,” says Hallowell. “You do have control over this, and you’ll be very proud when you change it.” There are immediate benefits when you start getting things done right away, and it’s a habit you can cultivate. Amabile suggests tracking your improvement. “Spend just five minutes a day to note the progress you made, any setbacks you encountered, and what you might do the next day to enable further progress,” she says. She recommends you do this in a work diary (see “Use a 10-Minute Diary to Stay on Track,” later in this guide). Then see yourself—and talk about yourself with others—as someone who gets things done. “The most

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powerful event for maintaining positive inner work life is making progress in meaningful work,” says Amabile.

Amy Gallo is a contributing editor at Harvard Business Review. Follow her on Twitter at @amyegallo.

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Chapter 9

Don’t Let LongTerm Projects Become LastMinute Panic by Peter Bregman

I want to write a screenplay. Actually, I wanted to write one last year, but then other work took more time than I expected, and I kept pushing “Write screenplay” off my to-do list. I know I’m not alone in struggling to make incremental progress on long-term projects or goals. How do you get started when you have “all the time in the world”? Maybe you have no due date, like my screenplay. Or maybe you have a deadline that’s months away—like preparing a speech, developing a business plan, or designing

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a training program. Perhaps you tend to procrastinate on projects with generous schedules—until “next month” becomes “next week” and then “next day,” and suddenly your long-term project has morphed into a short-term, panic-filled nightmare. Accomplishing something big and important is rarely as simple as just getting it done. Often we don’t know how to start and, even when we do, we rarely have all the knowledge and skills we need to see it through. Also, we always have more urgent things to do and so we push off long-term goals. (See the previous article, “Stop Procrastinating—Now,” for more ideas about overcoming the temptation to postpone work.) We all know the basic advice: Break the work into smaller, more manageable chunks; focus on the next small step; set intermediate deadlines. It’s good advice. But, in my experience, it’s not enough. The reason we procrastinate on a big, long-term project is because it’s important. So important, we’re too scared to work on it. I’ve never written a screenplay. I don’t know how to format it. I don’t know how to structure the story. I don’t even know the story I want to tell. I’m afraid that I’ll fail. That I’ll spend a lot of time on it—while other more immediate things don’t get done— and that it’ll be terrible, anyway. My screenplay is work I care about deeply. Almost all big projects fit into that category—including the competitive analysis your boss asked for. Because a big project is a mirror. Even if you think you don’t care about it, a big project reflects your smarts, effort, and character. It has

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your signature on it. Failure in a long-term project isn’t just a work issue, it’s an identity issue. So what’s the antidote?

Acknowledge your fear As soon as you know you’re going to give that speech or design that training program, take a quiet moment and feel the fear that comes with the importance—and unknowns—of the project. Maybe you’re afraid of getting in front of all those people to give your speech. Maybe you’re afraid that your training design will expose how much you don’t know. Maybe you’re afraid of letting other people down.

Share your fear Some people may think you’re a wimp, but that hasn’t been my experience. Telling others you’re intimidated by something you have to do gives them permission to feel— and maybe express—their own fear. I find that people are gracious, supportive, and empathic.

Round up the tools you need Acknowledging your fear also serves another, crucial purpose: it informs you. By recognizing that you don’t have everything you need to see the project through, you’re identifying your next, manageable step: gathering the necessary tools, information, skills, and support.

Lower your expectations You’re scared because you expect a lot from yourself and you’re afraid you’ll underperform. When you acknowl-

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edge that fear, you recognize that you might not have all that it takes to meet your expectations. Admitting that, in turn, reduces your expectation of getting it perfect right off the bat. And lowering your expectation of getting it right is key to getting started.

Make it a priority Even if the long-term project isn’t your choice—commit yourself to it fully. Make it one of your top five priorities. This forces you to also identify what’s not a priority. If you have too many important goals, you’ll never get to the big long-term ones. So slash your list until you’re left with only five. I use a six-box to-do list—each box represents one of my top five priorities and the sixth box, labeled “The Other 5%,” is for everything else. (See figure 9-1, “Sample 18 Minutes daily to-do list.”) That last box shouldn’t take more than 5% of your time. One of my five boxes always represents a long-term priority, which, for this year, contains my screenplay. Having a long-term project on my daily to-do list means every day I make incremental progress toward my big goal.

Break the work into smaller pieces, and set deadlines Now you’re ready for the standard advice. Break the work into manageable chunks and make sure you know how to do the first chunk. Set an intermediate deadline. If you need other people’s help, get them involved early. Finally, decide when and where you’re going to accomplish the

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FIGURE 9-1

Sample 18 Minutes daily to-do list Date: ______________________

Do great work with current clients

Develop new business opportunities

-

-

Follow-up meetings with Anycorp and Bigorg GMs

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Mary appt for next week

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Jason—on-boarding docs

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Set up flight to SF

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E-mail request to clients for Howie to call

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Speak with Luisa about 360

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Ideas for General Corporation leadership team

Speak and write about my ideas -

Next HBR article

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Review changes to WSJ article

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Speaking engagement call with Loretta

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Rich—ideas for future management guides

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Slides for keynote speech

Nurture myself and my family -

Write in journal 30 minutes/day

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Type with Isabelle

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Book flights to Bahamas

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Abigail—M&A work?

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Referrals from Tom

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Talk to Fernanda about real estate opportunity

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Lunch with Joe

Express myself creatively -

Talk with Alice about screenplay

The other 5% -

Dr. Clancy—confirm Wed CT scan

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Call Tim

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Lunch with Kathy to talk about job search

Exercise 60 minutes/day

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Andrew—Amex card

Make reservation for dinner with Eleanor

-

Research new running sneakers

-

Buy bathing suit

-

Get exact numbers from Kristin

© PeterBregman.com. All rights reserved. Reprinted with permission. Download a blank six-box to-do list at http://peterbregman.com/18minutes/.

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first chunk and make an appointment with yourself in your calendar. When you sit down to start your work, you may feel the resistance—fear—come up again. But now you know what it is. Acknowledge it, and it’ll be easier to move into the work.

Peter Bregman  is a strategic adviser to CEOs and their leadership teams. His latest book is 18 Minutes: Find Your Focus, Master Distraction, and Get the Right Things Done.

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Chapter 10

Stop Multitasking by Peter Bregman

During a conference call with the executive committee of a nonprofit board on which I sit, I decided to send an e-mail to a client. I know—multitasking is dangerous. But I wasn’t texting while driving. I was safe at my desk. What could go wrong? Well, I sent the client the message. Then I had to send him another one, this time with the attachment I’d forgotten to append. Finally, my third e-mail to him explained why that attachment wasn’t what he was expecting. When I eventually refocused on the call, I realized I hadn’t heard a question the board’s chair had asked me. I swear I wasn’t sleep-deprived or smoking anything. But I might as well have been. A study showed that people distracted by incoming e-mail and phone calls saw a 10-point drop in their IQs. What’s the impact of Adapted from content posted on hbr.org on May 20, 2009.

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10 points? The same as losing a night of sleep. More than twice the effect of smoking marijuana. Doing several things at once is a trick we play on ourselves, thinking we’re getting more done. In reality, our productivity decreases by as much as 40%. We don’t actually multitask. We switch-task, shifting rapidly from one thing to another, interrupting ourselves, and losing time in the process. You might think you’re different, that you’ve done it so much you’ve become good at it. But research shows that heavy multitaskers are less competent at doing several things at once than light multitaskers. Unlike most things, the more you multitask, the worse you are at it. Practice, in this case, works against you. I decided to try an experiment. For one week I would do no multitasking and see what happened. What techniques would help? Could I sustain a focus on one thing at a time for that long? For the most part, I succeeded. If I was on the phone, I did nothing but participate in the conversation. In meetings, I was fully focused on the presentation or discussion at hand. And when I was working at my desk, I held off any interruptions—e-mail, a knock on the door—until I finished my task. I discovered six things:

1. It was delightful. When I shut off my cell phone I was much more deeply engaged and present. While it may seem that thumbing out a text under the table during a meeting takes only a 64

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split second, it’s a longer distraction than that. First you think about your text, then you type it out, then you think about how the other person might respond, then you check for her response, etc. Before you know it, you’ve missed the whole meeting. 2. I made significant progress on challenging projects. Activities like writing or strategy work require thought and persistence. They’re the kind I usually try to distract myself from. I stayed with each project when it got hard, and I experienced a number of breakthroughs. 3. My stress level dropped dramatically. Multitasking isn’t just inefficient, it’s stressful. It was a relief to focus on only one thing at a time. It felt reassuring to completely finish a task before moving to the next. 4. I had no patience for wasted time. I became laser-focused on getting things done. An hourlong meeting seemed interminable. A meandering conversation was excruciating. 5. I had tremendous patience for useful and enjoyable things. When I was on a call with a client, I closed my computer, shut my eyes, and focused completely. I was able to pick up nuance and subtle emotion. And when I was brainstorming about a difficult problem, I stuck with it. Nothing else was competing for my attention, so I was able to settle into the one thing I was doing. 65

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6. There was no downside. I lost nothing by not multitasking. No projects were left unfinished. No one became frustrated with me for not answering a call or failing to return an e-mail the second I received it. So how do we resist the temptation to multitask?

Turn off interruptions Often I write at 6 am, when there’s nothing to distract me. I shut down my computer’s wireless connection and turn off my phone. In my car, I leave my phone in the trunk. Drastic? Maybe. But most of us shouldn’t trust ourselves.

Prioritize Say you’re the only person with information that your team needs in order to move forward with a time-sensitive project, but you’re on an important conference call. What do you do? Decide which task is more important to focus on and ask the other one to wait. Making a conscious choice to interrupt one task for another is better than trying to do them at the same time. So either excuse yourself from the conference call for a moment, or tell your team to wait until you’re done.

Use your loss of patience to your advantage Create unrealistically short deadlines. Cut all meetings in half. Give yourself a third of the time you think you need to accomplish something.

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There’s nothing like a deadline to keep things moving. And when things are moving fast, we can’t help but focus on them. If it turns out you only have 30 minutes to finish a presentation you thought would take an hour, are you really going to answer your cell phone? Because multitasking is so stressful, single-tasking to meet a tight deadline will actually reduce your stress. And giving yourself less time to do things may make you even more productive and relaxed.

Peter Bregman  is a strategic adviser to CEOs and their leadership teams. His latest book is 18 Minutes: Find Your Focus, Master Distraction, and Get the Right Things Done.

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Chapter 11

How to Stay Focused on What’s Important by Gina Trapani

Most of us spend our workdays in one of two ways: reacting to urgent demands, or proactively focusing on what we decided ahead of time are our most critical tasks to accomplish. The best way to be productive is to mitigate the urgent to work on the important. What’s the difference between urgent and important? “Urgent” tasks include things like: • Frantic e-mails that need a response “right now” • Sudden requests that seem like they’ll take only two minutes but instead take an hour Adapted from content posted on hbr.org on February 18, 2009.

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• Putting out fires—especially others’ • Fixing the day’s crisis rather than stepping back to consider what will solve the chronic problem • Tasks you’d rather do first because they’re less intimidating than your priorities We’re drawn to these seemingly “urgent” tasks because they keep us busy and make us feel needed and essential. If we label projects as urgent, it justifies the time and attention we throw at them. But dealing with a constant stream of “urgent” tasks leaves you wrung out at the end of the day, wondering where all your time went, staring at the important work you’ve yet to start, much less complete. On the flip side, important work: • Moves you and your business toward long-term goals • Can be hard work that feels scary because you’re not confident you can actually do it • May not give you that same shot of adrenaline that “urgent” requests do If your workplace encourages constant, frantic headlesschicken running, it can feel impossible to focus on what’s actually important versus what seems urgent. Still, an awareness of the difference and a few simple techniques can help. Here are three.

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Choose three important tasks to complete each day Write them down on a slip of paper and keep it visible on your desk. If, for example, you’re tempted to respond to an e-mail notification, check your list and remember that that “ding” probably has nothing to do with your most critical work. When you have an unexpected hour thanks to a canceled meeting, move forward on those three important tasks.

Turn off your e-mail Shut down Outlook, turn off e-mail notifications on your mobile, and do whatever else you have to do to muffle e-mail interruptions. When you decide to work on one of your important tasks, give yourself at least an hour of uninterrupted time to complete it. If the Web is too much of a temptation, disconnect your computer from the Internet for that hour.

Set up a weekly 20-minute meeting with yourself Put it on your calendar, and don’t book over it—treat it with the same respect you’d treat a meeting with your boss. If you don’t have an office door or you work in a busy open area, book a conference room. Go there to be alone. Bring your project list, to-do list, and calendar, and spend the time reviewing what you finished in the past week and what you want to get done next week. This is a great time to choose your daily three important tasks. Productivity author David Allen refers to this as

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the “weekly review,” and it’s one of the most effective ways to be mindful of how you’re spending your time. For other ideas on how to tackle your day, see “Power Through Your Day in 90-Minute Cycles” (later in this guide) and “A Practical Plan for When You Feel Overwhelmed” (earlier in this guide).

Gina Trapani is the founding editor of the personal productivity blog Lifehacker.com.

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Chapter 12

To-Do Lists That Work by Gina Trapani

Here’s how to write to-do lists that work:

1. Break it down. Take a task and carve it into bite-sized chunks. Then break it down some more. Don’t confuse to-do’s with goals or projects. A to-do is a single, specific action that will move a project toward completion. It’s just one step. For example, “Plan the committee lunch” is a project. “E-mail Karen to get catering contact” is a to-do. Breaking down your task into the smallest possible actions forces you to think through each step up front. With the thinking out of the way, it’s easy to dash off that e-mail, make

Adapted from content posted on hbr.org on January 13, 2009.

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that call, or file that report, and move your work along with much less resistance. 2. Use specific action verbs and include details  You’re overdue for a check-in with your mentor, but the “Lunch with Judy” to-do just hasn’t gotten done. When you write down that task, use an action verb (call? e-mail?) and include whatever details your future self needs to check it off. “Call Judy at 555–4567 for lunch on January 17, 18, or 19” is a specific, detailed to-do. Make your to-do’s small and specific to set yourself up for that glorious moment when you can cross them off your list as DONE. Here are some more tips for effective to-do lists from the hbr.org community. • Bucket your work in any way that makes sense for you (for example, work/home/freelance); by area of responsibility (Smith account/Culver account/web team); by difficulty level (group all of your “easy” five-minute tasks together so when you have spare time, you can quickly spot them and knock a few off ). Give each bucket its own column. • Deliberately use a small-trim book or paper (6″ × 9″) to keep your list short or a distinctive size (like an 8.5″ × 11″ piece of paper folded in half ) that makes it stand out from other papers you carry. 74

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• Make a two-view list. Two lists, with the same todo’s, but one organized by buckets, one by week. Bonus: You get the joy of crossing off one task in TWO places. • Pick a medium that works for you: a notebook you love (for example, Moleskine); a web-based app that syncs on your mobile and computer, wherever you are; your mobile’s voice-memo function. • Make notes in the margin or beside an item to mark when it’s due (M or 2/16). • Highlight your top-priority items or put a brightcolored sticky with your top three things to do for the day on top of your longer list/buckets. • Build in rewards. For example, for every three things you cross off your work list, allow yourself to do one home/personal task; or for every one difficult work task you accomplish, reward yourself with three easy or fun work ones. • Rewrite your list every other day or so to help you reprioritize. • When a task is done, check off a box or cross off the item with a fat marker—whatever gives you the most satisfaction.

Gina Trapani is the founding editor of the personal productivity blog Lifehacker.com.

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Chapter 13

How to Tackle Your To-Do List by Peter Bregman

For many of us, our to-do list has become more of a guilt list: an inventory of everything we want to do and really should do, but never get to. And the longer the list, the less likely we’ll get to everything on it, and the more stressed we become. So how do we turn intention into action? It’s the power of when and where. Decide when and where you’ll do something, and the likelihood that you’ll follow through increases dramatically. The reason we’re always left with unfinished items on our to-do lists is because they’re the wrong tool to drive our accomplishments. A list is useful as a collection tool—to ensure we know the pool of things that we need to do. Adapted from content posted on hbr.org on March 2, 2011.

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A calendar, on the other hand, is the perfect tool to guide our daily accomplishments. A calendar is finite; there are only so many available hours. This becomes clear the instant we try to cram an unrealistic number of things into any one day. Once you have your to-do list, open your calendar and decide when and where you’re going to do each item. Schedule each task for a specific time, placing the most challenging and important items at the beginning of the day—before even checking your e-mail. Since your entire to-do list won’t fit into your calendar, prioritize. What do you really need to do today? What important items have you been ignoring? Where can you slot them into your schedule? Once you schedule an item, cross it off your list. Transferring items from your to-do list to your calendar will help you make strategic choices about where you spend your time, but it will also leave you with a long list of items that didn’t fit into your calendar for the day. What do you do with those things? I created a three-day rule to prevent items from haunting me indefinitely. Here’s what I do: After I’ve filled my calendar for the day, I review what’s left on the list. I leave new items, those I just added that day or in the previous two days, on the list to see if they make it onto my calendar the following day. But for everything else—anything that’s been on my calendar for three days—I do one of four things:

1. Do it immediately. I’m often amazed at how many things have been sitting on my list for 78

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days that, when I finally decide to do them, take no time at all. Often they turn out to be 30-second voice mails or two-minute e-mails. 2. Schedule it. For those things that I don’t do immediately, I look for a time to slot them into my calendar, even if it’s six months away. If it’s important enough for me to have on my list, then I need to commit to doing it at a specific time and day. I can always change my plan when I review my calendar for that day, but if I want to do it, I need to schedule it. 3. Let it go. That’s a nice way of saying delete the to-do. If I’m not willing to do something immediately or schedule it for a specific time and day, I won’t ever do it. I face the reality that while I might like these things to be priorities, they currently aren’t. 4. Add it to a someday/maybe list. Sometimes it’s too hard to delete something. I don’t want to admit that I’m not going to do it. And I want to remember that I think, someday, maybe it would be a good idea. So I put those items in a someday/maybe list, which I learned about from David Allen, author of Getting Things Done. It’s where I put things to slowly die. I rarely, if ever, do things on this list. I look at it occasionally, get rid of the items that are no longer relevant, and then put the list away for another month. I probably could delete everything on this list, but I sleep a little better 79

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knowing I can put things on it when I’m not courageous or guilt-free enough to do away with them right off the bat. And who knows? Perhaps someday, maybe, I’ll do something on that list.

Peter Bregman  is a strategic adviser to CEOs and their leadership teams. His latest book is 18 Minutes: Find Your Focus, Master Distraction, and Get the Right Things Done.

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Chapter 14

Reward Yourself for Doing Dreaded Tasks by Alexandra Samuel

For some of us, checking off each item on our to-do lists provides the endorphin rush we need to make task completion an intrinsic joy. But most of us need a little extra motivation, especially for boring work like recording billable hours, uncomfortable tasks like facing awkward conversations with dissatisfied clients, or major projects like writing a complex case study. Setting up a compelling reward system can help you power through your to-dos. Here are some types of rewards to consider:

Regenerative By rewarding yourself in a way that recharges your body and brain, you’ll give yourself more energy to tackle your next task or project. Use these brief rewards midmorning, 81

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midafternoon, or midproject to help maintain your momentum. Examples of regenerative rewards include: • Meditating for 20 minutes in a secluded spot • Using your lunch hour to treat yourself to a yoga class, run, or walk • Doing 5 to 10 minutes of stretches in your office, guided by a video on your computer or iPad • Talking with a good friend for 5 or 10 minutes • Treating yourself to a second cup of coffee or a snack after an hour of focused work

Productive Often—hopefully—work is rewarding in and of itself: meeting with colleagues you respect and enjoy or crafting a PowerPoint deck that incorporates self-deprecating humor or favorite photographs. Use these aspects of your job as rewards for completing something more difficult or tedious. Other examples of productive rewards include: • Reading a popular business book or article • Taking a working meeting to a good restaurant • Installing or tweaking a piece of software you’ve been eager to use • Reading/posting an article you think your colleagues/clients would enjoy to Twitter, LinkedIn, or Google+ • Cleaning your desk

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Concurrent Some tasks are so odious or boring that even the prospect of a pint of ice cream can’t help you face them. These tasks call for a concurrent reward: something you do while working so that you can bear to plow through your in-box backlog or complete your quarterly budget report. This type of reward works especially well for tasks that are time-consuming but not concentration-intensive. You can make even difficult tasks that require your full concentration more pleasant in the right setting. Some concurrent rewards include: • Setting up camp in a Wi-Fi-enabled restaurant so you can eat while you work • Making a work date with a friend so you can chat while you purge your e-mail in-boxes • Storing up mindless tasks to complete while watching your favorite TV show at home • Downloading some new music to listen to while you purge your files • Making arrangements to work from home for the day

Cumulative Establish a special-purpose account to pay into every time you complete an especially challenging or large project. Set different dollar values depending on the size and unpleasantness of the task. Examples include:

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• An iTunes account • A replenishable gift card to your favorite coffee shop or store • A PayPal account you can refill with quick micropayments to treat yourself to some online shopping • A discretionary savings account that you use to fund something significant like tickets to a sports or arts event You’ll know your reward system is working when your to-do list no longer includes tasks you’ve been avoiding for weeks, or when you find yourself racing to complete your least-favorite work so that you can get to that delicious brownie, fantastic concert, or backlog of Mad Men episodes.

Alexandra Samuel is the Director of the Social + Interactive Media Centre at Emily Carr University, and the cofounder of Social Signal, a Vancouver-based social media agency. You can follow Alex on Twitter at @awsamuel or her blog at alexandrasamuel.com.

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Section 4

Delegate Effectively

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Chapter 15

Management Time Who’s Got the Monkey?

A summary of the full-length HBR article by William Oncken, Jr., and Donald L. Wass, highlighting key ideas, with commentary by Stephen R. Covey.

THE IDEA IN BRIEF You’re racing down the hall. An employee stops you and says, “We’ve got a problem.” You assume you should get involved but can’t make an on-the-spot decision. You say, “Let me think about it.” You’ve just allowed a “monkey” to leap from your employee’s back to yours. You’re now working for the person who works for you. Take on enough monkeys, and you won’t have time to focus on your own priorities. Reprint #99609

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How do you avoid accumulating monkeys? Develop your employees’ initiative. For example, when one of your people tries to hand you a problem, clarify whether he should: recommend and then implement a solution; take action, then brief you immediately; or act and report the outcome at a regular update. When you encourage your employees to handle their own monkeys, they acquire new skills—and you gain time to do your own job.

THE IDEA IN PRACTICE How do you return monkeys to their proper owners? Try these tactics:

Make Appointments to Deal with Monkeys Avoid discussing any monkey on an ad hoc basis—for example, when you pass an employee in the hall. You won’t convey the proper seriousness. Instead, have your employee schedule an appointment to discuss the issue.

Specify Level of Initiative Your employees can exercise five levels of initiative in handling on-the-job problems. From lowest to highest, the levels are:

1. Wait until told what to do. 2. Ask what to do. 88

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3. Recommend an action, then with your approval, implement it. 4. Take independent action but advise you at once. 5. Take independent action and update you at an agreed-on time; for example, your weekly meeting. When an employee brings a problem to you, outlaw use of level 1 or 2. Agree on and assign level 3, 4, or 5 to the monkey. Take no more than 15 minutes to discuss the problem.

Agree on a Status Update After deciding how to proceed, agree on a time and place when the employee will give you a progress report.

Develop Employees’ Skills Employees try to hand off monkeys when they lack the desire or ability to handle them. Help employees develop needed problem-solving skills. It’s initially more timeconsuming than tackling problems yourself—but it saves time in the long run.

Foster Trust Developing employees’ initiative requires a trusting relationship. If they’re afraid of failing, they’ll keep bringing their monkeys to you rather than working to solve their own problems. To promote trust, reassure them that it’s safe to make mistakes.

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Why is it that managers are typically running out of time while their subordinates are typically running out of work? Here we shall explore the meaning of management time as it relates to the interaction between managers and their bosses, their peers, and their subordinates. Specifically, we shall deal with three kinds of management time: Boss-imposed time—used to accomplish those activities that the boss requires and that the manager cannot disregard without direct and swift penalty. System-imposed time—used to accommodate requests from peers for active support. Neglecting these requests will also result in penalties, though not always as direct or swift. Self-imposed time—used to do those things that the manager originates or agrees to do. A certain portion of this kind of time, however, will be taken by subordinates and is called subordinate-imposed time. The remaining portion will be the manager’s own and is called discretionary time. Self-imposed time is not subject to penalty since neither the boss nor the system can discipline the manager for not doing what they didn’t know he had intended to do in the first place. To accommodate those demands, managers need to control the timing and the content of what they do. Since what their bosses and the system impose on them are subject to penalty, managers cannot tamper with those

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requirements. Thus their self-imposed time becomes their major area of concern. Managers should try to increase the discretionary component of their self-imposed time by minimizing or doing away with the subordinate component. They will then use the added increment to get better control over their boss-imposed and system-imposed activities. Most managers spend much more time dealing with subordinates’ problems than they even faintly realize. Hence we shall use the monkey-on-the-back metaphor to examine how subordinate-imposed time comes into being and what the superior can do about it.

Where Is the Monkey? Let us imagine that a manager is walking down the hall and that he notices one of his subordinates, Jones, coming his way. When the two meet, Jones greets the manager with, “Good morning. By the way, we’ve got a problem. You see . . . .” As Jones continues, the manager recognizes in this problem the two characteristics common to all the problems his subordinates gratuitously bring to his attention. Namely, the manager knows (a) enough to get involved, but (b) not enough to make the on-the-spot decision expected of him. Eventually, the manager says, “So glad you brought this up. I’m in a rush right now. Meanwhile, let me think about it, and I’ll let you know.” Then he and Jones part company. Let us analyze what just happened. Before the two of them met, on whose back was the “monkey”? The subordinate’s. After they parted, on whose back was it? The

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manager’s. Subordinate-imposed time begins the moment a monkey successfully leaps from the back of a subordinate to the back of his or her superior and does not end until the monkey is returned to its proper owner for care and feeding. In accepting the monkey, the manager has voluntarily assumed a position subordinate to his subordinate. That is, he has allowed Jones to make him her subordinate by doing two things a subordinate is generally expected to do for a boss—the manager has accepted a responsibility from his subordinate, and the manager has promised her a progress report. The subordinate, to make sure the manager does not miss this point, will later stick her head in the manager’s office and cheerily query, “How’s it coming?” (This is called supervision.) Or let us imagine in concluding a conference with Johnson, another subordinate, the manager’s parting words are, “Fine. Send me a memo on that.” Let us analyze this one. The monkey is now on the subordinate’s back because the next move is his, but it is poised for a leap. Watch that monkey. Johnson dutifully writes the requested memo and drops it in his outbasket. Shortly thereafter, the manager plucks it from his in-basket and reads it. Whose move is it now? The manager’s. If he does not make that move soon, he will get a follow-up memo from the subordinate. (This is another form of supervision.) The longer the manager delays, the more frustrated the subordinate will become (he’ll be spinning his wheels) and the more guilty the manager will feel (his backlog of subordinate-imposed time will be mounting).

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Or suppose once again that at a meeting with a third subordinate, Smith, the manager agrees to provide all the necessary backing for a public relations proposal he has just asked Smith to develop. The manager’s parting words to her are, “Just let me know how I can help.” Now let us analyze this. Again the monkey is initially on the subordinate’s back. But for how long? Smith realizes that she cannot let the manager “know” until her proposal has the manager’s approval. And from experience, she also realizes that her proposal will likely be sitting in the manager’s briefcase for weeks before he eventually gets to it. Who’s really got the monkey? Who will be checking up on whom? Wheel spinning and bottlenecking are well on their way again. A fourth subordinate, Reed, has just been transferred from another part of the company so that he can launch and eventually manage a newly created business venture. The manager has said they should get together soon to hammer out a set of objectives for the new job, adding, “I will draw up an initial draft for discussion with you.” Let us analyze this one, too. The subordinate has the new job (by formal assignment) and the full responsibility (by formal delegation), but the manager has the next move. Until he makes it, he will have the monkey, and the subordinate will be immobilized. Why does all of this happen? Because in each instance the manager and the subordinate assume at the outset, wittingly or unwittingly, that the matter under consideration is a joint problem. The monkey in each case begins its career astride both their backs. All it has to do is

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MAKING TIME FOR GORILLAS by Stephen R. Covey When Bill Oncken wrote this article in 1974, managers were in a terrible bind. They were desperate for a way to free up their time, but command and control was the status quo. Managers felt they weren’t allowed to empower their subordinates to make decisions. Too dangerous. Too risky. That’s why Oncken’s message— give the monkey back to its rightful owner—involved a critically important paradigm shift. Many managers working today owe him a debt of gratitude. It is something of an understatement, however, to observe that much has changed since Oncken’s radical recommendation. Command and control as a management philosophy is all but dead, and “empowerment” is the word of the day in most organizations trying to thrive in global, intensely competitive markets. But command and control stubbornly remains a common practice. Management thinkers and executives have discovered in the last decade that bosses cannot just give a monkey back to their subordinates and then merrily get on with their own business. Empowering subordinates is hard and complicated work. The reason: when you give problems back to subordinates to solve themselves, you have to be sure that they have both the desire and the ability to do so. As every executive knows, that isn’t always the case. Enter a whole new set of problems. Empowerment often means you have to develop people, which is initially

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much more time consuming than solving the problem on your own. Just as important, empowerment can only thrive when the whole organization buys into it—when formal systems and the informal culture support it. Managers need to be rewarded for delegating decisions and developing people. Otherwise, the degree of real empowerment in an organization will vary according to the beliefs and practices of individual managers. But perhaps the most important lesson about empowerment is that effective delegation—the kind Oncken advocated—depends on a trusting relationship between a manager and his subordinate. Oncken’s message may have been ahead of his time, but what he suggested was still a fairly dictatorial solution. He basically told bosses, “Give the problem back!” Today, we know that this approach by itself is too authoritarian. To delegate effectively, executives need to establish a running dialogue with subordinates. They need to establish a partnership. After all, if subordinates are afraid of failing in front of their boss, they’ll keep coming back for help rather than truly take initiative. Oncken’s article also doesn’t address an aspect of delegation that has greatly interested me during the past two decades—that many managers are actually eager to take on their subordinates’ monkeys. Nearly all the managers I talk with agree that their people are underutilized in their present jobs. But even some of the most success(continued)

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(continued) ful, seemingly self-assured executives have talked about how hard it is to give up control to their subordinates. I’ve come to attribute that eagerness for control to a common, deep-seated belief that rewards in life are scarce and fragile. Whether they learn it from their family, school, or athletics, many people establish an identity by comparing themselves with others. When they see others gain power, information, money, or recognition, for instance, they experience what the psychologist Abraham Maslow called “a feeling of deficiency”—a sense that something is being taken from them. That makes it hard for them to be genuinely happy about the success of others—even of their loved ones. Oncken implies that managers can easily give back or refuse monkeys, but many managers may subconsciously fear that a subordinate taking the initiative will make them appear a little less strong and a little more vulnerable. How, then, do managers develop the inward security, the mentality of “abundance,” that would enable them to relinquish control and seek the growth and development of those around them? The work I’ve done with numerous organizations suggests that managers who live with integrity according to a principle-based value system are most likely to sustain an empowering style of leadership. Given the times in which he wrote, it was no wonder that Oncken’s message resonated with managers. But it was reinforced by Oncken’s wonderful gift for

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storytelling. I got to know Oncken on the speaker’s circuit in the 1970s, and I was always impressed by how he dramatized his ideas in colorful detail. Like the Dilbert comic strip, Oncken had a tongue-in-cheek style that got to the core of managers’ frustrations and made them want to take back control of their time. And the monkey on your back wasn’t just a metaphor for Oncken—it was his personal symbol. I saw him several times walking through airports with a stuffed monkey on his shoulder. I’m not surprised that his article is one of the two best-selling HBR articles ever. Even with all we know about empowerment, its vivid message is even more important and relevant now than it was 25 years ago. Indeed, Oncken’s insight is a basis for my own work on time management, in which I have people categorize their activities according to urgency and importance. I’ve heard from executives again and again that half or more of their time is spent on matters that are urgent but not important. They’re trapped in an endless cycle of dealing with other people’s monkeys, yet they’re reluctant to help those people take their own initiative. As a result, they’re often too busy to spend the time they need on the real gorillas in their organization. Oncken’s article remains a powerful wake-up call for managers who need to delegate effectively. Stephen R. Covey is vice chairman of the Franklin Covey Company, a global provider of leadership development and productivity services and products. He is the author of The 7 Habits of Highly Effective People (Simon & Schuster, 1989) and First Things First (Simon & Schuster, 1994).

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move the wrong leg, and—presto!—the subordinate deftly disappears. The manager is thus left with another acquisition for his menagerie. Of course, monkeys can be trained not to move the wrong leg. But it is easier to prevent them from straddling backs in the first place.

Who Is Working for Whom? Let us suppose that these same four subordinates are so thoughtful and considerate of their superior’s time that they take pains to allow no more than three monkeys to leap from each of their backs to his in any one day. In a five-day week, the manager will have picked up 60 screaming monkeys—far too many to do anything about them individually. So he spends his subordinate-imposed time juggling his “priorities.” Late Friday afternoon, the manager is in his office with the door closed for privacy so he can contemplate the situation, while his subordinates are waiting outside to get their last chance before the weekend to remind him that he will have to “fish or cut bait.” Imagine what they are saying to one another about the manager as they wait: “What a bottleneck. He just can’t make up his mind. How anyone ever got that high up in our company without being able to make a decision we’ll never know.” Worst of all, the reason the manager cannot make any of these “next moves” is that his time is almost entirely eaten up by meeting his own boss-imposed and systemimposed requirements. To control those tasks, he needs discretionary time that is in turn denied him when he

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is preoccupied with all these monkeys. The manager is caught in a vicious circle. But time is a-wasting (an understatement). The manager calls his secretary on the intercom and instructs her to tell his subordinates that he won’t be able to see them until Monday morning. At 7 pm, he drives home, intending with firm resolve to return to the office tomorrow to get caught up over the weekend. He returns bright and early the next day only to see, on the nearest green of the golf course across from his office window, a foursome. Guess who? That does it. He now knows who is really working for whom. Moreover, he now sees that if he actually accomplishes during this weekend what he came to accomplish, his subordinates’ morale will go up so sharply that they will each raise the limit on the number of monkeys they will let jump from their backs to his. In short, he now sees, with the clarity of a revelation on a mountaintop, that the more he gets caught up, the more he will fall behind. He leaves the office with the speed of a person running away from a plague. His plan? To get caught up on something else he hasn’t had time for in years: a weekend with his family. (This is one of the many varieties of discretionary time.) Sunday night he enjoys ten hours of sweet, untroubled slumber, because he has clear-cut plans for Monday. He is going to get rid of his subordinate-imposed time. In exchange, he will get an equal amount of discretionary time, part of which he will spend with his subordinates to make sure that they learn the difficult but rewarding managerial art called “The Care and Feeding of Monkeys.”

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The manager will also have plenty of discretionary time left over for getting control of the timing and the content not only of his boss-imposed time but also of his system-imposed time. It may take months, but compared with the way things have been, the rewards will be enormous. His ultimate objective is to manage his time.

Getting Rid of the Monkeys The manager returns to the office Monday morning just late enough so that his four subordinates have collected outside his office waiting to see him about their monkeys. He calls them in one by one. The purpose of each interview is to take a monkey, place it on the desk between them, and figure out together how the next move might conceivably be the subordinate’s. For certain monkeys, that will take some doing. The subordinate’s next move may be so elusive that the manager may decide—just for now—merely to let the monkey sleep on the subordinate’s back overnight and have him or her return with it at an appointed time the next morning to continue the joint quest for a more substantive move by the subordinate. (Monkeys sleep just as soundly overnight on subordinates’ backs as they do on superiors’.) As each subordinate leaves the office, the manager is rewarded by the sight of a monkey leaving his office on the subordinate’s back. For the next 24 hours, the subordinate will not be waiting for the manager; instead, the manager will be waiting for the subordinate. Later, as if to remind himself that there is no law against his engaging in a constructive exercise in the interim, the manager strolls by the subordinate’s office, sticks his

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head in the door, and cheerily asks, “How’s it coming?” (The time consumed in doing this is discretionary for the manager and boss imposed for the subordinate.) When the subordinate (with the monkey on his or her back) and the manager meet at the appointed hour the next day, the manager explains the ground rules in words to this effect: At no time while I am helping you with this or any other problem will your problem become my problem. The instant your problem becomes mine, you no longer have a problem. I cannot help a person who hasn’t got a problem. When this meeting is over, the problem will leave this office exactly the way it came in—on your back. You may ask my help at any appointed time, and we will make a joint determination of what the next move will be and which of us will make it. In those rare instances where the next move turns out to be mine, you and I will determine it together. I will not make any move alone.

The manager follows this same line of thought with each subordinate until about 11 am, when he realizes that he doesn’t have to close his door. His monkeys are gone. They will return—but by appointment only. His calendar will assure this.

Transferring the Initiative What we have been driving at in this monkey-on-theback analogy is that managers can transfer initiative back

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THE DELEGATION CHECKLIST by Peter Bregman When it comes to delegating effectively, communication is key. Most of us think we communicate well, which is why we often inadvertently leave out important information. Sometimes we assume that the people to whom we’re delegating share our understanding. Or we resist clarifying something because we don’t want to insult the person. Thankfully, there’s a simple solution to ensure projects you delegate will transfer well: Create a checklist and use it during every handoff. Before you pass off a project, complete the delegation checklist with the person who’ll be taking on the responsibility. Reviewing the list together ensures that you transfer all important information. With the following questions as a starting point, add or delete some to suit your particular situation. It takes no longer than 10 minutes to complete the checklist, but it could save you countless dropped balls and service failures.

to their subordinates and keep it there. We have tried to highlight a truism as obvious as it is subtle: namely, before developing initiative in subordinates, the manager must see to it that they have the initiative. Once the manager takes it back, he will no longer have it and he can kiss his discretionary time good-bye. It will all revert to subordinate-imposed time.

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Delegation Checklist • What do you understand the priorities of this project to be? • What are your next key steps, and by when do you plan to accomplish them? • What key contingencies should you plan for now? • When will you next check in with me on progress/issues? • Who else needs to know our plans, and how will you communicate them? • What concerns or ideas do you have that we haven’t already discussed? Adapted from content posted on hbr.org on January 25, 2011. Peter Bregman is a strategic adviser to CEOs and their leadership teams. His latest book is 18 Minutes: Find Your Focus, Master Distraction, and Get the Right Things Done.

Nor can the manager and the subordinate effectively have the same initiative at the same time. The opener, “Boss, we’ve got a problem,” implies this duality and represents, as noted earlier, a monkey astride two backs, which is a very bad way to start a monkey on its career. Let us, therefore, take a few moments to examine what we call “The Anatomy of Managerial Initiative.”

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There are five degrees of initiative that the manager can exercise in relation to the boss and to the system:

1. wait until told (lowest initiative); 2. ask what to do; 3. recommend, then take resulting action; 4. act, but advise at once; 5. and act on own, then routinely report (highest initiative). Clearly, the manager should be professional enough not to indulge in initiatives 1 and 2 in relation either to

TIPS FOR DELEGATING EFFECTIVELY • Recognize the capabilities of your employees and trust their ability to get the job done. • Consider delegation a development opportunity—a way to broaden your people’s skills. • Focus on results and let go of your need to get involved in how tasks are accomplished. • Explain assignments clearly and provide resources needed for successful completion. • Always delegate to the lowest possible level to make the best use of staff resources. Adapted from Pocket Mentor: Managing Projects (product #1878), Harvard Business Review Press, 2006.

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the boss or to the system. A manager who uses initiative 1 has no control over either the timing or the content of boss-imposed or system-imposed time and thereby forfeits any right to complain about what he or she is told to do or when. The manager who uses initiative 2 has control over the timing but not over the content. Initiatives 3, 4, and 5 leave the manager in control of both, with the greatest amount of control being exercised at level 5. In relation to subordinates, the manager’s job is twofold. First, to outlaw the use of initiatives 1 and 2, thus giving subordinates no choice but to learn and master “Completed Staff Work.” Second, to see that for each problem leaving his or her office there is an agreed-upon level of initiative assigned to it, in addition to an agreedupon time and place for the next manager-subordinate conference. The latter should be duly noted on the manager’s calendar.

The Care and Feeding of Monkeys To further clarify our analogy between the monkey on the back and the processes of assigning and controlling, we shall refer briefly to the manager’s appointment schedule, which calls for five hard-and-fast rules governing the “Care and Feeding of Monkeys.” (Violation of these rules will cost discretionary time.)

Rule 1 Monkeys should be fed or shot. Otherwise, they will starve to death, and the manager will waste valuable time on postmortems or attempted resurrections.

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Rule 2 The monkey population should be kept below the maximum number the manager has time to feed. Subordinates will find time to work as many monkeys as he or she finds time to feed, but no more. It shouldn’t take more than five to 15 minutes to feed a properly maintained monkey.

Rule 3 Monkeys should be fed by appointment only. The manager should not have to hunt down starving monkeys and feed them on a catch-as-catch-can basis.

Rule 4 Monkeys should be fed face to face or by telephone, but never by mail. (Remember—with mail, the next move will be the manager’s.) Documentation may add to the feeding process, but it cannot take the place of feeding.

Rule 5 Every monkey should have an assigned next feeding time and degree of initiative. These may be revised at any time by mutual consent but never allowed to become vague or indefinite. Otherwise, the monkey will either starve to death or wind up on the manager’s back.

“Get control over the timing and content of what you do” is appropriate advice for managing time. The first order of business is for the manager to enlarge his or her discretionary time by eliminating subordinate-imposed time.

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The second is for the manager to use a portion of this newfound discretionary time to see to it that each subordinate actually has the initiative and applies it. The third is for the manager to use another portion of the increased discretionary time to get and keep control of the timing and content of both boss-imposed and system-imposed time. All these steps will increase the manager’s leverage and enable the value of each hour spent in managing management time to multiply without theoretical limit.

William Oncken, Jr., was chairman of the William Oncken Corporation until his death in 1988. His son, William Oncken III, now heads the company. Donald L.

Wass was president of the William Oncken Company of Texas when the article first appeared. He now heads the Dallas–Fort Worth region of The Executive Committee (TEC), an international organization for presidents and CEOs.

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Chapter 16

Levels of Delegation by Linda A. Hill and Kent Lineback

If you think that delegation is appropriate only for employees who’ve already demonstrated complete competence in an area, then you may be trapped in this vicious cycle: Until your employee has the opportunity to perform an activity by herself, she’ll never develop the necessary skill and experience to do it well. But until she does it well, you’ll continue to believe that you must be involved—either by performing the task yourself or by micromanaging her so closely she never learns to do it independently. Here’s a way to think about delegation as three levels corresponding to your direct reports’ increasing levels of competence:

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Use with someone who has some experience, perhaps someone who’s observed others and should be ready to act on her own

Prep: Ask her to describe her plan for doing the work and the various “What . . . ?” questions. Satisfy yourself that she’s well prepared and ready. Explain constraints or boundaries. Agree on what constitutes success. Coach as necessary. Make sure she understands the reason for doing the work and why it’s important. See whether she can link to team purpose and goals.

Do: Let her do the work, perhaps with you present observing, perhaps alone, depending on the situation and your judgment of her readiness.

Review: Ask for her self-assessment of how it went, in terms of both skill and will. What went well and what could be improved? Then, if you were present, give your assessment and discuss any differences. Identify lessons. Focus on tangible outcomes and specific behaviors. If you couldn’t be present, ask others who were there. Reach agreement with her about what should be different or better next time.

Use with someone about to do work he’s never or rarely done before

Prep: Here the problem is more likely one of skill versus will, so describe how to do the work and coach him through the steps involved. Make clear the boundaries: budget, strategy, policy, and so on. If appropriate, take him through practice runs. If the problem is also one of will, set the activity in the context of the team’s work and its purpose and goals. Make sure he understands the consequences of possible outcomes.

Do: At first, you do the work as he observes. If the consequences of failure are low, you could observe while he performs the task.

Review: Walk through what you (or he) did. Answer questions. Identify lessons. Have him describe how he would do it next time.

Review: If this was routine work and it had a good or expected outcome, you won’t have a review discussion except as part of a periodic general performance review. If it was more than routine work or the outcome was unexpected, ask for his self-assessment of what happened and what might be learned from it.

Do: He conducts the discussion without your involvement or presence.

Prep: Leave the prep to him. Involve yourself only if the work—say, a discussion he will have with an important prospective customer—is unusually important to team purpose and goals. If it is, ask for his preparatory thinking. Provide clear direction and boundaries. Agree on success. Here the issue may be more one of will than skill, so make sure he understands the importance and consequences of the action.

Use with someone who has actually demonstrated competence

Delegation level 3 High delegation—low control

Source: Reprinted with permission from Being the Boss: The 3 Imperatives for Becoming a Great Leader by Linda A. Hill and Kent Lineback. Harvard Business Review Press, 2011.

Delegation level 2 Moderate delegation—moderate control

Delegation level 1 Low delegation—high control

Section 5

Create Rituals

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Chapter 17

Ritual How to Get Important Work Done by Tony Schwartz

Most of us feel pulled in more directions than ever, expected to work longer hours, and asked to get more done, often with fewer resources. But we also know people who get lots done, including the important stuff, and still manage to have lives. What have they figured out that the rest of us haven’t? The answer, surprisingly, isn’t that they have more will or discipline than we do. The counterintuitive secret to getting things done is to make them more automatic, so they require less energy. How do we do that? By developing rituals—highly specific behaviors, done at precise times, so they

Adapted from content posted on hbr.org on May 24, 2011.

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eventually become automatic and no longer require conscious will or discipline. Decide what behavior you want to change, design the ritual you’ll undertake, and then get out of your own way. Over the past decade, I’ve built a series of rituals into my daily schedule to make sure that I get to the most important things—and that I don’t get derailed by the endlessly alluring trivia of everyday life. Here are four of the rituals that have made the biggest difference to me:

1. Going to bed at the same time every night. This ritual ensures that I get eight hours of sleep. Nothing is more critical to the way I feel every day. If I’m flying somewhere and know I’ll arrive too late to get my eight hours, I make it a priority to make up the hours I need on the plane. 2. Working out as soon as I wake up. Since exercise has a huge impact on how I feel all day long, this ritual ensures that I work out even when I don’t feel like it. 3. Launching my workday by focusing first on whatever I’ve decided the night before is my most important activity. Then I take a break after 90 minutes to refuel. Today—which happens to be a Sunday—this blog was my priority. My break was playing tennis for an hour. During the week it might be chatting with a colleague for a few minutes or getting a snack. (Working 114

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in 90-minute segments throughout your day can be another useful ritual to develop. See the next article, “Power Through Your Day in 90-Minute Cycles,” to learn more.) 4. Immediately writing down on a list any idea or task that occurs to me over the course of the day. Once it’s on paper, it means I don’t walk around feeling preoccupied by it—or risk forgetting it. Obviously, I’m human and fallible, so I don’t perform every one of these rituals every day. But when I do miss one, I pay the price, and feel even more pulled to it the next day.

Tony Schwartz is the president and CEO of The Energy Project and the author of Be Excellent at Anything. Become a fan of The Energy Project and connect with Tony on Twitter at @tonyschwartz and @energy_project.

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Chapter 18

Power Through Your Day in 90-Minute Cycles by Tony Schwartz

For nearly a decade, I’ve begun my workdays by focusing for 90 minutes, uninterrupted, on the task I decide the night before is the most important to tackle the following day. After 90 minutes, I take a break. When my break is up, I begin the cycle again. To make this possible, I turn off my e-mail while I’m working, close unnecessary windows on my computer, and let the phone go to voice mail. I typically get more work done and feel more satisfied than I do for any comparable period of time the rest of the day. It can be tough on some days to fully focus Adapted from content posted on hbr.org on May 24, 2011.

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for 90 minutes, but I always have a clear stopping time, which makes it easier. I launched this practice because my energy, will, and capacity for intense focus diminish as the day wears on. Anything really challenging that I put off tends not to get done, and it’s the most difficult work that generally produces the greatest value. Usually, that means a challenge that is “important but not urgent,” to use Steven Covey’s language. These are precisely the types of activities we most often postpone in favor of those that are more urgent, easier to accomplish, or provide more immediate gratification. (See “How to Stay Focused on What’s Important,” earlier in this guide.) I first made this discovery while writing a book. At the time, I’d written three previous books. For each one, I’d dutifully sit down at my desk at 7 am and I’d often stay there until 7 pm. I never finished a book in less than a year. Looking back, I probably spent more time avoiding writing than I did actually writing. I made lists, responded to e-mail, answered the phone, and kept my desk clean and my files well organized. There were days I never got to writing at all. It was incredibly frustrating. For my new book, The Way We’re Working Isn’t Working, I wrote without interruptions for three 90-minute periods and took a break between each one. I had breakfast after the first session, went for a run after the second, and had lunch after the third. I wrote no more than 4 ∏ hours a day, and finished the book in fewer than six months. By writing in several cycles of 90 minutes each

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and building in periods of renewal, I was able to focus far more intensely and get more done in less time. What made me so productive? Creating the ritual of tackling the most important work at the start of the day and working with my body’s natural rhythms. At the heart of making this work is to build highly precise, deliberate rituals, done at specific times, so they eventually become automatic and don’t require much expenditure of energy or self-discipline, akin to brushing your teeth at night. Pioneering sleep researcher Nathaniel Kleitman observed that our bodies operate by the same 90-minute “basic rest-activity” cycle during the day that we do when we sleep. When we’re awake, we move from higher to lower alertness every 90 minutes. This “ultradian rhythm,” researcher Peretz Lavie and others have found, governs our energy levels. The human body is hardwired to pulse, and requires renewal at regular intervals, not just physically, but also mentally and emotionally. Many of us unwittingly train ourselves to ignore signals from our body that we need a rest—difficulty concentrating, physical restlessness, irritability. Instead, we find ways to override this need with caffeine, sugar, and our own stress hormones—adrenalin, noradrenalin, and cortisol—all of which provide short bursts of energy but impair our ability to consistently focus on our work for a significant period of time. By intentionally aligning with my body’s natural rhythms, I’ve learned to listen to its signals. When I notice them, it usually means I’ve hit the 90-minute mark.

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At that point, I take a break, even if I’m on a roll, because I’ve learned that if I don’t, I’ll pay the price later in the day. When I’m not working on a book, I still choose the next day’s most important work the night before, because I don’t want to squander energy thinking about what to do during the time I’ve set aside to actually work. I start at a very specific time, because when I don’t, I give myself license to procrastinate. Ideally you’ll be able to divide up your day into several 90-minute focused work segments, with brief periods of renewal in between each. However, it’s not always possible to structure your days this way. So make it a high priority to find at least one time a day to focus singlemindedly on your most challenging and important task.

Tony Schwartz is the president and CEO of The Energy Project and the author of Be Excellent at Anything. Become a fan of The Energy Project on Facebook and connect with Tony on Twitter at @tonyschwartz and @energy_project.

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Chapter 19

An 18-Minute Plan for Managing Your Day by Peter Bregman

I began my day yesterday with the best intentions. I walked into my office in the morning with a vague sense of what I wanted to accomplish. Then I sat down, turned on my computer, and checked my e-mail. Two hours later, after fighting several fires, solving other people’s problems, and dealing with whatever happened to be thrown at me through my computer and phone, I could hardly remember what I had originally set out to do. Most of us start every day knowing we’re not going to get it all done. So how we spend our time is a key strategic decision. That’s why it’s a good idea to create both a to-do list and a to-don’t list.

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But even with those lists, the challenge—as always—is execution. How can you stick to a plan when so many things threaten to derail it? How can you focus on just a few important tasks when so many others require your attention? We need a trick. Jack LaLanne, the fitness guru, knew all about tricks. He had one trick that I believe was his real secret power. Ritual. At the age of 94, he still spent the first two hours of his day exercising. Ninety minutes lifting weights and 30 minutes swimming or walking. Every morning. He needed to do so to achieve his goals: on his 95th birthday he planned to swim from the coast of California to Santa Catalina Island—a distance of 20 miles. So he worked consistently and deliberately. He did the same things day in and day out. He cared about his fitness and he built it into his schedule. Managing our time needs to become a ritual, too. Not simply a list or a vague sense of our priorities. That’s not consistent or deliberate. It needs to be an ongoing process we follow, no matter what, to keep us focused on our priorities throughout the day. We can do it in three steps that take fewer than 18 minutes over an eight-hour workday:

1. (5 minutes): Set Your Plan for the Day. Before turning on your computer, sit down with a blank piece of paper and decide what will make this day highly successful. What can you real-

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istically accomplish that will further your goals and allow you to leave at the end of the day feeling productive? Write those things down. Now, most important, take your calendar and schedule those things into time slots, placing the hardest and most important items at the beginning of the day—before checking your e-mail. If your entire list doesn’t fit into your calendar, reprioritize your list. There is tremendous power in deciding when you’re going to do something. (See “How to Tackle Your To-Do List,” earlier in this guide.) 2. (1 minute every hour): Refocus. Set your watch, phone, or computer to ring every hour. When it rings, take a deep breath, look at your list, and ask yourself: Am I doing what I most need to be doing right now? Then look at your calendar and deliberately recommit to how you’re going to use the next hour. Manage your day hour by hour. Don’t let the hours—or the inevitable interruptions—manage you. 3. (5 minutes at end of day): Review. Shut off your computer and review your day. What worked? Where did you focus? Where did you get distracted? What did you learn that will help you be more productive tomorrow? The power of rituals is their predictability: You do the same thing in the same way over and over again. And the

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outcome of a ritual is predictable, too. If you choose your focus deliberately and wisely and consistently remind yourself of that focus, you will stay focused. This particular ritual may not help you swim 20 miles through the ocean or live to be 100. But it may just help you leave your office feeling productive and successful. And, at the end of the day, isn’t that a higher priority?

Peter Bregman  is a strategic adviser to CEOs and their leadership teams. His latest book is 18 Minutes: Find Your Focus, Master Distraction, and Get the Right Things Done.

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Chapter 20

Use a 10-Minute Diary to Stay on Track by Teresa Amabile and Steven Kramer

What’s the best way to use the last 10 minutes of your day? Many productivity gurus recommend an end-of-the-day meeting with yourself to review your to-do list, check how you’re doing against short- and long-term goals, or select the most challenging project you’ll tackle the following day. Our research suggests that not only should you do an end-of-day review, but you’ll reap the greatest benefits for your productivity and personal well-being if you actually record your thoughts in a “mini-diary.” A work diary will improve your focus, track your progress, and make you more satisfied with your work—which will help you be even more productive.

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No question: This reflective time is often the first thing that we drop when we’re feeling overloaded. Adding a daily writing assignment—the word “diary” conjures up a long-term commitment—seems counterproductive to making headway on “real” work. So try it for just one month, focusing on just one short-term project (for example, developing a departmental staffing plan), or just one area of professional development (improving your presentation skills). Take 10 minutes at the end of each workday, write no more than 100 words, and see what you’ve learned after four weeks. You may be surprised. You’ll get five benefits from keeping a work diary. You:

1. Track your progress. The diary is a record of your “small wins,” incremental steps toward meaningful goals, that can boost your motivation—if only you take a moment to reflect on them. 2. Plan. You use the diary as a tool for drafting your next steps. 3. Fuel personal growth. The diary gives you a way of working through your difficult—even traumatic—events, gaining new perspectives on them. 4. Sharpen your focus. You identify your strengths, passions, and challenges by looking at patterns in your entries over time. For example, your diary may reveal that you’ve been spending a lot of time on low-priority issues. Reviewing your diary and identifying 126

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this pattern can help you recommit to focusing your time and energy on your most important work. 5. Develop patience. The diary serves as a reminder during frustrating days that, in the past, you’ve persevered through days that, at the time, seemed even worse. Our research shows that, of all these benefits, using a work diary to track your progress may be the most important one for your productivity and psychological wellbeing. As part of a massive study on the psychology of everyday work life, we collected nearly 12,000 diary entries from 238 professionals working on complex, creative projects. Our analyses revealed a big surprise. Of all the things that could make people feel both happy and highly motivated to dig into their work, the single most important event was simply making progress in work they cared about. We call this the progress principle, and it applies even when the progress is an incremental small win. When we see we’re making progress, we’re motivated to keep going, and it’s easier to keep our focus—even when we encounter setbacks. Witness this example, from the diary of a software engineer in our study: Today, when I started work [. . .] there was a note from a user regarding some work I had done for him. It was very complimentary and it made me feel pretty good. Also in the note was a request to go ahead with an enhancement to the database analysis package. I was able to code and load this request today in less than the

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estimated time, which makes me feel good. And I know it will please our user when he comes in tomorrow.

That entry probably took fewer than five minutes to write. Yet, at the end of the day, that engineer was quite happy—and seems motivated toward high productivity the next day, too. Making progress, and noting it, can provide a real lift—and give you the boost you need to keep working on the projects that will yield the greatest benefit for your organization and its customers. Daily writing and review helps in negative situations, too. In the following entry, an employee struggles to gain a sense of control during a traumatic event in her company—a downsizing. Even though her own job might still be in jeopardy, her work diary helps her shape a healthy perspective; it enables her to focus on her work, amid swirling gossip and uncertainty. Her personal growth is almost palpable in this entry: This morning, my project manager came over and sat next to me and asked me if I was okay after all the layoffs that went on yesterday. I thought that was really nice. We all had a very rough day yesterday, but I feel better today. In 45 days, we will all know our fate, and then we can get on with our lives one way or the other. The outcome of all this is really out of our control. I’m trying to concentrate on what IS in my control, by doing my job.

And here, in his final entry for our study, a professional tells us directly how valuable it was for him to fill

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out the diary questionnaire that we sent every day during his project: I did find value in doing the questionnaires, especially when I was disciplined enough to do them at the end of the day, when everything was still fresh in my mind. It helped me to reflect on the day, my accomplishments, the team’s work, and how I was feeling in general. When you’re working at a hectic pace, reflection time is rare, but [it’s] really beneficial.

Don’t dismiss the idea of trying a work diary because you think you have to create finely-crafted entries for posterity. We’ve found that if you avoid making a big commitment to it, you’ll be more successful. Don’t worry about how to express yourself. Simply describe one event or insight from the day. In our study, the average length of the entries was a mere 54 words. To get started: • Pick a time. Consider when you’re most likely to have ten minutes to yourself. Ideally, this will be the same time each day, because it’s much easier to get into the habit that way. For some of us, that will be the very end of the day, just before bed. For others, it’s at the end of the workday, or on the train ride home. • Create a memory trigger. Choose something you’ll see or hear at the designated writing time. For example, if you want to do the diary before you leave the office at 5:00, set a repeating alarm in your

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calendar for 4:50. If you choose bedtime, put your diary notebook and a pen on your bedside table. • Select a medium. Find something you enjoy using. People have very different preferences for diarykeeping. Some love a leather-bound, monogrammed, silk-bookmarked, five-year diary, with just a few pre-ruled lines for each day. Others like online journaling programs (like iDoneThis). Whether it’s a Word doc, a note app, a spiralbound notebook to an Excel spreadsheet, use whatever works for you. • Reflect on your day. Some people discover what they think as they write, but most of us need a bit of time to collect our thoughts. Use the first three minutes to let your mind go to any one of these types of events from the day:

– Progress . . . and what led to it. (Congratulate yourself!) – Setbacks . . . and what might have caused them. (Learn from them!) – Something good. (Feel grateful!) – Something difficult. (Get it off your chest!) – One thing you can do tomorrow to make your work go better. (Then plan how to do it!) – Anything else that dominates your reflection time.

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• Write. Use the remaining seven minutes to jot down your thoughts. Don’t give a thought to grammar, proper sentence construction, style, etc. Focus on the event. • Review. Once in a while, take a few minutes to sit down with your journal and a favorite beverage in a comfy chair. Much of the value in a diary comes from periodically reviewing the past few days (or more). Keep a diary for just one project, for just a few weeks, and you might find it’s a productivity tool you don’t want to give up.

Teresa Amabile is the Edsel Bryant Ford Professor of Business Administration at Harvard Business School. She researches what makes people creative, productive, happy, and motivated at work. Steven Kramer is a psychologist and independent researcher. They are coauthors of The Progress Principle (Harvard Business Review Press, 2011).

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Section 6

Renew Your Energy

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Chapter 21

How to Accomplish More by Doing Less by Tony Schwartz

We know that it’s not just the number of hours we sit at our desks that determines the value we generate. It’s the energy and focus we bring to those hours. Human beings are designed to pulse rhythmically between spending and renewing energy. That’s how we operate at our best. Maintaining a steady reservoir of energy—physically, mentally, emotionally, and even spiritually—requires refueling intermittently. Take for example, two people of equal skill—Bill and Nick—who work in the same office. Each day they arrive at work at 9:00 am and leave at 7:00 pm. Adapted from content posted on hbr.org on December 13, 2011.

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Bill works for 10 hours—essentially without stopping—juggling tasks at his desk and running between meetings all day long. He even eats lunch at his desk. By 1:00 pm, Bill’s feeling tired and beginning to lose focus. Between 4:00 and 7:00 pm, he’s really dragging and easily distracted. It’s the law of diminishing returns. Because he doesn’t take breaks to renew his energy, Bill effectively delivers about 6 hours of productive work over his 10hour day—about 60% of his capacity. Now contrast that with Nick. He puts in the same 10 hours as Bill. But rather than working essentially without stopping, Nick paces himself: he works intensely for approximately 90 minutes at a stretch, and then takes a 15-minute break before resuming work. At 12:15, he goes out for lunch for 45 minutes or works out in a nearby gym. At 3:00 pm, he goes out to his car and takes a brief rest. Sometimes it turns into a 15- or 20-minute nap. Finally, between 4:30 and 5:00, he takes a 15-minute walk outside. Nick takes off a total of two hours during his 10 at work, so he “only” puts in 8 hours. But because he’s building in periods of renewal with scheduled breaks, he’s able to work at 80% percent of his full capacity over the course of the whole day—20% more than Bill. Cycling through periods of work and rest allows Nick to be more focused and alert than Bill, to make fewer mistakes, and to return home at night with more energy left for his family. Work the way Nick does, and you’ll get more done, in less time, at a higher level of quality, more sustainably.

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Learn how to manage your energy, not your time, in the next article.

Tony Schwartz is the president and CEO of The Energy Project and the author of Be Excellent at Anything. Become a fan of The Energy Project on Facebook and connect with Tony on Twitter at @tonyschwartz and @energy_project.

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Chapter 22

Manage Your Energy, Not Your Time A summary of the full-length HBR article by Tony Schwartz and Catherine McCarthy, highlighting key ideas.

THE IDEA IN BRIEF Is your job demanding more from you than ever before? Do you feel as if you’re working additional hours but rarely getting ahead? Is your mobile device leashing you to your job 24/7? Do you feel exhausted, disengaged, sick? Spending longer days at the office and putting in extra hours at home doesn’t work because your time is a limited resource. But your personal energy is renewable. By fostering deceptively simple rituals that will help you regularly replenish your energy, you can strengthen your 139

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physical, emotional, mental, and spiritual resilience. These rituals include taking brief breaks at specific intervals, expressing appreciation to others, reducing interruptions, and spending more time on the activities you do best and enjoy most.

THE IDEA IN PRACTICE Try these practices to renew the four dimensions of your personal energy:

Physical Energy • Enhance your sleep by setting an earlier bedtime and reducing alcohol use. • Reduce stress by engaging in cardiovascular activity at least three times a week and strength training at least once a week. • Eat small meals and light snacks every three hours. • Learn to notice signs of imminent flagging energy, including restlessness, yawning, hunger, and difficulty concentrating. • Take brief but regular breaks away from your desk at 90- to 120-minute intervals throughout the day.

Emotional Energy • Defuse negative emotions—irritability, impatience, anxiety, insecurity—through deep abdominal breathing.

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• Fuel positive emotions in yourself and others by regularly expressing appreciation to people in detailed, specific terms through notes, e-mails, calls, or conversations. • Look at upsetting situations through new lenses. Adopt a reverse lens to ask, “What would the other person in this conflict say, and how might he be right?” Use a long lens to ask, “How will I likely view this situation in six months?” Employ a wide lens to ask, “How can I grow and learn from this situation?”

Mental Energy • Reduce interruptions by performing highconcentration tasks away from phones and e-mail. • Respond to voice mails and e-mails at designated times during the day. • Select the most important challenge for the next day the night before. Then make that challenge your first priority when you arrive at work in the morning.

Spiritual Energy • Identify your “sweet spot” activities—those that give you feelings of effectiveness, effortless absorption, and fulfillment. Find ways to do more of these. One executive who hated doing sales reports delegated them to someone who loved that activity.

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• Allocate time and energy to what you consider most important. For example, spend the last 20 minutes of your evening commute relaxing, so you can connect with your family once you’re home. • Live your core values. For instance, if being considerate is important to you but you’re perpetually late for meetings, practice intentionally showing up five minutes early for meetings.

Are You Headed for an Energy Crisis? Take the following quiz to identify which areas of your life could benefit from energy-renewing rituals. Please check the statements below that are true for you:

Body □ I don’t regularly get at least seven to eight hours of sleep, and I often wake up feeling tired. □ I frequently skip breakfast, or I settle for something that isn’t nutritious. □ I don’t work out enough (meaning cardiovascular training at least three times a week and strength training at least once a week). □ I don’t take regular breaks during the day to renew and recharge, or I often eat lunch at my desk, if I eat it at all. 142

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Emotions □ I frequently find myself feeling irritable, impatient, or anxious at work, especially when work is demanding. □ I don’t have enough time with my family and loved ones, and when I’m with them, I’m not always really with them. □ I have too little time for the activities that I most deeply enjoy. □ I don’t stop frequently enough to express my appreciation to others or to savor my accomplishments and blessings.

Mind □ I have difficulty focusing on one thing at a time, and I am easily distracted during the day, especially by e-mail. □ I spend much of my day reacting to immediate crises and demands rather than focusing on activities with longer-term value and high leverage. □ I don’t take enough time for reflection, strategizing, and creative thinking. □ I often work in the evenings or on weekends, and I almost never take an e-mail–free vacation.

Spirit □ I don’t spend enough time at work doing what I do best and enjoy most. 143

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□ There are significant gaps between what I say is most important to me and how I actually allocate my time and energy. □ My decisions at work are more often influenced by external demands than by a strong, clear sense of my own purpose. □ I don’t invest enough time and energy in making a positive difference to others or to the world.

How Is Your Overall Energy? Total number of statements checked: ____

Guide to energy scores 0–3: Excellent energy management skills 4–6: Reasonable energy management skills 7–10: Significant energy management deficits 11–16: A full-fledged energy management crisis

What Do You Need to Work On? Number of checks in each category: Body ____ Mind ____ Emotions ____ Spirit ____

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Guide to category scores 0: Excellent energy management skills 1: Strong energy management skills 2: Significant deficits 3: Poor energy management skills 4: A full-fledged energy crisis

Tony Schwartz ([email protected]) is the president and CEO of The Energy Project in New York City, and a coauthor of The Power of Full Engagement: Managing Energy, Not Time, Is the Key to High Performance and Personal Renewal (Free Press, 2003).

Catherine McCarthy ([email protected]) is a senior vice president at The Energy Project.

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Chapter 23

Why Great Performers Sleep More by Tony Schwartz

Why is sleep one of the first things we’re willing to sacrifice as the demands in our lives keep rising? We continue to live by a remarkably durable myth: Sleeping one hour less will give us one more hour of productivity. In reality, even small amounts of sleep deprivation take a significant toll on our health, mood, cognitive capacity, and productivity.

How Much Sleep Do You Need? When researchers put test subjects into environments without clocks or windows and ask them to sleep any Adapted from content posted on hbr.org on March 3, 2011.

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time they feel tired, 95% sleep between seven and eight hours out of every 24. Another 2.5% sleep more than eight hours. That means just 2.5% of us require fewer than seven hours of sleep a night to feel fully rested. That’s one out of every 40 people. In my talks, when I ask who has had fewer than seven hours of sleep several nights during the past week, the majority raise their hands. That’s true whether it’s an audience of corporate executives, teachers, cops, or government workers. Great performers are an exception. Typically, they sleep significantly more than the rest of us. In Anders Ericsson’s famous study of violinists, the top performers slept an average of eight and a half hours out of every 24, including a 20- to 30-minute midafternoon nap—some two hours a day more than the average American. The top violinists also reported that except for practice itself, sleep was the most important factor in improving their skills. As I gathered research about sleep, I felt increasingly compelled to give it higher priority in my own life. Today, I go to great lengths to ensure that I get at least eight hours every night, and ideally between eight and a half and nine hours, even when I’m traveling. I still take the overnight redeye from California to New York, but I’m asleep by takeoff—even if I have to take a sleeping aid. When I get home at 6:00 or 7:00 am, I go right to bed until I’ve had my eight hours. What I’ve learned about those days is that I’d rather work at 100% for five or six hours than at 60% for eight or nine hours. With sufficient sleep, I feel better, I work with more focus, and I manage my emotions better, which is good for 148

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WHAT PEOPLE ARE SAYING ON HBR.ORG Try the coffee nap—Lifehacker had a great article about [naps]. I’m a paramedic and I’ve used this trick for ages. Fix a cup of coffee so you can drink it quickly. Set up the spot where you’ll nap and then drink the coffee. Set a timer for 20 minutes and make sure you get up when it goes off. Any longer and you’ll feel worn out. I know this has saved my life on many late-night, longdistance transports. —Posted by John

everyone around me. I dislike enduring even a single day when I haven’t had enough sleep because the impact is immediate and unavoidable. On the rare days that I don’t get enough, I try hard to get at least a 20- to 30-minute nap in the afternoon. That’s a big help.

How to Get More Sleep Here are three other tips to improve the quantity and quality of your sleep: • Write down what’s on your mind before you get

into bed. If you leave items such as unfinished to-do’s and unresolved issues in your working memory, they’ll make it harder to fall asleep, and you’ll end up ruminating about them if you wake up during the night. • Go to bed earlier—and at a set time. Sounds obvious, right? The problem is there’s no alternative. You’re already waking up at the latest possible time 149

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you can. If you don’t ritualize a specific bedtime, you’ll find ways to stay up later, just the way you do now. • Start winding down at least 45 minutes before you

turn out the light. You won’t fall asleep if you’re all wound up from answering e-mail or doing other work. Create a ritual around drinking a cup of herbal tea, listening to music that helps you relax, or reading a dull book.

Tony Schwartz is the president and CEO of The Energy Project and the author of Be Excellent at Anything. Become a fan of The Energy Project on Facebook and connect with Tony on Twitter at @tonyschwartz and @energy_project.

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Section 7:

Take Control of Your E-mail

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Chapter 24

Simplify Your E-mail by Gina Trapani

If you spend more time dealing with e-mail than getting the right work done, it’s time for an e-mail makeover.

Clear Out Your In-Box Computer scientists developed e-mail based on the paradigm of postal mail, so think of your in-box like your physical mailbox. You wouldn’t keep bills you have to pay and the invitation to that birthday party in there forever, right? Sort by sender, date, or subject line to clear out your messages as efficiently as possible. Then delete the junk; unsubscribe from newsletters you never read or websites you no longer visit. If you have thousands of messages in your main folder, business writer Amy Gallo Adapted from content posted on hbr.org on June 9, 2009.

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suggests creating a new subfolder in your Archive folder called “Old In-box” and putting all of your messages in there. You’ll still have access to them if you need them, but you’ll be able to jump-start your new e-mail process without the drudgery of actually reviewing every old message.

Set Up Just Three Folders Sometimes it’s not just the sheer volume of messages that makes e-mail management a time-sink, it’s the complicated folder system we’ve concocted. Streamline your inbox by creating these three folders:

Follow-up: For messages you have to respond to or act on that will take longer than a couple of minutes. (Put a corresponding item on your to-do list for each of these messages.)

Hold: For messages where you’re waiting for something to happen, like a package shipment or event invitation. (Put a corresponding item on your calendar for each of these messages.)

Archive: For messages you’re done with but want to keep for reference.

Maintain Your New System Once you’ve cleaned out your in-box, you’ll want to keep it organized and manageable, so you can focus your attention on your most important work. Here are some techniques to keep your e-mail under control:

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• Process your e-mail in batches. Most of us are on e-mail all day, scanning for anything urgent and ignoring everything else, which is how backlog accumulates in your in-box. Instead of checking every time you hear the incoming message “ding,” process your e-mail in batches. Completely shut down your e-mail or set it and your handheld to check for messages only every few hours. Then, when you have time or are in between tasks, fully commit yourself to processing new messages. Alexandra Samuel, cofounder of Social Signal, recommends selecting specific times when you’ll process e-mail (for example, 8:00 to 10:00 am and 4:00 to 6:00 pm). Notify correspondents and colleagues of your schedule through your e-mail signature or a note on your blog (and clear this approach with your supervisor, if applicable). Assume that if it’s an emergency, people will call you—but refrain from actually suggesting that, since you don’t want to encourage a constantly ringing phone. • Use the “two-minute” rule. As you process your e-mail in batches, reply to any messages that will take fewer than two minutes on the spot. Don’t delay and leave them in your in-box marked as read, thinking you’ll get back to them; don’t even file them away in “Follow-up.” Just take care of them immediately. To help keep you within the twominute mark, try answering all e-mails in three sentences or fewer (visit Three.Sentenc.es), says Dave Kerpen, CEO of Likeable Media. Anything

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that takes more text probably requires a quick call instead. Have your team or department try this as a group experiment, and watch your collective e-mail–processing time shrink. • End “Reply all.” Kerpen also recommends using internal social networking tools instead of e-mail to chat with your coworkers, facilitate collaboration and passive listening, and eliminate the dreaded “Reply all” e-mail chains. Try a private, closed Facebook group. Or explore proprietary tools such as Jive and Yammer, which allow organizations to set up private social networking platforms. Jive is best for large enterprises, while Yammer is suitable for departments or smaller organizations. Get an on-the-spot answer and get on with your work. • Stop spamming people. Samuel notes that a major contributor to e-mail overload is the widely held expectation that every e-mail must get a reply, even if it’s just “OK” or “Thanks.” Don’t do it. For more suggestions on keeping your e-mail under control, see the next article, “Eight E-mail Overload Experiments.”

Gina Trapani is the founding editor of the personal productivity blog Lifehacker.com.

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Chapter 25

Eight E-mail Overload Experiments by Alexandra Samuel

If you’ve tried all of the basic ways to structure and manage your e-mail, but are still feeling overwhelmed, here are eight road-tested experiments for battling e-mail overload that range from reasonable to radical. Try each one, or a couple at a time—but push yourself to the very limits of your comfort zone, because the tactics that seem most inconceivable may be just the ones that help you discover a new way to work more effectively with e-mail. If your company’s culture includes expecting instant replies to every message, e-mail your colleagues and regular correspondents to let them know about your experiment. This will help avoid ruffled feathers over some of the more radical suggestions.

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1. Reject the mandatory reply. Set up an autoresponder that lets all correspondents know that you’re only replying to selected e-mail, depending on your availability and priorities— and make it clear you don’t expect a reply to every e-mail you send them, either. Here’s one version: SUBJECT: Limited e-mail means I may not reply to the message you sent Thank you for getting in touch. I’m experimenting with a new approach to e-mail: I’m sending and replying to a smaller number of messages. I still check e-mail regularly, so if you don’t get a reply within 72 hours please assume I have reviewed and filed your message. This approach should help me focus my attention on my current priorities. Thank you for your understanding. For a less extreme solution, add a polite line to your standard e-mail signature. Here’s mine: Alexandra Samuel, PhD Director, Social + Interactive Media Centre, Emily Carr University [email protected] | Twitter @awsamuel Join the fight against e-mail overload: •Focus on your priorities; I’ll understand if you don’t reply. •Sorry if I don’t reply; I’m trying to focus, too. •If it’s urgent, reach me by Twitter or SMS. 158

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2. Set message quotas. For outbound messages, limit the number of e-mail threads you initiate each day. Assume that every e-mail you send will generate 4–10 responses, so you’re creating work for yourself with each message. Send fewer, and you’ll get fewer. For incoming messages, guesstimate the number and make that your daily quota. Use filters in your e-mail software to sort incoming mail and keep all but the most crucial messages out of your in-box. Auto-file other messages in alternative folders. Keep adding rules until your daily in-box volume falls below the quota you’ve set. For example, I automatically direct e-mails into different folders for internal mail, messages I’m cc’d on, social network notifications, and more. My closest colleagues know that any e-mail marked “URGENT” still comes directly to my in-box; you might set your rules to ensure that all messages from your boss come through marked as high priority or color coded in a way that makes them stand out. The filters thin the incoming messages to a manageable level and ensure that e-mails from current or prospective clients don’t get lost in a sea of spam. 3. Reply by phone. You can eliminate dozens of e-mails a day with quick calls. A five-minute chat about a landmine your project just stumbled on may be more efficient than crafting an 159

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e-mail that adequately explains the situation. Also, thank people in person or by phone, even if that means leaving a voice mail (detailed thanks for project work, however, should always go by e-mail, so the recipient can file it for performance reviews). Most crucially, switch to phone or in-person communication whenever you get a message that angers or hurts you, because e-mail exchanges tend to escalate and solidify grievances. 4. Do not copy. Refuse to send, read, or reply to cc’ed messages. As blogging entrepreneur Anil Dash puts it, including someone as a cc on an e-mail is like saying “This is important enough for me to interrupt you [with] but not to write to you [about directly].” If a message you’re sending requires a recipient’s attention, include that person in the “to” field; if not, leave them off entirely. Tell colleagues they should address messages to you directly if they need you to reply. 5. Don’t touch that phone! When you have a few minutes between meetings or while waiting for a plane, don’t use that time to respond to e-mail on your mobile’s tiny keyboard. Rather than send a rash or typo-ridden reply, wait until you’re back at your desk or with your laptop or tablet, when you can craft a better response in less time.

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6. Take an e-mail vacation: Try a two-week vacation, a six-month sabbatical, or something in between. But it’s not much of a break if you come back to an overflowing in-box, so before you tune out, turn on the vacation autoresponder with a message like this: Thanks for your message. I’m taking an e-mail vacation until the new year. The message you’ve just sent me has been filed, so it’s not lost forever, but if you need a reply it would be great if you could e-mail me sometime on or after January 4. If you need to reach me urgently, I’ll be available by Twitter or mobile phone. Set your e-mail program to file everything in a folder labeled “Vacation,” and when you return, take a quick look for any truly life-changing messages you may have missed and actively ignore the rest. If someone really wants to reach you, they’ll e-mail again. 7. Reply to every e-mail: If ignoring e-mail makes your palms sweat, maybe it’s time to give into its primacy. For two weeks, make your entire morning an e-mail processing zone. (If three hours isn’t enough, block as big a chunk of time as you think you’ll need.) See whether your commitment to a 100% response rate makes you more effective. This will help you make some conscious decisions about how

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to better allocate your time and triage your in-box. 8. Give up e-mail altogether: For the ultimate in in-box liberation, give it up. Yes, you really can—especially if you’re comfortable with social media tools. Use your blog to post updates on your work instead of sending an e-mail to a big distribution list; Basecamp or another project management tool to communicate with project teams; Google Docs to circulate drafts; Skype for a quick conversation instead of a 14-message exchange; and Twitter DMs, chat, and SMS for tight, efficient, and confidential messaging. Take your e-mail address off your business card and Web page, and encourage anyone who needs to reach you to pick up the phone.

Alexandra Samuel is the Director of the Social + Interactive Media Centre at Emily Carr University, and the cofounder of Social Signal, a Vancouver-based social media agency. You can follow Alex on Twitter at @awsamuel or her blog at alexandrasamuel.com.

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Section 8

Maintain Your New Approach

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Chapter 26

Sustaining Your Productivity System by Alexandra Samuel

A productivity system is like any other faith: It works for as long as you continue to believe in it. Let a hint of skepticism creep in—about the discipline required, the rewards promised, or the potential superiority of other ideologies—and the threat of disorder quickly returns. If you can accept that your system is a work in progress, it’s a lot easier to keep that threat at bay. Here are some tips for sustaining your productivity system:

1. Focus on outcomes. Many productivity methodologies are so specific about their recommended processes that your zeal for maintaining your folders, sorting your communications, 165

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or acquiring snazzy storage bins can easily eclipse the problems or benefits that motivated you in the first place. Remember that adherence to a system is a false god: Don’t stick to it just because you bought the book or the software. If you’re working effectively and meeting your deadlines, it doesn’t matter if you no longer geocode your task list. 2. Make micro commitments. When you embrace a new productivity religion, adopt its minor practices as well as its major ones. Sometimes the smaller commitments are the most sustainable. For example, two years after I got serious about In-box Zero, I no longer process my in-box to empty every day. But my e-mail is still dramatically easier to manage, thanks to the various filters I initially set up as part of my in-box zero approach. 3. Find fellow adherents. One of my big stumbling blocks with David Allen’s book Getting Things Done was Allen’s denunciation of hanging folders; my file cabinet only worked with hanging files. Happily, I thought to Google “GTD hanging files,” and discovered a community of enthusiasts discussing the merits of various folder styles—and even brands—with the seriousness of Talmudic scholars. Reading about how other people implemented and adjusted the system liberated me from my slavish

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adherence to every detail. You can also make your own adherents: Marnie Webb, the CEO of nonprofit tech resource CompuMentor/ TechSoup, keeps a shelf full of copies of Getting Things Done. “When one of my team members complains about not being able to manage their lists or having too much to do, I pull a book off my shelf,” Webb says. “I tell them to complain again after they’ve implemented [GTD] for three months.” 4. Schedule routine maintenance. A few years ago I sorted all the junk in our home office into beautifully labeled boxes. Six months later, a friend observed that whether you opened a box labeled “Bills to Pay” or “Pens and Highlighters,” you were guaranteed to find a pad of Post-its, an iPod adapter, a handful of batteries, and 37 cents in change. Now I know that getting organized isn’t enough—to stay organized, I have to set aside a couple of days every 4–6 months so that I can reestablish order and update my systems. (This is one of my favorite ways to make productive use of the few days after a major trip or project wrap-up, when I’m too brain-dead to do anything more demanding.) 5. Anticipate obsolescence. Even the best productivity systems and tips may not survive the passage of time and the advent of new

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technologies. So stick with software tools that provide options for exporting your data to .csv, iCal, or other standard formats, so you don’t get trapped by any one platform. 6. Embrace eclecticism. Troy Angrignon, vice president of sales and marketing at Cloudscaling, is religious about tracking his tasks and goals using a single, two-column document whose structure borrows from just about every productivity guru out there—Brian Tracy, David Allen, Robert Fritz. While combining approaches might amount to apostasy in the eyes of any one system’s adherents, it’s allowed Angrignon to develop a customized method that’s served him well for 15 years, even as he continues to make adjustments and sample new tools. You may also find that tweaking your productivity system, whether it’s trying out a new calendaring approach or sorting your paper files, is part of your creative process—a way of preparing yourself for a new year or project.

Alexandra Samuel is the Director of the Social + Interactive Media Centre at Emily Carr University, and the cofounder of Social Signal, a Vancouver-based social media agency. You can follow Alex on Twitter at @awsamuel or her blog at alexandrasamuel.com.

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Section 9

Explore Further

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Chapter 27

More Productivity Books to Explore by Ilan Mochari

This guide provides a wide range of tactics and tips for improving your productivity. If you wish to explore further, we’ve summarized the approaches of three other experts: Stephen Covey, Julie Morgenstern, and David Allen.

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The Seven Habits of Highly Effective People, by Stephen R. Covey The Basic Idea: This is a guide to changing your life, not just the way you manage your day. To zero in on the best ways to spend your time and energy, focus on things you can control, keep your desired outcomes (for both individual projects and your life overall) in mind, improve your personal and professional relationships, nurture yourself, and classify your tasks as urgent or important.

Ideal if you:

Not ideal if you:

•Want to transform how you live. For example, you can break old habits like procrastination, but it will require work on your character, not just your productivity practices. •Have spiritual leanings and want to develop mission statements for different areas of your life (“I want to raise two self-confident children” or “I’m here to deliver smart and media-savvy public relations services to my customers. I will draw on my industry knowledge, my understanding of my clients and their challenges, and a genuine passion for what I do.”). •Enjoy a longer read, rich with personal anecdotes and scholarly references.

•Are happy with your life outside work and simply want a nutsand-bolts system for managing workflow. •Will roll your eyes at phrases like “opening the gate of change,” “emotional bank account,” and “abundance mentality.” •Are looking for advice that addresses modern worklife and gadgets. Covey’s advice transcends trends, but his book predates smartphones and social networking. •Are looking for advice on organizing your physical workspace.

Additional resources: franklincovey.com, stephencovey.com, the3rdalternative.com.

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More Productivity Books to Explore

Organizing from the Inside Out, by Julie Morgenstern The Basic Idea: This book will help you organize your physical spaces depending on your personality, needs, and goals. Identify the root cause of your clutter (Is your current system too complex? Are you by nature a packrat?). Find homes for your most important things by using the Kindergarten approach: Divide your space into specific activity zones that have everything necessary to do whatever type of work you’ve assigned to that area, with appropriate supplies and storage units to keep them contained. For example, set up a bill-paying area with everything you need—even if it means duplicates (like postage stamps) in multiple zones.

Ideal if you:

Not ideal if you:

•Literally have trouble finding things. •Want advice about organizing physical spaces (desks, offices, filing systems). •Prefer lists and tips in clearly signposted sections.

•Aren’t a fan of self-reflection. •Are looking for more advice about productivity or time management. •Are looking for a quick fix or an excuse to purge everything. Morgenstern recommends a three-step approach (analyzye, strategize, attack), with a fivestep process for the attack phase.

Additional resources: juliemorgenstern.com, oprah.com/home/More-with-Organizing-ExpertJulie-Morgenstern, amazon.com/Julie-Morgenstern/e/B001IGQY78

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Getting Things Done, by David Allen The Basic Idea: This book will help you gather, evaluate, and make progress on all of your tasks. Don’t rely on your brain to remember everything you have to do. Instead, write it all down in a calendar and series of lists (projects, next actions, waiting for, maybe/someday). Review each task and determine if you should: do it, delegate it, or defer it. When you’re ready to start a new task, use four criteria to decide what to do: context, time available, energy available, priority. Once a week, gather your lists and calendar to review your system, update your lists, and check in with yourself about where you are relative to your workload and schedule.

Ideal if you:

Not ideal if you:

•Want a nuts-and-bolts guide to determining priorities and mastering workflow. •Prefer bulleted lists, diagrams, scattered inspirational quotes, and flowcharts. •Have the authority or resources to delegate. •Are looking for advice on setting up physical work spaces, as well as productivity in general.

•Seek spiritual guidance, too. •Enjoy storytelling or personal anecdotes in your business reading. •Are overwhelmed by setting up elaborate physical filefolder systems. •Aren’t comfortable delegating.

Additional resources: davidco.com, gtdtimes.com, youtube.com/watch?v=Qo7vUdKTlhk

Ilan Mochari is chief writer for The Build Network and a contributor to the MIT Sloan Management Review.

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Chapter 28

Productivity Apps and Tools Here are some apps and websites to further fuel your interest in making the most of your time and energy. This is by no means an exhaustive list—we’ve compiled favorites from some of the most productive members of our hbr.org community: Joshua Gans, Skoll Chair in Innovation and Entrepreneurship, Rotman School of Management, University of Toronto; Heidi Grant Halvorson, PhD, author of Nine Things Successful People Do Differently; Whitney Johnson, author of Dare Dream Do; Dave Kerpen, author of Likeable Social Media; and Andrew McAfee, author of Enterprise 2.0. Since technology is ever-evolving, consider this an inspiration list. For example, if Longer Days is no longer available when you look for it, try a search for virtual assistant to see what new offerings exist.

Manage Your Schedule • Longer Days, Brickwork, and Uassist.ME are just three of dozens of virtual assistant companies 175

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that provide online access to people to help with administrative tasks, such as scheduling meetings and calls, researching individuals’ backgrounds for networking opportunities, marketing research (such as company information or revenue data); other professional functions, such as copywriting and managing event RSVPs; and even personal tasks like scheduling doctor’s appointments. Virtual assistants add extra hands without adding extra headcount. The programs are relatively inexpensive: Longerdays.com offers 20 hours for $350 and Uassist.ME charges $650 per month for about 40 hours/month’s worth of work. —Dave Kerpen • Tungle.Me and Doodle will end those long, painful e-mail chains that often result when you’re trying to set up a meeting with multiple people inside and outside of your organization. Tungle .Me allows people to see your calendar availability and easily schedule meetings and phone calls, and it syncs with most Web and mobile calendar applications. Doodle allows multiple parties to share their availability via poll and quickly find a mutually convenient date and time for an event. —Dave Kerpen

Make Your Lists • Workflowy is an online tool and app that allows you to better organize yourself by mimicking the way you naturally think. It helps you make a list of

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high-level ideas and tasks and then breaks them into smaller pieces. For example, I’ve started with Personal and Work as my two broad categories. Under “Work,” I’ve created sublists such as Rose Park Advisors, Book launch, and HBR blog. You can subdivide lists like this almost infinitely. —Whitney Johnson • Remember The Milk is an online task manager that allows you to easily track your to-do list from your smartphone. You can add items to your to-do list, set location tags to help you remember to take care of things when you’re out and about, organize tasks by priority, schedule tasks by integrating with popular calendar tools (including Outlook and Google Calendar), and sync everything so that you can see your updated, prioritized list whether you’re at your desk or on the go. —Dave Kerpen • Evernote allows you to capture notes, files, and images and later access them from your tablet, mobile, or computer through a robust search feature. Save favorite Web pages with notes about them, take a picture of a potential location for a future launch party, record your thoughts on your next product idea and add to it whenever and wherever inspiration strikes, or keep your scanned itineraries and travel docs all in one place. Evernote also makes it easy to share notes and documents with friends, classmates, and colleagues. —Dave Kerpen

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Manage Your Reminders • Due is an iPhone app that repeatedly reminds you to do something at a certain time—until you do it. Here’s how it works: You need to remember to write an e-mail to someone but can’t do it right now. With Due, you set your phone to alert you to write the e-mail at a certain time (30 minutes from now, 4 pm). I used to leave myself notes or write on my hand. With Due, I can do the same thing but with more precision. It will continue to beep until I accept the reminder or change the time I want to be reminded. —Joshua Gans • Nudge-mail helps you remember what you need to do when you need to do it. Whether your spouse asks you to pick up milk on your way home or a client requests a draft proposal, Nudge-mail reminds you of the task at the right time. Just forward an e-mail to addresses like “tomorrow@ nudge-mail.com” or “[email protected]” and free your mind to focus on your next important task. —Dave Kerpen

Manage Your Files • If you use multiple computers, work on several projects, and/or have multiple colleagues, try Dropbox. It’s a cloud-based storage utility that eliminates file-related hassles. It puts your files in one folder that all of your devices can access, and synchronizes them in the background without

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your having to lift a finger. It also allows you to share different folders with collaborators. How many times have you tried to send a file via email, only to have a server reject it because it was too big? Just create a Dropbox folder, invite the recipient(s) to share it, and your problems are past tense. —Andrew McAfee • JotNot is an iPhone app that allows you to take a photo of any image or document and instantly turn it into a .pdf—for example, you can sign and fax back a contract in seconds, on the go. —Dave Kerpen

Manage Your Social Media • I don’t know what I would do without HootSuite. It’s a social media dashboard that allows you to monitor and post to all your networks simultaneously. If you blog or use social media for your work, this is a huge timesaver. When I’ve written something new or read something I want to share on my networks, I can let everyone know with a single entry, rather than having to log on to each network separately. I use it to manage my Facebook, Twitter, LinkedIn, and Google+ accounts, and you can also use it with Tumblr, WordPress, and Foursquare. —Heidi Grant Halvorson, PhD • Buffer allows you to schedule Tweets and Facebook messages (and soon, LinkedIn posts) ahead of time, and automatically spaces them out. In five minutes, you can find interesting articles worth

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sharing with colleagues and prospective clients, and be tweeting all day, without actually going to Twitter again. —Dave Kerpen • Rapportive is a browser add-on for Gmail that transforms Gmail’s bland sidebar into a timesaver. Instead of ads, you’ll see social media information about the sender of the e-mail: his picture, links to his profile, recent Tweets, etc. The add-on is available for Firefox, Chrome, and Safari, is free to use, and integrates smoothly with Gmail. This tool obviates the need for a separate search to find out more about new contacts or clients. —Dave Kerpen • Dragon Dictation is a voice-recognition application that allows you to easily dictate text or e-mail messages. Speak into the program and instantly see the transcription. Faster and safer than typing while on the go, you can dictate everything from Tweets to longer e-mail messages. —Dave Kerpen • NutshellMail eliminates the need for multiple visits to your social network accounts. It sends you a daily summary and includes only important information such as Facebook likes, posts, and comments; and Twitter mentions, new followers, and Tweets. —Dave Kerpen

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Index ability development, 18 Allen, David, 23–31 appreciation, expressing, 141 attention, focusing, 25 be-good goals, 16 behaviors focusing on positive, 20–22, 28 rituals for, 113–115, 119 bodily rhythms, 119–120, 135– 137 boss-imposed time, 90–91, 98–99, 100 breaks, 50–51, 119–120, 135–137, 140 calendars, 78–79, 123 coffee nap, 149 commitments being overwhelmed by, 49–52 prioritizing, 39–41, 44 concurrent rewards, 83 control, relinquishing, 96 core values, 142 Covey, Stephen R., 172 cumulative rewards, 83–84

deadlines far away, 57–58 setting, 54, 60, 66–67 delegation checklist, 102–103 effective, 87–107 levels of, 109–110 tips for, 104 diary, work, 125–131 distractions e-mail, 30 impact of, 63–64 managing, 6–7, 141 turning off, 66, 71, 117 e-mail managing, 157–162 responding to, 141 saying no via, 45 simplifying, 153–156 turning off, 71 vacations from, 161 emotional energy, 25, 140–141 employees delegation to, 87–107, 109–110 developing initiative of, 88–89, 101–105

181

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Index

employees (continued) empowering, 94–96 skill development for, 89 trusting relationship with, 95 empowerment, 94–96 end-of-day review, 125 energy cycles, 25, 29–31, 119–120, 135–137 energy management, 139–145 entity theorists, 18 exercise, 114, 140 expectations, lowering your, 59–60 failure allowing for, 16 fear of, 59 fears acknowledging your, 59 sharing your, 59 file management, 178–179 get-better goals, 16–17 Getting Things Done (Allen), 23, 79, 166, 174 goals acting on, 11–12 be-good, 16 get-better, 16–17 long-term, 57–62 monitoring progress toward, 13–14 optimism about, 14–15 setting specific, 10–11 writing down, 44 grit, 17–18 habits, 28, 55–56. See also rituals if-then planning, 11–12, 20–22 “ignore” if-then plans, 21

important tasks, 28, 70–72, 118–119 in-boxes, 153–154 incremental theorists, 18 interruptions. See distractions law of diminishing returns, 136 lists of goals, 44 someday/maybe, 79–80 to-do, 27–28, 50, 60, 61, 73–75, 77–80, 176–177 to-don’t, 121 tools for, 176–177 long lens, 141 long-term projects, 57–62 management time, 87–107 managerial initiative, 103– 105 meetings, with self, 71–72, 125 mental contrasting, 10–11 mental energy, 141 mistakes, allowing for, 16 Morgenstern, Julie, 173 motivation to-go thinking and, 14 using rewards for, 54–55, 81–84 multitasking, 29–30, 63–67 naps, 149 “negation” if-then plans, 21 negative behaviors, replacing with positive, 20–22, 28 negative emotions, 140 90-minute cycles, 114–115, 117–120, 136–137 no, saying, 43–46

182

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Index

optimism realistic, 14–15 unrealistic, 15 Organizing from the Inside Out (Morgenstern), 173 physical energy, 25, 140 planning, if-then, 11–12, 20–22 positive emotions, 141 positive rituals, 28 practice, 17–18 priorities long-term projects and, 60 setting, 4, 36–41, 44, 66, 122–123, 141 problems, delegating to employees, 87–107 procrastination with long-term projects, 57–62 overcoming, 53–56 productive rewards, 82 productivity books on, 171–174 deadlines and, 66–67 impact of multitasking on, 64 priority setting and, 36–38 roadblocks to, 27 sustaining system for, 165–168 techniques for increasing, 23–31 tools for, 175–180 progress monitoring your, 13–14 principle, 54, 127–128 projects, long-term, 57–62 raises, 35–38 realistic optimism, 14–15 regenerative rewards, 81–82 reminders, 54, 62, 123, 129, 178 “replacement” if-then plans, 21

reverse lens, 141 rewards, 54–55, 75, 81–84 rituals developing, 113–115, 119 for energy management, 139–145 positive, 28 for time management, 121– 124 saying no, 43–46 scheduling tools, 175–176 Schwartz, Tony, 23–31 self-control, 18–20 self-discipline, 28 self-imposed time, 90–91 self-monitoring, 13–14 setbacks, 18 Seven Habits of Highly Effective People (Covey), 97, 172 skill development, 15–17, 89 sleep, 140, 147–150 social media tools, 179–180 someday/maybe lists, 79–80 spiritual energy, 25, 141–142 stress, 51, 65, 140 stress hormones, 119 subordinates. See employees system-imposed time, 90–91, 98–100 tasks being overwhelmed by, 49–52 breaking down large, 26, 29, 51, 54, 58, 60, 73 completing easiest first, 50 delegation of, 87–107 doing most important first, 28, 119 focusing on challenging, 50 important, 28, 70–72, 118–119

183

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Index

tasks (continued) prioritizing, 44, 66, 141 reasons for deferring, 53–54 rewards for completing, 81–84 saying no to, 43–46 time-wasting, 39–41 urgent, 69–70, 118 telephone calls, 159–160 temptations, resisting, 18–20 thinking to-date, 13–14 to-go, 14 time management rituals for, 121–124 tips for, 106–107 tools for, 4–5, 175–180 to-date thinking, 13–14 to-do lists, 27–28, 50, 60, 61 effective, 73–75

tackling items on, 77–80 tools for, 176–177 to-don’t lists, 121 to-go thinking, 14 trust, 89, 95 ultradian rhythm, 119–120 unrealistic optimism, 15 urgent tasks, 69–70, 118 value creation, 35–38 virtual assistants, 175–176 weekly review, 71–72 wide lens, 141 willpower, 18–20, 28 work diary, 55, 125–131 work-rest ratio, 26, 118–119, 135–137, 140 worth-your-time test, 39–41

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Notes

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Harvard Business Review Guides Arm yourself with the advice you need to succeed on the job, from the most trusted brand in business. Packed with how-to essentials from leading experts, the HBR Guides provide smart answers to your most pressing work challenges.

The titles include: HBR Guide to Better Business Writing HBR Guide to Finance Basics for Managers HBR Guide to Getting the Mentoring You Need HBR Guide to Getting the Right Job HBR Guide to Getting the Right Work Done HBR Guide to Giving Effective Feedback HBR Guide to Making Every Meeting Matter HBR Guide to Managing Stress at Work HBR Guide to Managing Up and Across HBR Guide to Persuasive Presentations HBR Guide to Project Management

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HBR Guide to Managing Stress at Work

HARVARD BUSINESS REVIEW PRESS Boston, Massachusetts

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Copyright 2014 Harvard Business School Publishing Corporation All rights reserved

No part of this publication may be reproduced, stored in or introduced into a retrieval system, or transmitted, in any form, or by any means (electronic, mechanical, photocopying, recording, or otherwise), without the prior permission of the publisher. Requests for permission should be directed to [email protected], or mailed to Permissions, Harvard Business School Publishing, 60 Harvard Way, Boston, Massachusetts 02163. The web addresses referenced in this book were live and correct at the time of the book’s publication but may be subject to change. Library of Congress Cataloging-in-Publication Data HBR guide to managing stress at work. pages cm Includes index. ISBN 978-1-4221-9601-4 (alk. paper) 1. Job stress. I. Harvard business review. HF5548.85.H42 2013 158.7'2—dc23 2013033054

Find more digital content or join the discussion on www.hbr.org.

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What You’ll Learn

Struggling to keep up with your many commitments? Feeling snappish? Unable to sleep? You’re painfully familiar with the signs of work-related stress—chronic headaches, impatience with colleagues and family, loss of focus, fluctuating weight, nails bitten to the quick. And you know what you’re supposed to do to prevent them: Stick to your priorities. Work more efficiently. Get adequate sleep. Exercise regularly. Limit your caffeine. But sometimes, when the pressure’s on, all that is easier said than done. You shortchange yourself to meet a tight deadline or win a new client. True, a certain amount of stress boosts your productivity. But then you push it too far, and it saps your energy and performance. How do you put yourself on an even keel—and stay there? This guide will give you the tools you need to do your best work by protecting and feeding your well-being. You’ll learn how to: • Harness stress so that it spurs your productivity • Create realistic, sustainable rituals

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What You’ll Learn

• Aim for progress, not perfection • Make a case for a flexible schedule • Decide when to set work/life boundaries and when to blur them • Leave a bad day at the office at the office • Ease the physical tension of spending too much time at your computer • Manage a dual-career relationship • Renew yourself physically, mentally, and emotionally

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Contents

Introduction: Nine Ways Successful People Defeat Stress

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Stress is inevitable—but you can take control BY HEIDI GRANT HALVORSON

Section 1: UNDERSTANDING HOW YOU’RE WIRED 1. Are You Working Too Hard? A Conversation with Herbert Benson, MD

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Relax at the height of your struggle BY BRONWYN FRYER

2. Overloaded Circuits: Why Smart People Underperform

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Combat distractibility, inner frenzy, and impatience BY EDWARD M. HALLOWELL

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Section 2: RENEWING YOUR ENERGY 3. Manage Your Energy, Not Your Time

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Use rituals to gain balance and get more done BY TONY SCHWARTZ AND CATHERINE McCARTHY

4. Why Great Performers Sleep More

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It sharpens your focus and helps you manage your emotions more effectively BY TONY SCHWARTZ

Section 3: IMPROVING YOUR WORK/LIFE BALANCE 5. No, You Can’t Have It All

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A framework for managing your toughest trade-offs BY ERIC C. SINOWAY

6. Making Time Off Predictable—and Required

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Break the cycle of 24/7 responsiveness BY LESLIE A. PERLOW AND JESSICA L. PORTER

7. Winning Support for Flexible Work

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Propose a schedule that benefits everyone—not just you BY AMY GALLO

8. How Two-Career Couples Stay Happy

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It’s hard, but possible, to balance two big jobs and one healthy relationship BY JACKIE COLEMAN AND JOHN COLEMAN

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 9. Don’t Take a Bad Day Home with You

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Leave on a high note BY JOHN BALDONI

Section 4: FINDING THE TOOLS THAT WORK FOR YOU 10. Positive Intelligence

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Change your relationship with stress BY SHAWN ACHOR

11. Real Leaders Have Real Lives

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Stop juggling and start integrating BY STEWART D. FRIEDMAN

12. A Practical Plan for When You Feel Overwhelmed

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How to jump in when there’s too much to do BY PETER BREGMAN

13. Desk Yoga: 6 Poses You Won’t Be Embarrassed to Do—Even in an Open Environment

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Work those kinks out of your neck BY LINDA STEINBERG

14. Diversify Yourself

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Be more than your job BY PETER BREGMAN

Index

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Introduction: Nine Ways Successful People Defeat Stress by Heidi Grant Halvorson

Feeling stressed? Of course you are. You have too much on your plate, deadlines looming, and people counting on you. You’re under a lot of pressure—so much that, at times, the quality of your work suffers. But overall, your success on the job doesn’t depend on whether you suffer from intense bouts of stress. These days, nearly all professionals do. What matters is how you deal with them. When your stress levels get out of hand, these nine methods will help you regain balance. Adapted from content posted on hbr.org on December 13, 2012

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1. Cut Yourself Some Slack When you’re feeling overwhelmed, dwelling on your failures and weaknesses won’t solve the problem. You’re better off looking at your mistakes with compassion and remembering that everyone messes up now and then. Research shows that people who do this aren’t just happier, more optimistic, and less anxious and depressed—they’re also more successful. In one study, Berkeley’s Juliana Breines and Serena Chen gave people who had failed a test a chance to retake it and improve their scores. Those with a self-compassionate view of their failure studied 25% longer and scored higher on the second test than participants who weren’t self-compassionate. Most of us believe we need to be hard on ourselves to perform at our best. But by giving yourself permission to make mistakes and learn from them, you can actually reduce your stress and improve your performance.

2. See the Big Picture As you’re facing your mountain of tasks, draw energy and motivation from the larger goals you’re striving for. By thinking about the greater purpose that each action supports, you’ll cast a whole new light on things that don’t seem important or inspiring on their own. Next time you’re slogging through e-mails at the end of a long day, don’t think of it as merely “digging myself out of my inbox.” View it as “wrapping up a critical project on schedule,” for example, or “showing decision makers how committed I am to meeting their goals.” Studies show that when we think about the why behind our behavior, we’re

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Introduction

less impulsive, less vulnerable to temptation, and more likely to plan our actions in advance. We’re more certain of who we are and what we want, and we’re therefore much less likely to feel that outside forces—such as other people, luck, or fate—control what happens to us.

3. Rely on Routines If I asked you to name the major causes of stress in your work life, you’d probably cite deadlines, time-sucking meetings, a heavy workload, bureaucracy, and maybe even a controlling boss. You might not think to say “making decisions,” because most of us aren’t aware of this powerful and pervasive cause of stress in our lives. Yet every time you make a decision—which candidate to hire, when to ask your supervisor for help, whether to delegate a task— you create mental tension that is, in fact, stressful. So use routines to reduce the number of decisions you need to make. U.S. President Barack Obama, who has one of the most stressful jobs imaginable, takes this approach. Here’s what he told Vanity Fair (October 2012) about it: You’ll see I wear only gray or blue suits. I’m trying to pare down decisions. I don’t want to make decisions about what I’m eating or wearing. Because I have too many other decisions to make. You need to focus your decision-making energy. You need to routinize yourself. You can’t be going through the day distracted by trivia.

If there’s something you need to do every day, do it at the same time every day. Establish a ritual for preparing

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Introduction

for work in the morning, for example: Perhaps you can check e-mails and voice mails and respond to the urgent ones first thing, which clears the decks and makes it easier to move more quickly to important projects. Set up a similar routine for packing up to go home at night. Once you’ve put less-important decisions on autopilot, they’ll stop weighing on you—and you’ll free up your energy for things that matter more.

4. Do Something Interesting Interest in an activity doesn’t just keep you going despite fatigue—it actually replenishes your energy for whatever you’ll do next. That’s what Dustin Thoman (California State University), Jessi Smith (Montana State University), and Paul Silvia (University of North Carolina at Greensboro) learned in a recent experiment: They gave participants a particularly draining task and then varied whether the next task was difficult but interesting or relatively easy but dull. The people who received the harder follow-up task put in more effort and performed much better—despite being tired—than those who worked on the easy one. Engagement restored their energy. In another study, the researchers found that interest resulted in better performance on a subsequent task as well. In other words, you won’t just do a better job on Task A because you find Task A interesting—you’ll do a better job on follow-up Task B because you found Task A interesting. The replenished energy flows into whatever you do next. So make time during your day for projects that fascinate you, for brainstorming, and for reading about exciting innovations in your field. All that will help

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you power through your less-interesting but necessary tasks. (You’ll find more examples and ideas in section 2, “Renewing Your Energy.”) Also, remember that interesting doesn’t merely mean pleasant, fun, or relaxing. As the studies cited above show, it’s something that captivates you and requires effort.

5. Add When and Where to Your To-Do List Does a whole day (or even a week) often go by before you check a single item off your lengthy to-do list? Stressful, isn’t it? To get things done in a timely manner, add a specific when and where to each task on your list. If-then planning can help you fill in those blanks. For example, “Call Bob” becomes “If it’s Tuesday after lunch [when], then I’ll call Bob from my desk [where].” Now that you’ve created an if-then plan for calling Bob, your unconscious brain will start scanning the environment, searching for the conditions in the if part of your plan. This enables you to seize the critical moment and make the call, even when you’re busy doing other things. You’ve already done the hard work of deciding what to do; now you can execute the plan without consciously thinking about it. Nearly 200 studies, on everything from negotiation and time management to diet and exercise, show that deciding in advance when and where you will complete a task can double or triple your chances of actually doing it. Bracing yourself for an upcoming presentation? Don’t just fret about it—make a date with yourself to prepare: “If I can reserve a small conference room [where] for an

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hour tomorrow afternoon [when], then I’ll use it to practice going through my slides.”

6. Articulate Your Desired Response When we’re stressed, it can feel as if the universe is conspiring against us. It’s easy to get trapped in a negative spiral, ruminating on everything that’s going wrong— essentially paralyzing ourselves. Perfectionism can similarly trap us. We keep going into the weeds to fix “just one more thing.” Projects never get done because we’re endlessly fiddling with them. How do you break the cycle when it’s your own mind playing tricks on you? Do some additional if-then planning, because it can help you do more than tackle your to-dos. According to research by NYU’s Peter Gollwitzer, it also allows you to control emotional responses such as fear, sadness, fatigue, self-doubt, and even disgust. Just think of the situations that provoke those reactions from you and decide how you would like to respond instead. Then make an if-then plan that links your desired response to the situations that tend to raise your blood pressure. For instance: “If I see lots of e-mails in my inbox when I log in, then I will take three deep breaths to stay calm and relaxed.” Whatever thoughts or actions work for you, make them a part of your if-then plan.

7. Focus on Improving, Not Perfecting We all pursue our goals with one of two mind-sets: what I call the be-good approach, where you focus on proving that you already know what you’re doing, and the get-

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better approach, where you concentrate on developing your abilities and learning new skills. It’s the difference between wanting to show that you are smart and wanting to get smarter. If you’re in be-good mode, expecting to do everything perfectly right out of the gate, you may constantly (often unconsciously) compare yourself with others to see how you size up. And when things don’t go smoothly, you’ll quickly start to doubt the abilities you’re desperately trying to prove, which creates more stress and anxiety. Ironically, worrying about your ability makes you much more likely to fail. A get-better mind-set, by contrast, leads to selfcomparison: You measure how well you’re doing today against how you did yesterday, last month, or last year. When you catch yourself comparing your performance with others’ or being too self-critical, shift your perspective by asking yourself “Am I improving?” (and “If I’m not, what can I do to change that?”). You’ll experience far less stress—and it will be easier to stay motivated, despite any setbacks.

8. Appreciate the Progress That You’ve Already Made “Of all the things that can boost emotions, motivation, and perceptions during a workday, the single most important is making progress in meaningful work.” That’s the central idea in Teresa Amabile and Steven Kramer’s book The Progress Principle. They argue that it’s the “small wins” that keep us going—particularly in the face of stressors.

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So it’s enormously helpful to reflect on what you’ve accomplished so far before turning your attention to the challenges that remain ahead. If you’re stressed by a complex yearlong project six months in, take a moment to list what’s been done since day 1. Remember the difficulties you’ve already encountered and how you dealt with them. Then, with a sense of well-earned confidence, think about how far you have left to go and keep your eyes on the prize.

9. Know What Motivates You Without realizing it, we can add stress to our work lives by managing it in ways that don’t mesh with our own motivational styles. Figuring out what drives you will help you rein in your stress. If it’s optimism, you have what psychologists call a promotion focus: You think of your job as rife with opportunities for achievement. You’re driven by the belief that everything will work out if you apply yourself. You probably also: • Work quickly • Brainstorm lots of alternatives to consider • Plan for best-case scenarios • Seek positive feedback (and lose steam without it) • Feel dejected when things go wrong The best way to cope with your stress is to maintain forward momentum. Motivation feels like eagerness to

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you—it runs on positivity. If you’re feeling stuck, shift to another project and make some progress there before returning to the original obstacle. Also, since you’re someone who needs to stay optimistic to be truly effective, reflect on some of your past triumphs to keep your chin up. By contrast, if you have a prevention focus, you’re motivated by security—and hanging on to what you’ve worked so hard for. You tend to: • Work deliberately, with a high degree of accuracy • Prepare yourself for the worst • Get stressed over short deadlines • Stick to tried-and-true ways of doing things • Feel uncomfortable with praise or optimism • Get anxious when things go wrong For you, managing stress at work largely means avoiding mishaps and fulfilling your responsibilities. It feels like vigilance, and it’s sustained by a kind of defensive pessimism—the need to keep danger at bay. In fact, it feels downright wrong to “stay positive” when you’re under stress. You actually work best when you think about what might go awry and what you can do to keep that from happening (or how you’ll respond if it happens, anyway). When you’re dealing with potential budget cuts, for example, you cope most effectively by preempting the problem—figuring out where you can trim some of the fat, just in case. To others, this might seem like wallowing

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in negativity and making your life needlessly stressful (after all, the budget cuts might not happen), but you’re actually alleviating stress by considering all possible scenarios and solutions and planning accordingly. You’re working to minimize your losses. We all take different views (promotion versus prevention) at different times, depending on which challenges we’re facing. But most of us have a dominant motivational style. Identify yours, and then embrace either the sunny outlook or the hearty skepticism that will reduce your stress and keep you performing at your best.

The nine ideas I’ve shared here are just a start. You’ll find many other useful tips in this guide—practical advice from experts on how to balance work and family, how to refill your tank when you’re running on fumes, and tools to use when you’re completely overwhelmed. If you’re currently under a lot of pressure, you may want to skip ahead to section 4, “Finding the Tools That Work for You.” Here’s the main thing to remember as you read: When it comes to stress, you are far from powerless. You may not be able to remove the stressors from your life, but you can take control of how they affect you. Stress doesn’t have to interfere with your productivity, your health, and your happiness. You can even learn to harness its power for good by viewing stress-inducing challenges as opportunities to become more skilled and resilient.

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Heidi Grant Halvorson is associate director for the Motivation Science Center at Columbia Business School. She’s the author of Nine Things Successful People Do Differently (Harvard Business Review Press, 2012) and Focus: Use Different Ways of Seeing the World for Success and Influence (Hudson Street Press, 2013). Follow her on Twitter: @hghalvorson.

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Section 1

Understanding How You’re Wired

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Chapter 1

Are You Working Too Hard? A Conversation with Herbert Benson, MD by Bronwyn Fryer

A summary of the full-length HBR interview with Herbert Benson, MD, highlighting key ideas.

THE IDEA IN BRIEF The key to overcoming negative stressors is the breakout principle, or relaxing at the height of your struggle. There are four steps: Adapted from Harvard Business Review, November 2005 (product #R0511B)

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Understanding How You’re Wired

1. Take on a thorny problem, and really work hard at it until you feel you have reached the limits of your performance. 2. Walk away. Do something entirely different, such as breathing deeply while focusing on a calm phrase or taking a nap or hot shower. 3. Let go. This is the actual breakout, where you experience a flow of creative ideas and solutions. 4. Return to the “new-normal” sense of selfconfidence. Do the breakout sequence whenever you need to—and achieve gains in productivity and success.

When does stress help your performance, and when does it hurt? To find out, HBR senior editor Bronwyn Fryer talked with Herbert Benson, MD, founder of the Mind/ Body Medical Institute in Chestnut Hill, Massachusetts. Also an associate professor of medicine at Harvard Medical School, Benson has spent more than 35 years conducting research in the fields of neuroscience and stress. He is best known for his 1975 best-seller, The Relaxation Response. He first described a technique to bring forth the complex physiological dance between stress and relaxation, and the benefits to managers of practices such as meditation, in “Your Innate Asset for Combating Stress” (HBR July–August 1974). His most recent book is Relaxation Revolution (Scribner, 2011) with William Proctor.

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Are You Working Too Hard?

Benson and Proctor have found that we can learn to use stress productively by applying the breakout principle—a paradoxical active-passive dynamic. By using simple techniques to regulate the amounts of stress we feel, we can increase performance and productivity and avoid burnout. In this edited conversation, Benson describes how we can tap into our own creative insights, boost our productivity at work, and help our teams do the same. He is quick to acknowledge the large part Proctor’s thinking has played in the ideas he discusses here.

HBR: We all know that unmanaged stress can be destructive. But are there positive sides to stress as well? Yes, but let’s define what stress is first. Stress is a physiological response to any change, whether good or bad, that alerts the adaptive fight-or-flight response in the brain and the body. Good stress, also called eustress, gives us energy and motivates us to strive and produce. We see eustress in elite athletes, creative artists, and all kinds of high achievers. Anyone who’s clinched an important deal or had a good performance review, for example, enjoys the benefits of eustress, such as clear thinking, focus, and creative insight. But when most people talk about stress, they are referring to the bad kind. At work, negative stressors are usually the perceived actions of customers, clients, bosses, colleagues, and employees, combined with demanding deadlines. At the Mind/Body Medical Institute, we also encounter executives who worry incessantly about . . . the

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Understanding How You’re Wired

impact of China on their companies’ markets, the state of the economy, the world oil supply, and so on. Additionally, people bring to work the stress aroused by dealing with family problems, taxes, and traffic jams, as well as anxieties stemming from a continuous diet of bad news that upsets them and makes them feel helpless— hurricanes, politics, child abductions, wars, terrorist attacks, environmental devastation, you name it.

Many companies offer various kinds of stress-reduction programs, from on-site yoga classes and massage to fancy gyms to workshops. What’s wrong with these? It’s critical that companies do something to address the rampant negative effects of workplace stress if they want to compete effectively, but often the kinds of programs they institute are stopgaps. HR may bring in a lecturer once or twice a year or set up tai chi sessions and urge everyone to go, but few people show up because they feel they can’t take the time to eat their lunch, much less spend an hour doing something perceived as both unrelated to work and relaxing to boot. Unless the leadership and culture explicitly encourage people to join in, employees will continue to feel guilty or worry that they’ll be seen as slackers if they go. This state of affairs is inexcusable if you look at the billions lost to absenteeism, turnover, disability, insurance costs, workplace accidents, violence, workers’ compensation, and lawsuits, not to mention the expense of replacing valuable employees lost to stress-related problems. Fortunately, each of us holds the key for managing stress,

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Are You Working Too Hard?

and leaders who learn to do this and help their employees to do likewise can tap into enormous productivity and potential while mitigating these costs.

What is the science behind your research, and what does it reveal? First, let me say that we at the Mind/Body Medical Institute didn’t discover anything new. The American philosopher William James identified the breakout principle in his Varieties of Religious Experience in 1902. What we set about to do was explore the science behind what James had identified. Over the past [several decades], our teams have collected data on thousands of subjects from population studies, physiologic measurements, brain imaging, molecular biology, biochemistry, and other approaches to measuring bodily reactions to stress. From these we identified the relaxation response and could see how powerful it was. It is a physical state of deep rest that counteracts the harmful effects of the fight-or-flight response, such as increased heart rate, blood pressure, and muscle tension. Neurologically, what happens is this: When we encounter a stressor at work—a difficult employee, a tough negotiation, a tight deadline, or worse—we can deal with it for a little while before the negative effects set in. But if we are exposed for excessively long periods to the fight-or-flight response, the pressure on us will become too great, and our system will be flooded with the hormones epinephrine, norepinephrine, and cortisol. These cause blood pressure to rise and the heart rate and brain

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activity to increase, effects that are very deleterious over time. But our . . . findings indicate that by completely letting go of a problem at that point by applying certain triggers, the brain actually rearranges itself so that the hemispheres communicate better. Then the brain is better able to solve the problem. The best way to understand this mechanism is to go back [about] 100 years to the work of two Harvard researchers, Robert Yerkes and John Dodson. In 1908, these two demonstrated that efficiency increases when stress increases, but only up to a point; after that, performance falls off dramatically (see figure 1-1). We found

FIGURE 1-1

The Yerkes-Dodson curve

Performance or efficiency

Stress is an essential response in highly competitive environments. Before a race, before an exam, before an important meeting, your heart rate goes up and so does your blood pressure. You become more focused, alert, and efficient. But past a certain level, stress compromises your performance, efficiency, and eventually your health. Two Harvard researchers, Robert M. Yerkes and John D. Dodson, first calibrated the relationship between stress and performance in 1908, which has been dubbed the Yerkes-Dodson law.

Stress or anxiety

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Are You Working Too Hard?

that by taking the stress level up to the top of the bell curve and then effectively pulling the rug out from under it by turning to a quieting, rejuvenating activity, subjects could evoke the relaxation response, which effectively counteracts the negative effects of the stress hormones. Molecular studies have shown that the calming response releases little “puffs” of nitric oxide, which has been linked to the production of such neurotransmitters as endorphins and dopamine. These chemicals enhance general feelings of well-being. As the brain quiets down, another phenomenon that we call calm commotion—or a focused increase in activity—takes place in the areas of the brain associated with attention, space-time concepts, and decision making. In eliciting the relaxation response, individuals experience a sudden creative insight, in which the solution to the problem becomes apparent. This is a momentary phenomenon. Thereafter, the subjects enter a state of sustained improved performance, which we call the newnormal state, because the breakthrough effect can be remembered indefinitely. We find this to be an intriguing phenomenon. By bringing the brain to the height of activity and then suddenly moving it into a passive, relaxed state, it’s possible to stimulate much higher neurological performance than would otherwise be the case. Over time, subjects who learn to do this as a matter of course perform at consistently higher levels. The effect is particularly noticeable in athletes and creative artists, but we have also seen it among the businesspeople we work with.

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So how can we actually go about tapping into the breakout principle? A breakout sequence occurs in four steps. The first step is to struggle mightily with a thorny problem. For a businessperson, this may be concentrated problem analysis or fact gathering; it can also simply be thinking intently about a stressful situation at work—a tough employee, a performance conundrum, a budgetary difficulty. The key is to put a significant amount of preliminary hard work into the matter. Basically, you want to lean into the problem to get to the top of the YerkesDodson curve. You can tell when you have neared the top of the curve when you stop feeling productive and start feeling stressed. You may have unpleasant feelings such as anxiety, fearfulness, anger, or boredom, or you may feel like procrastinating. You may even have physical symptoms such as a headache, a knot in the stomach, or sweaty palms. At this point, it’s time to move to step two. Step two involves walking away from the problem and doing something utterly different that produces the relaxation response. There are many ways to do this. A 10-minute relaxation-response exercise, in which you calm your mind and focus on your out-breath while disregarding the thoughts you’ve been having, works extremely well. Some people go jogging or pet a furry animal; others look at paintings they love. Some relax in a sauna or take a hot shower. Still others “sleep on it” by taking a nap or getting a good night’s rest, having a meal with friends, or listening to their favorite calming music.

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One male executive I know relaxes by doing needlepoint. All of these things bring about the mental rearrangement that is the foundation for new insights, solutions, and creativity. The key is to stop analyzing, surrender control, and completely detach yourself from the stressproducing thoughts. When you allow your brain to quiet down, your body releases the puffs of nitric oxide that make you feel better and make you more productive. One executive we observed was worried about a big presentation she had to make before some top-level managers. She worked and worked on it, but the harder she worked, the more befuddled she became and the more anxiety took over. Fortunately, she had learned to evoke her relaxation response by visiting the art museum near her office. So she did. After a while, she felt a sense of total release as she stood there looking at her favorite pictures. At that point, she suddenly had the insight that she was trying to cover too many topics at once and needed to pare down the presentation to a single, overriding concept she could illustrate with solid examples. She felt inspired and confident that she had the answer. She went back to the office, redid the presentation, and, feeling relaxed and happy, went home for the day. This third step—gaining a sudden insight—is the actual breakout. Breakouts are also often referred to as peak experiences, flow, or being in the zone. Elite athletes reach this state when they train hard and then let go and allow the muscle memory to take over. They become completely immersed in what they’re doing, which feels automatic, smooth, and effortless. In all cases, a breakout is experienced as a sense of well-being and relaxation

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that brings with it an unexpected insight or a higher level of performance. And it’s all the result of a simple biological mechanism that we can tap into at will. The final step is the return to the new-normal state, in which the sense of self-confidence continues. The manager who reorganized her presentation, for example, came in the next morning knowing all would be well. The meeting did go well, and she received accolades for her work from her bosses and colleagues.

Does a breakout occur all the time or just occasionally? What percentage of people, according to your research, experience breakouts in this way? We don’t yet have hard data on this, but anecdotally I can tell you that when you compare groups of people who have been trained to evoke the relaxation response to groups who lack such training, the former experience breakouts much more frequently. About 25% of people trained in this process, and sometimes many more, can reliably reach the breakout stage. It sometimes takes a serious illness caused or exacerbated by stress for people to have their “aha” moments. One well-known CEO we worked with spent years putting in more than 60 hours a week at his intensely stressful job. He came to us after he had been diagnosed with a silent heart attack. His world had completely turned upside down. He took a leave of absence from work to focus on healing, to ask himself why he was on the planet, and to spend time with his family. We trained him to use

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the relaxation response and the breakout principle. He recovered and came back to work far more resilient and productive than he was before.

Can teams or groups do this together or somehow feed off one another? Certainly. The benefits of mind/body management are by no means limited to individuals. Those who become skilled in these techniques can also expect to have an exponential impact in groups or teams; they can work together to solve organizational problems as part of what we might call a mind/body orchestra. Let me give you an example of how this works. A few years ago, three software executives with whom we had worked spent two days trying to cajole venture capitalists in Singapore to fund several projects having to do with a new kind of encryption technology. They had all thought long and hard about the problems with encryption, both at their home office in the States and in their preparations for the Singapore presentation. This produced significant levels of stress hormones. After the meetings finally ended, the three of them took a cab to the airport. The drive was long, and they all felt they could finally let their hair down and relax. Through no planning on anyone’s part, the environment in the taxi produced the required break from prior thinking patterns and emotions. The sense of relief, the release from days of high stress, the feeling of camaraderie, and the mentally lulling ride in the dark taxi clearly triggered the

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relaxation response. That put them all in a neurological position to focus and think clearly about encryption. The inventor of the technology was the most creative thinker of the three, the one who could best integrate his left- and right-brain functions. He tossed out a thought that had just come to him for a revolutionary product. The others, who were more linear and practical in their thinking style, got excited and chimed in with all kinds of questions and ideas for marketing and selling it. By the end of the cab ride, the trio had fashioned an entirely new encryption product—without taking a single note as the final idea emerged in their minds. They filed a provisional patent three weeks afterward and their final patent application one year later. They are now selling a version of the product as part of a multimillion-dollar enterprise.

Bronwyn Fryer was a senior editor at Harvard Business Review.

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Chapter 2

Overloaded Circuits Why Smart People Underperform by Edward M. Hallowell

IDEA IN BRIEF Frenzied executives who fidget through meetings, miss appointments, and jab at the elevator’s “door close” button aren’t crazy—just crazed. They’re suffering from a newly recognized neurological phenomenon called attention deficit trait (ADT). Marked by distractibility, inner frenzy, and impatience, ADT prevents managers from clarifying priorities, making smart decisions, and managing their time. This insidious condition turns Reprinted from Harvard Business Review, January 2005 (product #R0501E)

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otherwise talented performers into harried underachievers. And it’s reaching epidemic proportions. ADT isn’t an illness or character defect. It’s our brains’ natural response to exploding demands on our time and attention. As data increasingly floods our brains, we lose our ability to solve problems and handle the unknown. Creativity shrivels; mistakes multiply. Some sufferers eventually melt down. How to control ADT’s ravaging impact on performance? Foster positive emotions by connecting faceto-face with people you like throughout the day. Take physical care of your brain by getting enough sleep, eating healthfully, and exercising regularly. Organize for ADT, designating part of each day for thinking and planning, and setting up your office to foster mental functioning (for example, keeping part of your desk clear at all times). These strategies may seem like no-brainers. But they’ll help you vanquish the ADT demon before it can strike.

IDEA IN PRACTICE

How You Can Combat ADT Promote positive emotions Negative emotions—especially fear—can hamper productive brain functioning. To promote positive feelings, especially during highly stressful times, interact directly with someone you like at least every four to six hours. In environments where people are in physical contact with

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people they trust, brain functioning hums. By connecting comfortably with colleagues, you’ll help your brain’s “executive” center (responsible for decision making, planning, and information prioritizing) perform at its best.

Take physical care of your brain Ample sleep, a good diet, and exercise are critical for staving off ADT. You’re getting enough sleep if you can awake without an alarm clock. You’re eating well if you’re avoiding sugar and white flour and consuming more fruits, whole grains, vegetables, and protein instead. You’re exercising enough if you’re taking a brisk walk or going up and down a flight of stairs a few times a day.

Organize for ADT Instead of getting sucked into the vortices of e-mail or voice mail first thing in the morning, attend to a critical task. With paperwork, apply the OHIO (“Only handle it once”) rule: Whenever you touch a document, act on it, file it, or throw it away. Do crucial work during times of the day when you perform at your best. Use whatever small strategies help you function well mentally— whether it’s listening to music or walking around while working, or doodling during meetings. And before you leave for the day, list three to five priority items you’ll need to address tomorrow.

What Your Company Can Do In firms that ignore ADT symptoms, employees underachieve, create clutter, and cut corners. Careless mistakes, illness, and turnover increase, as people squander

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their brain power. To counteract ADT and harness employees’ brainpower, invest in amenities that foster a positive, productive atmosphere. Example: Major software company SAS Institute creates a warm, connected, and relaxed work environment by offering employees perks such as a seven-hour workday that ends at 5:00; large on-site gym and day care facility; and a cafeteria that provides baby seats and high chairs so parents can eat lunch with their children. The payoff? Employees return the favors with high productivity. And SAS’s turnover never exceeds 5%—saving the company millions on recruiting, training, and severance.

David drums his fingers on his desk as he scans the e-mail on his computer screen. At the same time, he’s talking on the phone to an executive halfway around the world. His knee bounces up and down like a jackhammer. He intermittently bites his lip and reaches for his constant companion, the coffee cup. He’s so deeply involved in multitasking that he has forgotten the appointment his Outlook calendar reminded him of 15 minutes ago. Jane, a senior vice president, and Mike, her CEO, have adjoining offices so they can communicate quickly, yet communication never seems to happen. “Whenever I go into Mike’s office, his phone lights up, my cell phone goes off, someone knocks on the door, he suddenly turns to his screen and writes an e-mail, or he tells me about a new issue he wants me to address,” Jane complains.

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“We’re working flat out just to stay afloat, and we’re not getting anything important accomplished. It’s driving me crazy.” David, Jane, and Mike aren’t crazy, but they’re certainly crazed. Their experience is becoming the norm for overworked managers who suffer—like many of your colleagues, and possibly like you—from a very real but unrecognized neurological phenomenon that I call attention deficit trait, or ADT. Caused by brain overload, ADT is now epidemic in organizations. The core symptoms are distractibility, inner frenzy, and impatience. People with ADT have difficulty staying organized, setting priorities, and managing time. These symptoms can undermine the work of an otherwise gifted executive. If David, Jane, Mike, and the millions like them understood themselves in neurological terms, they could actively manage their lives instead of reacting to problems as they happen. As a psychiatrist who has diagnosed and treated thousands of people over the past 25 years for a medical condition called attention deficit disorder, or ADD (now known clinically as attention-deficit/hyperactivity disorder), I have observed firsthand how a rapidly growing segment of the adult population is developing this new, related condition. The number of people with ADT coming into my clinical practice has mushroomed by a factor of 10 in the past decade. Unfortunately, most of the remedies for chronic overload proposed by timemanagement consultants and executive coaches do not address the underlying causes of ADT. Unlike ADD, a neurological disorder that has a genetic component and can be aggravated by environmental and

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physical factors, ADT springs entirely from the environment. Like the traffic jam, ADT is an artifact of modern life. It is brought on by the demands on our time and attention that have exploded over the past two decades. As our minds fill with noise—feckless synaptic events signifying nothing—the brain gradually loses its capacity to attend fully and thoroughly to anything. The symptoms of ADT come upon a person gradually. The sufferer doesn’t experience a single crisis but rather a series of minor emergencies while he or she tries harder and harder to keep up. Shouldering a responsibility to “suck it up” and not complain as the workload increases, executives with ADT do whatever they can to handle a load they simply cannot manage as well as they’d like. The ADT sufferer therefore feels a constant low level of panic and guilt. Facing a tidal wave of tasks, the executive becomes increasingly hurried, curt, peremptory, and unfocused, while pretending that everything is fine. To control ADT, we first have to recognize it. And control it we must, if we as individuals and organizational leaders are to be effective. In the following pages, I’ll offer an analysis of the origins of ADT and provide some suggestions that may help you manage it.

Attention Deficit Cousins To understand the nature and treatment of ADT, it’s useful to know something of its cousin, ADD. Usually seen as a learning disability in children, ADD also afflicts about 5% of the adult population. Researchers using MRI scans have found that people with ADD suffer a slightly diminished volume in four specific brain

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regions that have various functions such as modulating emotion (especially anger and frustration) and assisting in learning. One of the regions, made up of the frontal and prefrontal lobes, generates thoughts, makes decisions, sets priorities, and organizes activities. While the medications used to treat ADD don’t change the anatomy of the brain, they alter brain chemistry, which in turn improves function in each of the four regions and so dramatically bolsters the performance of ADD sufferers. ADD confers both disadvantages and advantages. The negative characteristics include a tendency to procrastinate and miss deadlines. People with ADD struggle with disorganization and tardiness; they can be forgetful and drift away mentally in the middle of a conversation or while reading. Their performance can be inconsistent: brilliant one moment and unsatisfactory the next. ADD sufferers also tend to demonstrate impatience and lose focus unless, oddly enough, they are under stress or handling multiple inputs. (This is because stress leads to the production of adrenaline, which is chemically similar to the medications we use to treat ADD.) Finally, people with ADD sometimes also self-medicate with excessive alcohol or other substances. On the positive side, those with ADD usually possess rare talents and gifts. Those gifts often go unnoticed or undeveloped, however, because of the problems caused by the condition’s negative symptoms. ADD sufferers can be remarkably creative and original. They are unusually persistent under certain circumstances and often possess an entrepreneurial flair. They display ingenuity and encourage that trait in others. They tend to improvise

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well under pressure. Because they have the ability to field multiple inputs simultaneously, they can be strong leaders during times of change. They also tend to rebound quickly after setbacks and bring fresh energy to the company every day. Executives with ADD typically achieve inconsistent results. Sometimes they fail miserably because they’re disorganized and make mistakes. At other times, they perform brilliantly, offering original ideas and strategies that lead to performance at the highest level. David Neeleman, the CEO of JetBlue Airways, has ADD. School was torture; unable to focus, he hated to study and procrastinated endlessly. “I felt like I should be out doing things, moving things along, but here I was, stuck studying statistics, which I knew had no application to my life,” Neeleman told me. “I knew I had to have an education, but at the first opportunity to start a business, I just blew out of college.” He climbed quickly in the corporate world, making use of his strengths—original thinking, high energy, an ability to draw out the best in people—and getting help with organization and time management. Like most people with ADD, Neeleman could sometimes offend with his blunt words, but his ideas were good enough to change the airline industry. For example, he invented the electronic ticket. “When I proposed that idea, people laughed at me, saying no one would go to the airport without a paper ticket,” he says. “Now everyone does, and it has saved the industry millions of dollars.” It seems fitting that someone with ADD would invent a way around having to remember to bring a paper ticket.

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Neeleman believes ADD is one of the keys to his success. Far from regretting having it, he celebrates it. But he understands that he must manage his ADD carefully. Attention deficit trait is characterized by ADD’s negative symptoms. Rather than being rooted in genetics, however, ADT is purely a response to the hyperkinetic environment in which we live. Indeed, modern culture all but requires many of us to develop ADT. Never in history has the human brain been asked to track so many data points. Everywhere, people rely on their cell phones, e-mail, and digital assistants in the race to gather and transmit data, plans, and ideas faster and faster. One could argue that the chief value of the modern era is speed, which the novelist Milan Kundera described as “the form of ecstasy that technology has bestowed upon modern man.” Addicted to speed, we demand it even when we can’t possibly go faster. James Gleick wryly noted in Faster: The Acceleration of Just About Everything that the “close door” button in elevators is often the one with the paint worn off. As the human brain struggles to keep up, it falters and then falls into the world of ADT.

This Is Your Brain While brain scans cannot display anatomical differences between people with “normal” brains and people suffering from ADT, studies have shown that as the human brain is asked to process dizzying amounts of data, its ability to solve problems flexibly and creatively declines and the number of mistakes increases. To find out why, let’s go on a brief neurological journey.

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Blessed with the largest cortex in all of nature, owners of this trillion-celled organ today put singular pressure on the frontal and prefrontal lobes, which I’ll refer to in this article as simply the frontal lobes. This region governs what is called, aptly enough, executive functioning (EF). EF guides decision making and planning; the organization and prioritization of information and ideas; time management; and various other sophisticated, uniquely human, managerial tasks. As long as our frontal lobes remain in charge, everything is fine. Beneath the frontal lobes lie the parts of the brain devoted to survival. These deep centers govern basic functions like sleep, hunger, sexual desire, breathing, and heart rate, as well as crudely positive and negative emotions. When you are doing well and operating at peak level, the deep centers send up messages of excitement, satisfaction, and joy. They pump up your motivation, help you maintain attention, and don’t interfere with working memory, the number of data points you can keep track of at once. But when you are confronted with the sixth decision after the fifth interruption in the midst of a search for the ninth missing piece of information on the day that the third deal has collapsed and the 12th impossible request has blipped unbidden across your computer screen, your brain begins to panic, reacting just as if that sixth decision were a bloodthirsty, man-eating tiger. As a specialist in learning disabilities, I have found that the most dangerous disability is not any formally diagnosable condition like dyslexia or ADD. It is fear. Fear shifts us into survival mode and thus prevents fluid learning and nuanced understanding. Certainly, if a real tiger

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is about to attack you, survival is the mode you want to be in. But if you’re trying to deal intelligently with a subtle task, survival mode is highly unpleasant and counterproductive. When the frontal lobes approach capacity and we begin to fear that we can’t keep up, the relationship between the higher and lower regions of the brain takes an ominous turn. Thousands of years of evolution have taught the higher brain not to ignore the lower brain’s distress signals. In survival mode, the deep areas of the brain assume control and begin to direct the higher regions. As a result, the whole brain gets caught in a neurological catch-22. The deep regions interpret the messages of overload they receive from the frontal lobes in the same way they interpret everything: primitively. They furiously fire signals of fear, anxiety, impatience, irritability, anger, or panic. These alarm signals shanghai the attention of the frontal lobes, forcing them to forfeit much of their power. Because survival signals are irresistible, the frontal lobes get stuck sending messages back to the deep centers saying, “Message received. Trying to work on it but without success.” These messages further perturb the deep centers, which send even more powerful messages of distress back up to the frontal lobes. Meanwhile, in response to what’s going on in the brain, the rest of the body—particularly the endocrine, respiratory, cardiovascular, musculoskeletal, and peripheral nervous systems—has shifted into crisis mode and changed its baseline physiology from peace and quiet to red alert. The brain and body are locked in a reverberating circuit while the frontal lobes lose their sophistication, as

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if vinegar were added to wine. In this state, EF reverts to simpleminded black-and-white thinking; perspective and shades of gray disappear. Intelligence dims. In a futile attempt to do more than is possible, the brain paradoxically reduces its ability to think clearly. This neurological event occurs when a manager is desperately trying to deal with more input than he possibly can. In survival mode, the manager makes impulsive judgments, angrily rushing to bring closure to whatever matter is at hand. He feels compelled to get the problem under control immediately, to extinguish the perceived danger lest it destroy him. He is robbed of his flexibility, his sense of humor, his ability to deal with the unknown. He forgets the big picture and the goals and values he stands for. He loses his creativity and his ability to change plans. He desperately wants to kill the metaphorical tiger. At these moments he is prone to melting down, to throwing a tantrum, to blaming others, and to sabotaging himself. Or he may go in the opposite direction, falling into denial and total avoidance of the problems attacking him, only to be devoured. This is ADT at its worst. Though ADT does not always reach such extreme proportions, it does wreak havoc among harried workers. Because no two brains are alike, some people deal with the condition better than others. Regardless of how well executives appear to function, however, no one has total control over his or her executive functioning.

Managing ADT Unfortunately, top management has so far viewed the symptoms of ADT through the distorting lens of morality

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or character. Employees who seem unable to keep up the pace are seen as deficient or weak. Consider the case of an executive who came to see me when he was completely overloaded. I suggested he talk the situation over with his superior and ask for help. When my client did so, he was told that if he couldn’t handle the work, he ought to think about resigning. Even though his performance assessments were stellar and he’d earned praise for being one of the most creative people in the organization, he was allowed to leave. Because the firm sought to preserve the myth that no straw would ever break its people’s backs, it could not tolerate the manager’s stating that his back was breaking. After he went out on his own, he flourished. How can we control the rampaging effects of ADT, both in ourselves and in our organizations? While ADD often requires medication, the treatment of ADT certainly does not. ADT can be controlled only by creatively engineering one’s environment and one’s emotional and physical health. I have found that the following preventive measures go a long way toward helping executives control their symptoms of ADT.

Promote positive emotions The most important step in controlling ADT is not to buy a superturbocharged BlackBerry and fill it up with to-dos but rather to create an environment in which the brain can function at its best. This means building a positive, fear-free emotional atmosphere, because emotion is the on/off switch for executive functioning. There are neurological reasons why ADT occurs less in environments where people are in physical contact

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and where they trust and respect one another. When you comfortably connect with a colleague, even if you are dealing with an overwhelming problem, the deep centers of the brain send messages through the pleasure center to the area that assigns resources to the frontal lobes. Even when you’re under extreme stress, this sense of human connection causes executive functioning to hum. By contrast, people who work in physical isolation are more likely to suffer from ADT, for the more isolated we are, the more stressed we become. I witnessed a dramatic example of the danger of a disconnected environment and the healing power of a connected one when I consulted for one of the world’s foremost university chemistry departments. In the department’s formerly harddriven culture, ADT was rampant, exacerbated by an ethic that forbade anyone to ask for help or even state that anything was wrong. People did not trust one another; they worked on projects alone, which led to more mistrust. Most people were in emotional pain, but implicit in the department’s culture was the notion that great pain led to great gain. In the late 1990s, one of the department’s most gifted graduate students killed himself. His suicide note explicitly blamed the university for pushing him past his limit. The department’s culture was literally lethal. Instead of trying to sweep the tragedy under the rug, the chair of the department and his successor acted boldly and creatively. They immediately changed the structure of the supervisory system so that each graduate student and postdoc was assigned three supervisors, rather than a single one with a death grip on the trainee’s career. The

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department set up informal biweekly buffets that allowed people to connect. (Even the most reclusive chemist came out of hiding for food, one of life’s great connectors.) The department heads went as far as changing the architecture of the department’s main building, taking down walls and adding common areas and an espresso bar complete with a grand piano. They provided lectures and written information to all students about the danger signs of mental wear and tear and offered confidential procedures for students who needed help. These steps, along with regular meetings that included senior faculty and university administrators, led to a more humane, productive culture in which the students and faculty felt fully engaged. The department’s performance remained first-rate, and creative research blossomed. The bottom line is this: Fostering connections and reducing fear promote brainpower. When you make time at least every four to six hours for a “human moment,” a face-to-face exchange with a person you like, you are giving your brain what it needs.

Take physical care of your brain Sleep, a good diet, and exercise are critical for staving off ADT. Though this sounds like a no-brainer, too many of us abuse our brains by neglecting obvious principles of care. You may try to cope with ADT by sleeping less, in the vain hope that you can get more done. This is the opposite of what you need to do, for ADT sets in when you don’t get enough sleep. There is ample documentation to suggest that sleep deprivation engenders a host of

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problems, from impaired decision making and reduced creativity to reckless behavior and paranoia. We vary in how much sleep we require; a good rule of thumb is that you’re getting enough sleep if you can wake up without an alarm clock. Diet also plays a crucial role in brain health. Many hardworking people habitually inhale carbohydrates, which cause blood glucose levels to yo-yo. This leads to a vicious cycle: Rapid fluctuations in insulin levels further increase the craving for carbohydrates. The brain, which relies on glucose for energy, is left either glutted or gasping, neither of which makes for optimal cognitive functioning. The brain does much better if the blood glucose level can be held relatively stable. To do this, avoid simple carbohydrates containing sugar and white flour (pastries, white bread, and pasta, for example). Rely on the complex carbohydrates found in fruits, whole grains, and vegetables. Protein is important: Instead of starting your day with coffee and a Danish, try tea and an egg or a piece of smoked salmon on wheat toast. Take a multivitamin every day as well as supplementary omega-3 fatty acids, an excellent source of which is fish oil. The omega-3s and the E and B complex contained in multivitamins promote healthy brain function and may even stave off Alzheimer’s disease and inflammatory ills (which can be the starting point for major killers like heart disease, stroke, diabetes, and cancer). Moderate your intake of alcohol, too, because too much kills brain cells and accelerates the development of memory loss and even dementia. As you change your diet to promote optimal brain function

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and good general health, your body will also shed excess pounds. If you think you can’t afford the time to exercise, think again. Sitting at a desk for hours on end decreases mental acuity, not only because of reduced blood flow to the brain but for other biochemical reasons as well. Physical exercise induces the body to produce an array of chemicals that the brain loves, including endorphins, serotonin, dopamine, epinephrine, and norepinephrine, as well as two recently discovered compounds, brain-derived neurotrophic factor (BDNF) and nerve growth factor (NGF). Both BDNF and NGF promote cell health and development in the brain, stave off the ravages of aging and stress, and keep the brain in tip-top condition. Nothing stimulates the production of BDNF and NGF as robustly as physical exercise, which explains why those who exercise regularly talk about the letdown and sluggishness they experience if they miss their exercise for a few days. You will more than compensate for the time you invest on the treadmill with improved productivity and efficiency. To fend off the symptoms of ADT while you’re at work, get up from your desk and go up and down a flight of stairs a few times or walk briskly down a hallway. These quick, simple efforts will push your brain’s reset button.

Organize for ADT It’s important to develop tactics for getting organized, but not in the sense of empty New Year’s resolutions. Rather, your goal is to order your work in a way that suits you, so that disorganization does not keep you from reaching your goals.

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First, devise strategies to help your frontal lobes stay in control. These might include breaking down large tasks into smaller ones and keeping a section of your work space or desk clear at all times. (You do not need to have a neat office, just a neat section of your office.) Similarly, you might try keeping a portion of your day free of appointments, e-mail, and other distractions so that you have time to think and plan. Because e-mail is a wonderful way to procrastinate and set yourself up for ADT at the same time, you might consider holding specific “e-mail hours,” since it isn’t necessary to reply to every e-mail right away. When you start your day, don’t allow yourself to get sucked into vortices of e-mail or voice mail or into attending to minor tasks that eat up your time but don’t pack a punch. Attend to a critical task instead. Before you leave for the day, make a list of no more than five priority items that will require your attention tomorrow. Short lists force you to prioritize and complete your tasks. Additionally, keep torrents of documents at bay. One of my patients, an executive with ADD, uses the OHIO rule: Only handle it once. If he touches a document, he acts on it, files it, or throws it away. “I don’t put it in a pile,” he says. “Piles are like weeds. If you let them grow, they take over everything.” Pay attention to the times of day when you feel that you perform at your best; do your most important work then and save the rote work for other times. Set up your office in a way that helps mental functioning. If you focus better with music, have music (if need be, use earphones). If you think best on your feet, work standing up

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or walk around frequently. If doodling or drumming your fingers helps, figure out a way to do so without bothering anyone, or get a fidget toy to bring to meetings. These small strategies sound mundane, but they address the ADT devil that resides in distracting details.

Protect your frontal lobes To stay out of survival mode and keep your lower brain from usurping control, slow down. Take the time you need to comprehend what is going on, to listen, to ask questions, and to digest what’s been said so that you don’t get confused and send your brain into panic. Empower an assistant to ride herd on you; insist that he or she tell you to stop e-mailing, get off the telephone, or leave the office. If you do begin to feel overwhelmed, try the following mind-clearing tricks. Do an easy rote task, such as resetting the calendar on your watch or writing a memo on a neutral topic. If you feel anxious about beginning a project, pull out a sheet of paper or fire up your word processor and write a paragraph about something unrelated to the project (a description of your house, your car, your shoes—anything you know well). You can also tackle the easiest part of the task; for example, write just the title of a memo about it. Open a dictionary and read a few definitions, or spend five minutes doing a crossword puzzle. Each of these little tasks quiets your lower brain by tricking it into shutting off alarmist messages and puts your frontal lobes back in full control. Finally, be ready for the next attack of ADT by posting the sidebar “Control Your ADT” near your desk where

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CONTROL YOUR ADT In General • Get adequate sleep. • Watch what you eat. Avoid simple, sugary carbohydrates, moderate your intake of alcohol, add protein, stick to complex carbohydrates (vegetables, whole grains, fruit). • Exercise at least 30 minutes at least every other day. • Take a daily multivitamin and an omega-3 fatty acid supplement. At Work • Do all you can to create a trusting, connected work environment. • Have a friendly, face-to-face talk with a person you like every four to six hours. • Break large tasks into smaller ones. • Keep a section of your work space or desk clear at all times. • Each day, reserve some “think time” that’s free from appointments, e-mail, and phone calls. • Set aside e-mail until you’ve completed at least one or two more important tasks. • Before you leave work each day, create a short list of three to five items you will attend to the next day.

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• Try to act on, file, or toss every document you touch. • Don’t let papers accumulate. • Pay attention to the times of day when you feel that you are at your best; do your most important work then, and save the rote work for other times. • Do whatever you need to do to work in a more focused way: Add background music, walk around, and so on. • Ask a colleague or an assistant to help you stop talking on the telephone, e-mailing, or working too late. When You Feel Overwhelmed • Slow down. • Do an easy rote task: Reset your watch, write a note about a neutral topic (such as a description of your house), read a few dictionary definitions, do a short crossword puzzle. • Move around: Go up and down a flight of stairs or walk briskly. • Ask for help, delegate a task, or brainstorm with a colleague. In short, do not worry alone.

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you can see it. Knowing that you are prepared diminishes the likelihood of an attack, because you’re not susceptible to panic.

What Leaders Can Do All too often, companies induce and exacerbate ADT in their employees by demanding fast thinking rather than deep thinking. Firms also ask employees to work on multiple overlapping projects and initiatives, resulting in second-rate thinking. Worse, companies that ask their employees to do too much at once tend to reward those who say yes to overload while punishing those who choose to focus and say no. Moreover, organizations make the mistake of forcing their employees to do more and more with less and less by eliminating support staff. Such companies end up losing money in the long run, for the more time a manager has to spend being his own administrative assistant and the less he is able to delegate, the less effective he will be in doing the important work of moving the organization forward. Additionally, firms that ignore the symptoms of ADT in their employees suffer its ill effects: Employees underachieve, create clutter, cut corners, make careless mistakes, and squander their brainpower. As demands continue to increase, a toxic, high-pressure environment leads to high rates of employee illness and turnover. To counteract ADT and harness employee brainpower, firms should invest in amenities that contribute to a positive atmosphere. One company that has done an excellent job in this regard is SAS Institute, a major software company in North Carolina. The company famously offers its

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employees a long list of perks: a 36,000-square-foot, onsite gym; a seven-hour workday that ends at 5 pm; the largest on-site day care facility in North Carolina; a cafeteria that provides baby seats and high chairs so parents can eat lunch with their children; unlimited sick days; and much more. The atmosphere at SAS is warm, connected, and relaxed. The effect on the bottom line is profoundly positive; turnover is never higher than 5%. The company saves the millions other software companies spend on recruiting, training, and severance (estimated to be at least 1.5 times salary in the software industry). Employees return the favors with high productivity. The forces of ADT that shred other organizations never gain momentum at SAS. Leaders can also help prevent ADT by matching employees’ skills to tasks. When managers assign goals that stretch people too far or ask workers to focus on what they’re not good at rather than what they do well, stress rises. By contrast, managers who understand the dangers of ADT can find ways of keeping themselves and their organizations on track. JetBlue’s David Neeleman, for example, has shamelessly and publicly identified what he is not good at and found ways to deal with his shortcomings, either by delegating or by empowering his assistant to direct him. Neeleman also models this behavior for everyone else in the organization. His openness about the challenges of his ADD gives others permission to speak about their own attention deficit difficulties and to garner the support they need. He also encourages his managers to match people with tasks that fit their cognitive and emotional styles, knowing that no one style

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is best. Neeleman believes that helping people work to their strengths is not just a mark of sophisticated management; it’s also an excellent way to boost worker productivity and morale.

ADT is a very real threat to all of us. If we do not manage it, it manages us. But an understanding of ADT and its ravages allows us to apply practical methods to improve our work and our lives. In the end, the most critical step an enlightened leader can take to address the problem of ADT is to name it. Bringing ADT out of the closet and describing its symptoms removes the stigma and eliminates the moral condemnation companies have for so long mistakenly leveled at overburdened employees. By giving people permission to ask for help and remaining vigilant for signs of stress, organizations will go a long way toward fostering more productive, well-balanced, and intelligent work environments.

Edward M. “Ned” Hallowell, MD, is a psychiatrist and the founder of the Hallowell Center for Cognitive and Emotional Health in Sudbury, Massachusetts. He is the author of Shine: Using Brain Science to Get the Best from Your People (Harvard Business Review Press, 2011).

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Section 2

Renewing Your Energy

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Chapter 3

Manage Your Energy, Not Your Time by Tony Schwartz and Catherine McCarthy

A summary of the full-length HBR article by Tony Schwartz and Catherine McCarthy, highlighting key ideas.

IDEA IN BRIEF Is your job demanding more from you than ever before? Do you feel as if you’re working additional hours but rarely getting ahead? Is your mobile device leashing

Reprinted from Harvard Business Review, October 2007 (product #R0710B)

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you to your job 24/7? Do you feel exhausted, disengaged, sick? Spending longer days at the office and putting in extra hours at home doesn’t work because your time is a limited resource. But your personal energy is renewable. By fostering deceptively simple rituals that will help you regularly replenish your energy, you can strengthen your physical, emotional, mental, and spiritual resilience. These rituals include taking brief breaks at specific intervals, expressing appreciation to others, reducing interruptions, and spending more time on the activities you do best and enjoy most.

IDEA IN PRACTICE Try these practices to renew the four dimensions of your personal energy:

Physical Energy • Enhance your sleep by setting an earlier bedtime and reducing alcohol use. • Reduce stress by engaging in cardiovascular activity at least three times a week and strength training at least once a week. • Eat small meals and light snacks every three hours. • Learn to notice signs of imminent flagging energy, including restlessness, yawning, hunger, and difficulty concentrating.

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• Take brief but regular breaks away from your desk at 90- to 120-minute intervals throughout the day.

Emotional Energy • Defuse negative emotions—irritability, impatience, anxiety, insecurity—through deep abdominal breathing. • Fuel positive emotions in yourself and others by regularly expressing appreciation to people in detailed, specific terms through notes, e-mails, calls, or conversations. • Look at upsetting situations through new lenses. Adopt a reverse lens to ask, “What would the other person in this conflict say, and how might he be right?” Use a long lens to ask, “How will I likely view this situation in six months?” Employ a wide lens to ask, “How can I grow and learn from this situation?”

Mental Energy • Reduce interruptions by performing highconcentration tasks away from phones and e-mail. • Respond to voice mails and e-mails at designated times during the day. • Select the most important challenge for the next day the night before. Then make that challenge your first priority when you arrive at work in the morning.

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Spiritual Energy • Identify your “sweet spot” activities—those that give you feelings of effectiveness, effortless absorption, and fulfillment. Find ways to do more of these. One executive who hated doing sales reports delegated them to someone who loved that activity. • Allocate time and energy to what you consider most important. For example, spend the last 20 minutes of your evening commute relaxing, so you can connect with your family once you’re home. • Live your core values. For instance, if being considerate is important to you but you’re perpetually late for meetings, practice intentionally showing up five minutes early for meetings.

Steve Wanner is a highly respected 37-year-old partner at Ernst & Young, married with four young children. When I met him a year ago, he was working 12- to 14-hour days, felt perpetually exhausted, and found it difficult to fully engage with his family in the evenings, which left him feeling guilty and dissatisfied. He slept poorly, made no time to exercise, and seldom ate healthy meals, instead grabbing a bite to eat on the run or while working at his desk. Wanner’s experience is not uncommon. Most of us respond to rising demands in the workplace by putting

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in longer hours, which inevitably take a toll on us physically, mentally, and emotionally. That leads to declining levels of engagement, increasing levels of distraction, high turnover rates, and soaring medical costs among employees. My colleagues and I at the Energy Project have worked with thousands of leaders and managers in the course of doing consulting and coaching at large organizations during the past five years. With remarkable consistency, these executives tell us they’re pushing themselves harder than ever to keep up and increasingly feel they are at a breaking point. The core problem with working longer hours is that time is a finite resource. Energy is a different story. Defined in physics as the capacity to work, energy comes from four main wellsprings in human beings: the body, emotions, mind, and spirit. In each, energy can be systematically expanded and regularly renewed by establishing specific rituals—behaviors that are intentionally practiced and precisely scheduled, with the goal of making them unconscious and automatic as quickly as possible. To effectively reenergize their workforces, organizations need to shift their emphasis from getting more out of people to investing more in them, so they are motivated—and able—to bring more of themselves to work every day. To recharge themselves, individuals need to recognize the costs of energy-depleting behaviors and then take responsibility for changing them, regardless of the circumstances they’re facing. The rituals and behaviors Wanner established to better manage his energy transformed his life. He set an earlier bedtime and gave up drinking, which had disrupted

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his sleep. As a consequence, when he woke up he felt more rested and more motivated to exercise, which he now does almost every morning. In less than two months he lost 15 pounds. After working out he now sits down with his family for breakfast. Wanner still puts in long hours on the job, but he renews himself regularly along the way. He leaves his desk for lunch and usually takes a morning and an afternoon walk outside. When he arrives at home in the evening, he’s more relaxed and better able to connect with his wife and children. Establishing simple rituals like these can lead to striking results across organizations. At Wachovia Bank, we took a group of employees through a pilot energy management program and then measured their performance against that of a control group. The participants outperformed the controls on a series of financial metrics, such as the value of loans they generated. They also reported substantial improvements in their customer relationships, their engagement with work, and their personal satisfaction. In this article, I’ll describe the Wachovia study in a little more detail. Then I’ll explain what executives and managers can do to increase and regularly renew work capacity—the approach used by the Energy Project, which builds on, deepens, and extends several core concepts developed by my former partner Jim Loehr in his seminal work with athletes.

Linking Capacity and Performance at Wachovia Most large organizations invest in developing employees’ skills, knowledge, and competence. Very few help build

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and sustain their capacity—their energy—which is typically taken for granted. In fact, greater capacity makes it possible to get more done in less time at a higher level of engagement and with more sustainability. Our experience at Wachovia bore this out. In early 2006 we took 106 employees at 12 regional banks in southern New Jersey through a curriculum of four modules, each of which focused on specific strategies for strengthening one of the four main dimensions of energy. We delivered it at one-month intervals to groups of approximately 20 to 25, ranging from senior leaders to lower-level managers. We also assigned each attendee a fellow employee as a source of support between sessions. Using Wachovia’s own key performance metrics, we evaluated how the participant group performed compared with a group of employees at similar levels at a nearby set of Wachovia banks who did not go through the training. To create a credible basis for comparison, we looked at year-over-year percentage changes in performance across several metrics. On a measure called the “Big 3”—revenues from three kinds of loans—the participants showed a year-over-year increase that was 13 percentage points greater than the control group’s in the first three months of our study. On revenues from deposits, the participants exceeded the control group’s year-over-year gain by 20 percentage points during that same period. The precise gains varied month by month, but with only a handful of exceptions, the participants continued to significantly outperform the control group for a full year after completing the program. Although other variables undoubtedly influenced these

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outcomes, the participants’ superior performance was notable in its consistency. (See figure 3-1.) We also asked participants how the program influenced them personally. Sixty-eight percent reported that it had a positive impact on their relationships with clients and customers. Seventy-one percent said that it had a noticeable or substantial positive impact on their productivity and performance. These findings corroborated a raft of anecdotal evidence we’ve gathered about

FIGURE 3-1

How energy renewal programs boosted productivity at Wachovia At Wachovia Bank, employees participating in an energy renewal program outperformed a control group of employees, demonstrating significantly greater improvements in year-over-year performance during the first quarter of 2006. * Percentage increase in loan revenues

Participants

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Percentage increase in deposit revenues Participants

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the effectiveness of this approach among leaders at other large companies such as Ernst & Young, Sony, Deutsche Bank, Nokia, ING Direct, Ford, and MasterCard.

The Body: Physical Energy Our program begins by focusing on physical energy. It is scarcely news that inadequate nutrition, exercise, sleep, and rest diminish people’s basic energy levels, as well as their ability to manage their emotions and focus their attention. Nonetheless, many executives don’t find ways to practice consistently healthy behaviors, given all the other demands in their lives. Before participants in our program begin to explore ways to increase their physical energy, they take an energy audit, which includes four questions in each energy dimension—body, emotions, mind, and spirit. (See the sidebar “Are You Headed for an Energy Crisis?”) On average, participants get eight to 10 of those 16 questions “wrong,” meaning they’re doing things such as skipping breakfast, failing to express appreciation to others, struggling to focus on one thing at a time, or spending too little time on activities that give them a sense of purpose. While most participants aren’t surprised to learn these behaviors are counterproductive, having them all listed in one place is often uncomfortable, sobering, and galvanizing. The audit highlights employees’ greatest energy deficits. Participants also fill out charts designed to raise their awareness about how their exercise, diet, and sleep practices influence their energy levels. The next step is to identify rituals for building and renewing physical energy. When Gary Faro, a vice president

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ARE YOU HEADED FOR AN ENERGY CRISIS? Please check the statements below that are true for you. Body □ I don’t regularly get at least seven to eight hours of sleep, and I often wake up feeling tired. □ I frequently skip breakfast, or I settle for something that isn’t nutritious. □ I don’t work out enough (meaning cardiovascular training at least three times a week and strength training at least once a week). □ I don’t take regular breaks during the day to truly renew and recharge, or I often eat lunch at my desk, if I eat it at all. Emotions □ I frequently find myself feeling irritable, impatient, or anxious at work, especially when work is demanding. □ I don’t have enough time with my family and loved ones, and when I’m with them, I’m not always really with them. □ I have too little time for the activities that I most deeply enjoy. □ I don’t stop frequently enough to express my appreciation to others or to savor my accomplishments and blessings.

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Mind □ I have difficulty focusing on one thing at a time, and I am easily distracted during the day, especially by e-mail. □ I spend much of my day reacting to immediate crises and demands rather than focusing on activities with longer-term value and high leverage. □ I don’t take enough time for reflection, strategizing, and creative thinking. □ I work in the evenings or on weekends, and I almost never take an e-mail–free vacation. Spirit □ I don’t spend enough time at work doing what I do best and enjoy most. □ There are significant gaps between what I say is most important to me in my life and how I actually allocate my time and energy. □ My decisions at work are more often influenced by external demands than by a strong, clear sense of my own purpose. □ I don’t invest enough time and energy in making a positive difference to others or to the world. How Is Your Overall Energy? Total number of statements checked: ___

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ARE YOU HEADED FOR AN ENERGY CRISIS? Guide to scores

0–3: Excellent energy management skills 4–6: Reasonable energy management skills 7–10: Significant energy management deficits 11–16: A full-fledged energy management crisis What do you need to work on?

Number of checks in each category: Body ___ Mind ___ Emotions ___ Spirit ___ Guide to category scores

0: Excellent energy management skills 1: Strong energy management skills 2: Significant deficits 3: Poor energy management skills 4: A full-fledged energy crisis

at Wachovia, began the program, he was significantly overweight, ate poorly, lacked a regular exercise routine, worked long hours, and typically slept no more than five or six hours a night. That is not an unusual profile among the leaders and managers we see. Over the course of the program, Faro began regular cardiovascular and strength training. He started going to bed at a designated time and sleeping longer. He changed his eating habits from

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two big meals a day (“Where I usually gorged myself,” he says) to smaller meals and light snacks every three hours. The aim was to help him stabilize his glucose levels over the course of the day, avoiding peaks and valleys. He lost 50 pounds in the process, and his energy levels soared. “I used to schedule tough projects for the morning, when I knew that I would be more focused,” Faro says. “I don’t have to do that anymore because I find that I’m just as focused now at 5 pm as I am at 8 am.” Another key ritual Faro adopted was to take brief but regular breaks at specific intervals throughout the workday—always leaving his desk. The value of such breaks is grounded in our physiology. “Ultradian rhythms” refer to 90- to 120-minute cycles during which our bodies slowly move from a high-energy state into a physiological trough. Toward the end of each cycle, the body begins to crave a period of recovery. The signals include physical restlessness, yawning, hunger, and difficulty concentrating, but many of us ignore them and keep working. The consequence is that our energy reservoir—our remaining capacity—burns down as the day wears on. Intermittent breaks for renewal, we have found, result in higher and more sustainable performance. The length of renewal is less important than the quality. It is possible to get a great deal of recovery in a short time—as little as several minutes—if it involves a ritual that allows you to disengage from work and truly change channels. That could range from getting up to talk to a colleague about something other than work, to listening to music on an iPod, to walking up and down stairs in an office building. While breaks are countercultural in most organizations

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GROWN-UPS NEED RECESS, TOO Taking time out of your workday to restore and rejuvenate yourself seems like a guilty pleasure. After all, shouldn’t you be doing something to reduce costs or increase revenue? But our research for Wharton’s Work/ Life Integration Project shows that small breaks actually improve performance because you bring stronger, more focused effort to your work after fruitful rest—just as kids do after recess time in school. What might this look like in practice? Here are a few examples: • Turn off your mobile devices for 30 minutes each day, whenever works best. Just shutting off the stream of texts, instant messages, and calls counts as a break. • Work out with a friend or coworker one morning a week. • Set aside 15 minutes a day during your commute or coffee break to read something fun, do a crossword puzzle, or chat with a friend. • Start a monthly book or puzzle swap with your colleagues. • Find five minutes—and an empty conference room—to do jumping jacks or some light stretching.

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How do you take time out in ways you can sustain? Here are some tips: 1. Try small steps. You’re much more likely to keep it up if “recess” doesn’t require a big restructuring of your life. 2. List the benefits—direct or indirect—to others.  Maybe you feel less distracted at work, for example, or approach teamwork with more patience. If you think about what your coworkers are getting out of your improved outlook, you’ll feel less guilty about doing something that at first might seem selfish. 3. Enroll someone you trust to serve as your coach. It can be anyone, as long as he or she provides both support and accountability pressure. 4. Get feedback after a week or two. Ask people at work if, indeed, you’re better serving their needs and interests as a result of taking your recess and feeling refreshed. Adjust as you learn what’s working—and what’s not—from others’ perspective. Adapted from content posted on hbr.org by Stewart D. Friedman on February 25, 2009

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and counterintuitive for many high achievers, their value is multifaceted. Matthew Lang is a managing director for Sony in South Africa. He adopted some of the same rituals that Faro did, including a 20-minute walk in the afternoons. Lang’s walk not only gives him a mental and emotional breather and some exercise but also has become the time when he gets his best creative ideas. That’s because when he walks, he is not actively thinking, which allows the dominant left hemisphere of his brain to give way to the right hemisphere with its greater capacity to see the big picture and make imaginative leaps.

The Emotions: Quality of Energy When people are able to take more control of their emotions, they can improve the quality of their energy, regardless of the external pressures they’re facing. To do this, they first must become more aware of how they feel at various points during the workday and of the impact these emotions have on their effectiveness. Most people realize that they tend to perform best when they’re feeling positive energy. What they find surprising is that they’re not able to perform well or to lead effectively when they’re feeling any other way. Unfortunately, without intermittent recovery, we’re not physiologically capable of sustaining highly positive emotions for long periods. Confronted with relentless demands and unexpected challenges, people tend to slip into negative emotions—the fight-or-flight mode—often multiple times in a day. They become irritable and impatient, or anxious and insecure. Such states of mind drain

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people’s energy and cause friction in their relationships. Fight-or-flight emotions also make it impossible to think clearly, logically, and reflectively. When executives learn to recognize what kinds of events trigger their negative emotions, they gain greater capacity to take control of their reactions. One simple but powerful ritual for defusing negative emotions is what we call “buying time.” Deep abdominal breathing is one way to do that. Exhaling slowly for five or six seconds induces relaxation and recovery, and turns off the fight-or-flight response. When we began working with Fujio Nishida, president of Sony Europe, he had a habit of lighting up a cigarette each time something especially stressful occurred—at least two or three times a day. Otherwise, he didn’t smoke. We taught him the breathing exercise as an alternative, and it worked immediately: Nishida found he no longer had the desire for a cigarette. It wasn’t the smoking that had given him relief from the stress, we concluded, but the relaxation prompted by the deep inhalation and exhalation. A powerful ritual that fuels positive emotions is expressing appreciation to others, a practice that seems to be as beneficial to the giver as to the receiver. It can take the form of a handwritten note, an e-mail, a call, or a conversation—and the more detailed and specific, the higher the impact. As with all rituals, setting aside a particular time to do it vastly increases the chances of success. Ben Jenkins, vice chairman and president of the General Bank at Wachovia in Charlotte, North Carolina, built his appreciation ritual into time set aside for mentoring. He began scheduling lunches or dinners regularly with peo-

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ple who worked for him. Previously, the only sit-downs he’d had with his direct reports were to hear monthly reports on their numbers or to give them yearly performance reviews. Now, over meals, he makes it a priority to recognize their accomplishments and also to talk with them about their lives and their aspirations rather than their immediate work responsibilities. Finally, people can cultivate positive emotions by learning to change the stories they tell themselves about the events in their lives. Often, people in conflict cast themselves in the role of victim, blaming others or external circumstances for their problems. Becoming aware of the difference between the facts in a given situation and the way we interpret those facts can be powerful in itself. It’s been a revelation for many of the people we work with to discover they have a choice about how to view a given event and to recognize how powerfully the story they tell influences the emotions they feel. We teach them to tell the most hopeful and personally empowering story possible in any given situation, without denying or minimizing the facts. The most effective way people can change a story is to view it through any of three new lenses, which are all alternatives to seeing the world from the victim perspective. With the reverse lens, for example, people ask themselves, “What would the other person in this conflict say and in what ways might that be true?” With the long lens they ask, “How will I most likely view this situation in six months?” With the wide lens they ask themselves, “Regardless of the outcome of this issue, how can I grow and learn from it?” Each of these lenses can help people intentionally cultivate more positive emotions. 70

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Nicolas Babin, director of corporate communications for Sony Europe, was the point person for calls from reporters when Sony went through several recalls of its batteries in 2006. Over time he found his work increasingly exhausting and dispiriting. After practicing the lens exercises, he began finding ways to tell himself a more positive and empowering story about his role. “I realized,” he explains, “that this was an opportunity for me to build stronger relationships with journalists by being accessible to them and to increase Sony’s credibility by being straightforward and honest.”

The Mind: Focus of Energy Many executives view multitasking as a necessity in the face of all the demands they juggle, but it actually undermines productivity. Distractions are costly: A temporary shift in attention from one task to another—stopping to answer an e-mail or take a phone call, for instance—increases the amount of time necessary to finish the primary task by as much as 25%, a phenomenon known as “switching time.” It’s far more efficient to fully focus for 90 to 120 minutes, take a true break, and then fully focus on the next activity. We refer to these work periods as “ultradian sprints.” Once people see how much they struggle to concentrate, they can create rituals to reduce the relentless interruptions that technology has introduced in their lives. We start out with an exercise that forces them to face the impact of daily distractions. They attempt to complete a complex task and are regularly interrupted—an experience that, people report, ends up feeling much like everyday life. 71

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Dan Cluna, a vice president at Wachovia, designed two rituals to better focus his attention. The first one is to leave his desk and go into a conference room, away from phones and e-mail, whenever he has a task that requires concentration. He now finishes reports in a third of the time they used to require. Cluna built his second ritual around meetings at branches with the financial specialists who report to him. Previously, he would answer his phone whenever it rang during these meetings. As a consequence, the meetings he scheduled for an hour often stretched to two, and he rarely gave anyone his full attention. Now Cluna lets his phone go to voice mail so that he can focus completely on the person in front of him. He now answers the accumulated voice-mail messages when he has downtime between meetings. E&Y’s hard-charging Wanner used to answer e-mail constantly throughout the day—whenever he heard a “ping.” Then he created a ritual of checking his e-mail just twice a day—at 10:15 am and 2:30 pm. Whereas previously he couldn’t keep up with all his messages, he discovered he could clear his in-box each time he opened it—the reward of fully focusing his attention on e-mail for 45 minutes at a time. Wanner has also reset the expectations of all the people he regularly communicates with by e-mail. “I’ve told them if it’s an emergency and they need an instant response, they can call me and I’ll always pick up,” he says. Nine months later he has yet to receive such a call. Michael Henke, a senior manager at E&Y, sat his team down at the start of the busy season last winter and told them that at certain points during the day he was going

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to turn off his Sametime (an in-house instant-message system). The result, he said, was that he would be less available to them for questions. Like Wanner, he told his team to call him if any emergency arose, but they rarely did. He also encouraged the group to take regular breaks throughout the day and to eat more regularly. They finished the busy season under budget and more profitable than other teams that hadn’t followed the energy renewal program. “We got the same amount of work done in less time,” says Henke. “It made for a win-win.” Another way to mobilize mental energy is to focus systematically on activities that have the most long-term leverage. Unless people intentionally schedule time for more challenging work, they tend not to get to it at all or rush through it at the last minute. Perhaps the most effective focus ritual the executives we work with have adopted is to identify each night the most important challenge for the next day and make it their very first priority when they arrive in the morning. Jean Luc Duquesne, a vice president for Sony Europe in Paris, used to answer his e-mail as soon as he got to the office, just as many people do. He now tries to concentrate the first hour of every day on the most important topic. He finds that he often emerges at 10 am feeling as if he’s already had a productive day.

The Human Spirit: Energy of Meaning and Purpose People tap into the energy of the human spirit when their everyday work and activities are consistent with what they value most and with what gives them a sense

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of meaning and purpose. If the work they’re doing really matters to them, they typically feel more positive energy, focus better, and demonstrate greater perseverance. Regrettably, the high demands and fast pace of corporate life don’t leave much time to pay attention to these issues, and many people don’t even recognize meaning and purpose as potential sources of energy. Indeed, if we tried to begin our program by focusing on the human spirit, it would likely have minimal impact. Only when participants have experienced the value of the rituals they establish in the other dimensions do they start to see that being attentive to their own deeper needs dramatically influences their effectiveness and satisfaction at work. For E&Y partner Jonathan Anspacher, simply having the opportunity to ask himself a series of questions about what really mattered to him was both illuminating and energizing. “I think it’s important to be a little introspective and say, ‘What do you want to be remembered for?’” he told us. “You don’t want to be remembered as the crazy partner who worked these long hours and had his people be miserable. When my kids call me and ask, ‘Can you come to my band concert?’ I want to say, ‘Yes, I’ll be there and I’ll be in the front row.’ I don’t want to be the father that comes in and sits in the back and is on his BlackBerry and has to step out to take a phone call.” To access the energy of the human spirit, people need to clarify priorities and establish accompanying rituals in three categories: doing what they do best and enjoy most at work; consciously allocating time and energy to the areas of their lives—work, family, health, service to

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others—they deem most important; and living their core values in their daily behaviors. When you’re attempting to discover what you do best and what you enjoy most, it’s important to realize that these two things aren’t necessarily mutually inclusive. You may get lots of positive feedback about something you’re very good at but not truly enjoy it. Conversely, you can love doing something but have no gift for it, so that achieving success requires much more energy than it makes sense to invest. To help program participants discover their areas of strength, we ask them to recall at least two work experiences in the past several months during which they found themselves in their “sweet spot”—feeling effective, effortlessly absorbed, inspired, and fulfilled. Then we have them deconstruct those experiences to understand precisely what energized them so positively and what specific talents they were drawing on. If leading strategy feels like a sweet spot, for example, is it being in charge that’s most invigorating or participating in a creative endeavor? Or is it using a skill that comes to you easily and so feels good to exercise? Finally, we have people establish a ritual that will encourage them to do more of exactly that kind of activity at work. A senior leader we worked with realized that one of the activities he least liked was reading and summarizing detailed sales reports, whereas one of his favorites was brainstorming new strategies. The leader found a direct report who loved immersing himself in numbers and delegated the sales report task to him—happily settling for

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brief oral summaries from him each day. The leader also began scheduling a free-form 90-minute strategy session every other week with the most creative people in his group. In the second category, devoting time and energy to what’s important to you, there is often a similar divide between what people say is important and what they actually do. Rituals can help close this gap. When Jean Luc Duquesne, the Sony Europe vice president, thought hard about his personal priorities, he realized that spending time with his family was what mattered most to him, but it often got squeezed out of his day. So he instituted a ritual in which he switches off for at least three hours every evening when he gets home, so he can focus on his family. “I’m still not an expert on PlayStation,” he told us, “but according to my youngest son, I’m learning and I’m a good student.” Steve Wanner, who used to talk on the cell phone all the way to his front door on his commute home, has chosen a specific spot 20 minutes from his house where he ends whatever call he’s on and puts away the phone. He spends the rest of his commute relaxing so that when he does arrive home, he’s less preoccupied with work and more available to his wife and children. The third category, practicing your core values in your everyday behavior, is a challenge for many as well. Most people are living at such a furious pace that they rarely stop to ask themselves what they stand for and who they want to be. As a consequence, they let external demands dictate their actions. We don’t suggest that people explicitly define their values, because the results are usually too predictable.

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Instead, we seek to uncover them, in part by asking questions that are inadvertently revealing, such as, “What are the qualities that you find most off-putting when you see them in others?” By describing what they can’t stand, people unintentionally divulge what they stand for. If you are very offended by stinginess, for example, generosity is probably one of your key values. If you are especially put off by rudeness in others, it’s likely that consideration is a high value for you. As in the other categories, establishing rituals can help bridge the gap between the values you aspire to and how you currently behave. If you discover that consideration is a key value, but you are perpetually late for meetings, the ritual might be to end the meetings you run five minutes earlier than usual and intentionally show up five minutes early for the meeting that follows. Addressing these three categories helps people go a long way toward achieving a greater sense of alignment, satisfaction, and well-being in their lives on and off the job. Those feelings are a source of positive energy in their own right and reinforce people’s desire to persist at rituals in other energy dimensions as well.

This new way of working takes hold only to the degree that organizations support their people in adopting new behaviors. We have learned, sometimes painfully, that not all executives and companies are prepared to embrace the notion that personal renewal for employees will lead to better and more sustainable performance. To succeed, renewal efforts need solid support and commitment

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from senior management, beginning with the key decision maker. At Wachovia, Susanne Svizeny, the president of the region in which we conducted our study, was the primary cheerleader for the program. She embraced the principles in her own life and made a series of personal changes, including a visible commitment to building more regular renewal rituals into her work life. Next, she took it upon herself to foster the excitement and commitment of her leadership team. Finally, she regularly reached out by e-mail to all participants in the project to encourage them in their rituals and seek their feedback. It was clear to everyone that she took the work seriously. Her enthusiasm was infectious, and the results spoke for themselves. At Sony Europe, several hundred leaders have embraced the principles of energy management. Over the next year, more than 2,000 of their direct reports will go through the energy renewal program. From Fujio Nishida on down, it has become increasingly culturally acceptable at Sony to take intermittent breaks, work out at midday, answer e-mail only at designated times, and even ask colleagues who seem irritable or impatient what stories they’re telling themselves. Organizational support also entails shifts in policies, practices, and cultural messages. A number of firms we worked with have built “renewal rooms” where people can regularly go to relax and refuel. Others offer subsidized gym memberships. In some cases, leaders themselves gather groups of employees for midday workouts. One company instituted a no-meeting zone between 8 and 9 am to ensure that people had at least one hour ab-

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solutely free of meetings. At several companies, including Sony, senior leaders collectively agreed to stop checking e-mail during meetings as a way to make the meetings more focused and efficient. One factor that can get in the way of success is a crisis mentality. The optimal candidates for energy renewal programs are organizations that are feeling enough pain to be eager for new solutions but not so much that they’re completely overwhelmed. At one organization where we had the active support of the CEO, the company was under intense pressure to grow rapidly, and the senior team couldn’t tear themselves away from their focus on immediate survival—even though taking time out for renewal might have allowed them to be more productive at a more sustainable level. By contrast, the group at Ernst & Young successfully went through the process at the height of tax season. With the permission of their leaders, they practiced defusing negative emotions by breathing or telling themselves different stories, and alternated highly focused periods of work with renewal breaks. Most people in the group reported that this busy season was the least stressful they’d ever experienced. The implicit contract between organizations and their employees today is that each will try to get as much from the other as they can, as quickly as possible, and then move on without looking back. We believe that is mutually self-defeating. Both individuals and the organizations they work for end up depleted rather than enriched. Employees feel increasingly beleaguered and burned out. Organizations are forced to settle for employees who are

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less than fully engaged and to constantly hire and train new people to replace those who choose to leave. We envision a new and explicit contract that benefits all parties: Organizations invest in their people across all dimensions of their lives to help them build and sustain their value. Individuals respond by bringing all their multidimensional energy wholeheartedly to work every day. Both grow in value as a result.

Tony Schwartz is the president and founder of The Energy Project in New York City, and a coauthor of The Power of Full Engagement: Managing Energy, Not Time, Is the Key to High Performance and Personal Renewal (Free Press, 2003). Catherine McCarthy is a senior vice president at The Energy Project.

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Chapter 4

Why Great Performers Sleep More by Tony Schwartz

Why is sleep one of the first things we’re willing to sacrifice as the demands in our lives keep rising? We continue to live by a remarkably durable myth: Sleeping one hour less will give us one more hour of productivity. In reality, even small amounts of sleep deprivation take a significant toll on our health, mood, cognitive capacity, and productivity.

How Much Sleep Do You Need? When researchers put test subjects into environments without clocks or windows and ask them to sleep any Adapted from content posted on hbr.org on March 3, 2011

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time they feel tired, 95% sleep between seven and eight hours out of every 24. Another 2.5% sleep more than eight hours. That means just 2.5% of us require fewer than seven hours of sleep a night to feel fully rested. That’s one out of every 40 people. In my talks, when I ask who has had fewer than seven hours of sleep several nights during the past week, the majority raise their hands. That’s true whether it’s an audience of corporate executives, teachers, cops, or government workers. Great performers are an exception. Typically, they sleep significantly more than the rest of us. In Anders Ericsson’s famous study of violinists, the top performers slept an average of eight and a half hours out of every 24, including a 20- to 30-minute midafternoon nap—some two hours a day more than the average American. The top violinists also reported that except for practice itself, sleep was the most important factor in improving their skills. As I gathered research about sleep, I felt increasingly compelled to give it higher priority in my own life. Today, I go to great lengths to ensure that I get at least eight hours every night, and ideally between eight and a half and nine hours, even when I’m traveling. I still take the overnight red-eye from California to New York, but I’m asleep by takeoff—even if I have to take a sleeping aid. When I get home at 6:00 or 7:00 am, I go right to bed until I’ve had my eight hours. What I’ve learned about those days is that I’d rather work at 100% for five or six hours than at 60% for eight or nine hours.

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WHAT PEOPLE ARE SAYING ON HBR.ORG Try the coffee nap—Lifehacker had a great article about [naps]. I’m a paramedic and I’ve used this trick for ages. Fix a cup of coffee so you can drink it quickly. Set up the spot where you’ll nap and then drink the coffee. Set a timer for 20 minutes and make sure you get up when it goes off. Any longer and you’ll feel worn out. I know this has saved my life on many late-night, longdistance transports. —Posted by John

With sufficient sleep, I feel better, I work with more focus, and I manage my emotions better, which is good for everyone around me. I dislike enduring even a single day when I haven’t had enough sleep because the impact is immediate and unavoidable. On the rare days that I don’t get enough, I try hard to get at least a 20- to 30-minute nap in the afternoon. That’s a big help.

How to Get More Sleep Here are three other tips to improve the quantity and quality of your sleep: • Write down what’s on your mind before you get

into bed. If you leave items such as unfinished to-do’s and unresolved issues in your working memory, they’ll make it harder to fall asleep, and you’ll end up ruminating about them if you wake up during the night.

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• Go to bed earlier—and at a set time. Sounds obvious, right? The problem is there’s no alternative. You’re already waking up at the latest possible time you can. If you don’t ritualize a specific bedtime, you’ll find ways to stay up later, just the way you do now. • Start winding down at least 45 minutes before you

turn out the light. You won’t fall asleep if you’re all wound up from answering e-mail or doing other work. Create a ritual around drinking a cup of herbal tea, listening to music that helps you relax, or reading a dull book.

Tony Schwartz is the president and CEO of The Energy Project and the author of Be Excellent at Anything (Free Press, 2011). Become a fan of The Energy Project on Facebook and connect with Tony on Twitter at @tonyschwartz and @energy_project.

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Section 3

Improving Your Work/Life Balance

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Chapter 5

No, You Can’t Have It All by Eric C. Sinoway

Imagine that a company needs two volunteers for a highprofile, out-of-town project. Who should go? Everyone has pressures and commitments to consider. There’s the young manager eager for his next promotion but worried about leaving his wife at home with their toddler and newborn son; the rising star who’s already juggling long hours at work, a part-time MBA program, and the planning of her wedding; the mid-career executive who just joined a nonprofit board and doesn’t want to miss his first meeting; the single colleague who would relish the assignment but is about to move her father into a nursing home; and an overweight team member with a family

Reprinted from Harvard Business Review, October 2012 (product #R1210J)

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history of diabetes who knows the travel will cause him to blow his new diet and exercise routine. Platitudes about the importance of work–life balance don’t fully capture the complexity of those employees’ situations. The pursuit of a meaningful, multifaceted life involves endless choices about both short-term tactical issues (“Should I volunteer for this project?”) and long-term strategic ones (“How can I position myself to advance in my career?”). Howard Stevenson is an entrepreneur, professor, philanthropist, former chairman of Harvard Business Publishing, husband, and father who has spent four decades studying, teaching, and advising leaders in all types of organizations. He likens the challenge to walking on a balance beam while trying to juggle an egg, a crystal glass, a knife, and any number of other fragile or hazardous objects. As you progress in your career and life, more responsibilities and opportunities are tossed at you. And so at some point, to maintain your balance, you’ll have to drop something. The key is to decide consciously what to relinquish instead of unwittingly letting go of the most important item. It’s hard for high-achieving people to accept that they can’t have it all. Even those who recognize the limits on their time often still expect to be energetic and efficient enough to excel in every role: productive employee, inspiring boss and mentor, supportive colleague, active community member, and committed spouse, friend, parent, and child. It’s a natural response to our upbringings; after all, in school we’re taught that hardworking, intelligent students can get straight A’s. But in the messy real

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world, it is impossible to do everything perfectly at the same time. You cannot pursue all your goals simultaneously or satisfy all your desires at once. And it’s an emotional drain to think you can. Instead, you must focus on long-term fulfillment rather than short-term success and, at various points in your life, think carefully about your priorities. This article presents a framework that I have developed in collaboration with Howard. It’s based on his experience teaching and mentoring students and on the lessons I’ve learned navigating my own career and now running Axcess Worldwide. The framework is designed to help people—particularly ambitious executives— understand their limits and make the tough trade-offs that can lead to more-satisfying careers and lives.

You, the Ongoing Process We all know that it’s difficult for a company to make good strategic or tactical decisions without a mission in mind. The same holds true for individuals. Think of a jigsaw puzzle: It’s much easier to put the pieces together if you look at the front of the box. But life does not come with a picture that shows what success looks like. Most of us start walking and juggling on the balance beam without thinking holistically and explicitly about what aspects of our lives we value most and how we value those things in relation to one another. Those assessments are not easy, but they are central to defining your goals and your desired legacy. It helps to carefully consider all the dimensions of your life. Howard and I have identified seven:

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• Family (parents, children, siblings, in-laws, and so on) • Social and community (friendships and community engagement) • Spiritual (religion, philosophy, or emotional outlook) • Physical (health and well-being) • Material (physical environment and possessions) • Avocational (hobbies and other nonprofessional activities) • Career (both short- and long-term perspectives) For each dimension ask yourself three questions: Who do I want to be in this part of my life? How much do I want to experience this dimension? Given that I have a finite amount of time, energy, and resources, how important is this dimension relative to the others? As you consider the answers, it’s important to recognize two points. First, each dimension presents distinct challenges. It’s crucial to tease them apart so that you are facing not an overwhelming whole but discrete issues that can be addressed individually. Second, your evaluation can and will change. The idea is to develop an aspirational picture of yourself for the present and a legacy vision for the future as a guide for deciding how to spend your personal resources. This is especially important when you feel you’re losing your balance or are about to fumble.

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Two of Howard’s own life experiences offer potent examples of how to use this aspirational vision to shape decisions both large and small. The first is from the time when he was building Baupost—the money management firm he cofounded—as well as teaching at Harvard Business School. At that point, he couldn’t spend as much time as he would have liked with his young children, because he was working long hours and traveling a lot. The situation reflected clear decisions he and his wife had made: He would sacrifice the family dimension of his life for a while in order to create the best long-term outcome for all of them. But Howard employed a tactical fix that honored his vision of himself as a committed husband and father. Whenever he was at home, he was fully responsive. Regardless of what else he was doing—catching up on work, reading a book, cleaning out the garage—if one of his family members asked for help with something or just wanted to talk, he would stop and engage. He knew that the emotional value from the interaction—for him and his family—would be far higher than the value of any other task. He applied clear-headed analysis to an important challenge: how to be a good father, husband, and provider while maximizing the professional dimension of his life. Several years later, when Howard was in his late 40s and thriving at both Baupost and Harvard, he faced a much more complicated set of choices when his marriage ended. He realized he could regain his own and his sons’ equilibrium only by rechanneling personal resources from his career to his family. And so he gave up his leadership role at Baupost—a job he loved, and one

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CAN YOU REALLY ACHIEVE YOUR GOAL? Before trying to pursue a significant goal, especially a professional one, it’s important to assess whether you have the ability to achieve it. Consider two things: 1. Do you have the required core capacities: knowledge, skills, and personal characteristics? 2. Are your capacities as good as or better than those of other people with the same goal? If you answer no to either question, you should consider revising your goal. If you answer yes to both, make sure you’re not succumbing to one of these five common fallacies: The hard-work fallacy: believing that determined effort will compensate for your shortcomings The smarts fallacy: thinking that general intelligence translates into specific skills The magnification fallacy: assuming that your particular talent is somehow more special than your peers’ The passion fallacy: believing you’re good at things just because you really enjoy them or because they are immensely important to you The “wishing will make it so” fallacy: convincing yourself that success (for you, anyway) will be easy

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that might have given him an income in the tens of millions of dollars. “I needed to earn a consistently good grade as a father for an extended period,” he explained. “I couldn’t risk having some aspect of my family responsibilities slip through my fingers. Sure, my ego and my wallet both took big hits. But the value of having more time and energy for my kids far outweighed any incremental monetary value.”

Assessing Value Notice that in describing his experiences, Howard used the word “value.” That’s because he’s an entrepreneur who knows that the only way to truly assess cost is to understand the value of one choice relative to another. For example, an hour spent reading to your daughter has a different value than an hour spent playing basketball with friends; and both have values different from an hour spent studying for a licensing exam or volunteering at a homeless shelter. The key is to differentiate between options that appear to be equally valuable by carefully considering how each of them advances you toward one dimension or another of your legacy vision. The following questions can help you in that process.

Where do your options fall on the needs–wants spectrum? Needs start with food, shelter, and health; wants include diamond necklaces, round-the-world cruises, and mansions. Needs have more intrinsic value than wants. But most things fall somewhere in the middle. So the goal is to understand, in relative terms, where your options fall

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on the spectrum, based on your individual circumstances at a given moment and on your legacy vision. Some wants are so strong—because of habit or even peer pressure— that it’s difficult to separate them from needs. Consider two examples. (In these and the cases of Willie and Andrew, below, names and some personal details have been changed out of respect for the subjects’ privacy.) The first concerns a college classmate, Carin, who gets very sad if she can’t take time each day to play the piano; the hobby is so much a part of who she wants to be that it has become, in practical terms, a need, so she sacrifices in other dimensions of her life to make time for it. The second involves two former colleagues, Irwin and Bill, who work at the same firm. Both were considering buying an expensive car and a handmade Swiss watch— investments that would consume significant amounts of cash and curtail their 401(k) contributions. For Irwin, a 29-year-old trying to impress his peers, these purchases were largely wants. But for Bill, a 46-year-old who had been promoted to a senior role in the luxury division of the company and was routinely entertaining wealthy clients, the car and the watch were closer to needs: He had to present himself in a certain way to be successful.

What are the investment and opportunity costs? Almost every decision—whether agreeing to a strategic business alliance or committing to a leadership role in a nonprofit organization—involves two kinds of costs. There’s the investment cost: the time, energy, and other resources you expend. And there’s the opportunity cost:

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the options you forgo by investing those resources. The challenge with investment costs is to be explicit about them up front and to understand if and how incurring them will lead you to your desired, well-defined outcome. For example, rather than blindly diving into a full-scale job search to explore new career options, which would represent a very large investment of time and energy, you can commit to spending just five hours a week for two months researching a few industries you find promising, networking with contacts who know them, and doing informational interviews with executives working in them. The goal might be to create a short list of 10 companies where you’d like to work and to pinpoint three to five roles you’d like to play at them. At the same time, be sure to weigh your opportunity costs: what you won’t be able to do because you’re spending five hours a week on the job search. Perhaps you’ll have to stop playing in the after-work softball league or decline to participate in a new cross-division initiative at your current workplace.

Are the potential benefits worth the costs? Expected benefits must be evaluated just as carefully as costs, and in relation to them. Does the benefit you’ll receive warrant the investment you’ll have to make? The songwriter Lucy Kaplansky captures this idea succinctly: “How much did it cost you? How much did you pay? And are you sorry at the end of the day?” Willie, a friend who works for a large conglomerate, was recently told by his boss that he would be well served to earn his CPA, an achievement that requires three years of coursework. “Well served” implies a benefit, but how much of one?

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Would he get a promotion or a raise after earning his CPA? If so, to what level? Would he be eligible to move to other divisions in the company? If so, which ones? Willie has to answer those questions in order to decide whether the costs of this particular effort would produce acceptable returns.

Can you make a trade? Life is full of trade-offs, but sometimes units of one element of your life can’t be exchanged for units of a different element. Think of Steve Jobs, who assuredly would have paid great sums to cure his cancer. But his money could not buy him health. There was no trade to be had. Many of us face similar, albeit less consequential, challenges throughout our careers and lives as we try to exchange something we have for something else that we want. The frustration arises when the two items in question can’t be traded. Consider the case of Andrew, a managing director at a respected financial services firm. He’d spent nearly 20 years in investment banking, but thanks to the unsteady economy, the demonization of his profession, and increased regulation, he was no longer enjoying his work. He’d long dreamed of walking away from financial services and opening a small beachside restaurant, and so, at age 52, he resigned. The firm offered him a staggering sum to stay, provided he commit to a five-year contract. After a few days of consideration, Andrew agreed, but now, two years later, he’s miserable and still thinking about his restaurant. He ended up exchanging wealth for freedom, and although the money seemed very big and

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the freedom to be gained from his new endeavor relatively small, in the end it was a bad trade.

Can you pursue your most important goals sequentially? Howard is fond of citing a piece of advice his mother often gave him: “Remember that you may be able to have everything you want in life—just not all at once.” Consciously staggering your goals may enable you to be equally successful in many dimensions over time. Mike Leven, the 74-year-old president and COO of Las Vegas Sands, has said that he decided to focus on his work dimension later than his peers, because he wanted to be a more hands-on parent when his three children were young. So he reached professional goals at 45 that many friends reached at 40; achieved wealth later than others; and secured his first really big job, as the president of Days Inn, when his kids were a bit older. He didn’t slack off in the early part of his career, but he did give himself permission to pursue his top personal and professional goals—of being a great father and a successful corporate leader—at different points in his life, because he believed he couldn’t achieve them simultaneously. In today’s complex, frenetic world, many of us are— like the employees described at the start of this article— struggling to chart a path toward success in our careers and a sense of fulfillment in all aspects of our lives. Any decision can be easier if you think carefully about your goals; the dimensions of yourself that are most important to you; your needs and wants; the specific costs and benefits associated with your choices; the commensurability

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of those choices; and whether certain goals should be sequenced instead of pursued simultaneously to give you a better chance of success. Instead of striving for work–life balance, or even worrying about juggling on the balance beam, use this framework to pursue your life’s work— holistically seeking both success and satisfaction. In the real world, isn’t that what “having it all” really comes down to?

Eric C. Sinoway is the president and a cofounder of Axcess Worldwide, which creates partnerships between companies in the luxury, travel, hospitality, and mass consumer brand industries. He is the author, with Merrill Meadow, of Howard’s Gift: Uncommon Wisdom to Inspire Your Life’s Work (St. Martin’s Press, 2012).

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Chapter 6

Making Time Off Predictable— and Required by Leslie A. Perlow and Jessica L. Porter

IDEA IN BRIEF • People in professional services believe a 24/7 work ethic is essential for getting ahead, and so they work 60-plus hours a week and are slaves to their BlackBerrys. • The authors’ research in several offices of the Boston Consulting Group, however, suggests that consultants and other professionals can meet the Reprinted from Harvard Business Review, October 2009 (product #R0910M)

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highest standards of service and still have planned, uninterrupted time off—whether in good economic times or bad. • Here’s how: Impose a strict mechanism for taking time off, encourage lots of talk about what’s working and what isn’t, promote experimentation with different ways of working, and ensure top-level support.

People in professional services (consultants, investment bankers, accountants, lawyers, IT, and the like) simply expect to make work their top priority. They believe an “always on” ethic is essential if they and their firms are to succeed in the global marketplace. Just look at the numbers: According to a survey we conducted last year, 94% of 1,000 such professionals said they put in 50 or more hours a week, with nearly half that group turning in more than 65 hours a week. That doesn’t include the 20 to 25 hours a week most of them spend monitoring their BlackBerrys while outside the office. These individuals further say they almost always respond within an hour of receiving a message from a colleague or a client. Yet our research over the past four years in several North American offices of the Boston Consulting Group (BCG) suggests that it is perfectly possible for consultants and other professionals to meet the highest standards of service and still have planned, uninterrupted time off. Indeed, we found that when the assumption that everyone needs to be always available was collectively chal-

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lenged, not only could individuals take time off, but their work actually benefited. Our experiments with time off resulted in more open dialogue among team members, which is valuable in itself. But the improved communication also sparked new processes that enhanced the teams’ ability to work most efficiently and effectively. Predictable time off is the name we gave to the designated periods of time that consultants were required to take off. This was in addition to time the consultants took off with the natural ebbs and flows of their work. These predictable periods were established at the start of a project and required individuals to be off completely—no checking of e-mail or voicemail. The concept was so foreign that we had to practically force some professionals to take their time off, especially when it coincided with periods of peak work intensity. Eventually, however, the consultants came to enjoy and anticipate having predictable time off, particularly as the benefits for their work became evident. After we had conducted more than 10 multi-month time-off experiments at BCG, the effects of the recession became sharply apparent. The time pressures on service professionals proved even greater in this period of collapse—a fact borne out in a survey we recently conducted with an additional 250 individuals across professional services firms: 66% of respondents reported increased pressure in their work life, and 36% reported a significant increase. When faced with sobering bottom-line effects of the recession, leaders at BCG paused to discuss and reconsider the benefits of implementing predictable time

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off—and decided to go ahead with this counterintuitive approach to increasing their efficiency and effectiveness. The payoff, they feel, is about far more than individual gains; it’s about preserving a strong, engaged pool of talent and, ultimately, cultivating productive work processes for the long term. To understand how effective predictable time off can be (in good times and bad), let’s look at the experiments we conducted at BCG.

Rethinking the Unthinkable The demands of consulting projects vary a great deal depending on multiple dimensions, including the scope of work promised, the type of relationship with the client, and the travel required. So in our first experiment, we made sure that our test was rigorous. We deliberately chose a team of four consultants who were working with a new client that BCG very much wanted to cultivate. The project involved a lot of daily interaction with the client, leading the consultants to believe that their presence at the client site four days a week was imperative. We imposed a requirement that everyone on the team take one full day off a week. Since that meant everyone was now working 80%, we added another consultant to the team to ensure that the client would still have the equivalent of four full-time people on the project. At first, the team resisted the experiment. The partner in charge, who had been very supportive of the basic idea, was suddenly nervous about having to tell her client that each member of her team would be off one day a week. The project manager was also concerned: He was responsible

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for the team’s final output, and he feared that the experiment might affect the quality of the team’s work. However, both reluctantly agreed to give the experiment a try. Their reasoning was that since their firm had been hired to help the client improve its work processes (of the sales force, in this case), they could position the experiment as their own attempt to do what they were asking of their client— namely, engage in process improvement. They assured the client that they would call off the experiment if there were any cause for concern. The client was receptive. This first experiment tested predictable time off at an extreme level because consultants were required to take off a full day, in the middle of the work week. As a partner put it, “Forcing a full day off was like tying your right hand behind your back to teach you to use your left hand. It really helped the team overcome the perception that they had to be on call 24/7.” Once we were able to demonstrate that taking full days off (working 80%) was possible, the next challenge was whether people working full time could have predictable time off and still achieve similar benefits for themselves and the organization. In our second experiment, we required each consultant to take one scheduled night off a week, during which he or she could not work after 6 pm—not even check or respond to e-mails or other messages. (This didn’t mean that consultants were expected to work all other nights; rather, it meant they were to have one scheduled uninterrupted night off every week, no matter what was going on at work.) We again chose a challenging project: This team was working on a postmerger restructuring for a demanding client. The project required on-site

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interaction with members of the client organization in multiple locations, necessitating a great deal of overnight travel. But this time, we made no change in staffing. Again, we met with resistance from the consultants, even though the time off in this experiment was outside the client’s normal working hours. The general practice among consultants on the road is that they work very hard while away from home, but then they hope to have a reasonable day on Friday when they are back in the home office, and they want the weekends off. As a project manager summed up the skepticism surrounding the nightoff experiment, “What good is a night off going to do? Won’t it just force me to work more on weekends?” In both experiments, participants felt conflicted between their commitment to the experiment and what they felt they owed both the client and their teammates. They were also concerned that involvement in the experiments wouldn’t reflect well in their performance evaluations. As a consultant confided during the first week, “If you are making promotion decisions, and you look at someone who has been staffed on a project where she is really cranking it out and working long hours, and you compare that to someone who is getting a day off, it is hard to believe you are not going to promote the person who appears to be working harder.” As a result, consultants involved in the experiment worried that they were putting their careers in jeopardy. Moreover, they either worked and felt guilty, because they were in violation of the experiment, or they didn’t work and felt guilty, because of the stress they thought they were putting on their teammates.

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As time passed, their anxiety gradually subsided. Several weeks into the experiment, one consultant effused that his night off was phenomenal. “My project manager pushed me out of the office to make sure I took the time off,” he said, “even though it was a busy week. I came back really refreshed.” Before long, the consultants didn’t need to be pushed into taking a little time for themselves. In the five months following our initial experiments (which occurred in sequence over the course of a year), 10 more teams began experimenting with taking a night off. At the start of the experiments, participants were asked to rate the following statement: “I feel respected for setting boundaries.” The scale ranged from 1 (strongly disagree) to 7 (strongly agree). In the first month, those on the experiment teams gave the statement a 3.7 ranking. In month five, they rated it at 5.2—demonstrating their slowly rising level of faith in the concept. At the same time, 100% of people working on an experiment team and 76% of people in the rest of the office wanted their next case to be on a team experimenting with predictable time off. Compared with those not participating in the experiments, people on time-off teams reported higher job satisfaction, greater likelihood that they could imagine a long-term career at the firm, and higher satisfaction with work/life balance. (See figure 6-1.) Beyond the intended work/life benefits, the participants reported more open communication, increased learning and development, and a better product delivered to the client. “It’s a way to open up a conversation that everyone on your team wants to have, which is ‘How

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FIGURE 6-1

Early signs of progress After only five months, consultants on teams experimenting with predictable time off perceived their work situations more favorably— on every dimension—than peers on nonexperiment teams. We asked consultants once a month to rate statements about their work situation on a scale of 1 (strongly disagree) to 7 (strongly agree). We saw statistically significant improvements across the board in the scores of teams that were scheduling regular days or nights off, demonstrating their growing faith in the time-off concept.

Job satisfaction

Experiment teams 5.3 4.8

Typical teams

Long-term career

Experiment teams 4.8

4.1

Typical teams

Work/life balance

Experiment teams 4.3

5.0

Typical teams

Learning/ development

Experiment teams 5.3 5.0

Typical teams

Open communication

Experiment teams 4.8

5.4

Typical teams

Value delivery

Experiment teams 5.3

5.8

Typical teams

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can we work smarter? How can we work together more often, and how can we make sure we deliver without sacrificing work/life balance?’” one project manager told us. “The experiment not only allows you to talk more, but it forces you to do so weekly. In the end, the process creates efficiencies and promotes work/life balance— without sacrificing anything on the client side.” Let’s look now at what enabled our experiments to deliver these benefits.

Lesson 1: Impose a strict time-off mechanism To get hard-driving consultants to agree to take time off during an assignment—not just when there happened to be a break in the work but at predictable times—we had to establish a mechanism that made it clear to everyone how time off must be taken: either a full day or a full night each week for everyone on the team, which was scheduled at the start of each project. All the team members knew for any given week which day or night they were to take off. Some teams opted to have each person take the same day or night each week (for instance, one team member had Monday, another had Tuesday, and so on). Other teams tried alternating the particular day or night off for each team member. On all teams, people spread out scheduled times off across the week to ensure coverage at work. Once the schedule was set, individuals were encouraged to make changes to accommodate personal events if they could do so without causing too much trouble for the team.

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Admittedly, this arrangement didn’t satisfy everyone. Some people in the day-off experiment, for example, would have preferred to come in late every morning instead. Most people would have preferred additional time off at home to a free night on the road. Ultimately, the goal is for people to be able to take the type of time off that best suits their personal needs. To

UNPLUGGING FOR VACATION We live in a world where we’re expected to be available all the time, for almost any reason. Worse, we expect it from ourselves. While nonstop work might feel overwhelming, it’s also reassuring. It makes us feel busy. Valuable. Indispensable. So, leashed to our technology, we convince ourselves that we can’t take a vacation that allows us to really get away. We have two reasonable options for dealing with this problem: 1. Completely unplug. I’ve done this a few times, such as the week I spent camping and kayaking in the Grand Canyon. I was literally unreachable. When I returned to civilization—and a phone—I had more than 50 messages. But here’s what’s interesting: The first half of the messages raised problems that needed attention, and the second half were the same people telling me not to worry about their earlier messages because they had resolved the problems on their own.

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get to that point, however, the feasibility of taking time off and the potential value of time off must first be recognized. Initially, everyone must take off the same type of time. Otherwise inequity (or the perception of it) can creep in. For example, is an hour in the morning the same as an hour at night? Is a Friday night off the same as a weeknight off? It quickly becomes quite complicated to assess

My unplugging created an opportunity for my team to grow, develop, and exercise their own judgment—and it gave me a wonderful, muchneeded break. 2. Schedule plug-ins. If it’s impossible or inappropriate to unplug completely, specify a time frame each evening when you’ll be reachable—a few minutes at the end of each day (or, if you can manage, every few days) to answer e-mails and make phone calls. That sets clear expectations for the people trying to reach you, for the people you’re vacationing with, and for yourself. Of course, before you do this, you need to admit to yourself that you will work during the vacation. But by setting aside time to work, you’re also setting aside the rest of the time not to work. And that just might save your vacation. Adapted from content posted on hbr.org by Peter Bregman on March 18, 2010

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the relative value of time off when it is freely selected. If everyone takes the same type of time off, people’s fears that they aren’t pulling their weight will be reduced. Team members will also be more attuned to protecting their own and their teammates’ time off. And when the time off takes the same form for everyone, it’s easier to track. In the end, the people in our experiments generally managed to take their time off. In the first experiment, 90% of days off were taken in the designated week, and 68% were taken on the scheduled day (or another day when the change was solely for personal reasons). In the second experiment, 98% of nights were taken off in the designated week, and 86% were taken on the night scheduled (unless the change was solely for personal reasons). As a result, people came to recognize that the 24/7 mentality could be broken and began to appreciate the value of doing so.

Lesson 2: Build dialogue into the process In each of our experiments, we used explicit tactics to generate conversation around the time-off goals in particular, and around work processes more generally. The team began with a kickoff meeting in which the partners on the team emphasized the importance both of achieving the time-off goals and of team members’ being open to and engaged in experimentation around work processes. After that, the teams had a weekly check-in to discuss how the experiment was going. The check-ins consisted of three parts. One part involved a review of the calendar. Team members would

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discuss whether they had taken their time off as planned during the past week, and whether they expected to be able to take it in the week ahead. When people hadn’t taken their time off or thought they wouldn’t be able to, team members questioned one another about what was going wrong and how to improve the situation. The second part involved a pulse check, where each person was asked to rate and talk about four questions: (1) How are you feeling? (2) How much value are you delivering to the client? (3) How satisfied are you with your learning? and (4) Is the current operating model sustainable for you throughout the project? The third part of the check-ins was a discussion of “tummy rumbles”—items people submitted anonymously in advance, comprising anything that was making them uncomfortable. The weekly check-ins resulted in a far greater emphasis on how work was being done than on what work was being done. As a project manager noted, “In a typical team meeting, you’d probably spend 95% of the time discussing the content, and maybe only 5% of the time actually looking at the process. Because of the experiment, we probably spent more like 30% of the time talking about the process, and 70% of the time on the content.” People were initially skeptical about spending so much time looking at work processes. But in the end, most teams found it helpful. The check-ins not only allowed teams to engage in explicit conversations about achieving their time-off goals, but they also sparked valuable discussions—involving the whole team—about priorities, expectations, and problems people were facing. By

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contrast, in typical, nonexperiment teams, consultants generally start talking about problems only when they are already overstressed and less able to think rationally or do much about them. Our experiments emphasized open dialogue around a particular collective but personal goal: enabling individuals’ time off. Because conversation was started on a focused, concrete topic, individuals could raise a small issue, see how it was received, and then choose whether to say more depending on the response. In the process, they gradually built trust and respect, enabling them to feel comfortable raising an increasingly wide range of topics. Team members learned about one another in more holistic ways, and they came to appreciate one another as human beings as well as business colleagues. And, in the end, they became all the more willing to speak up about their issues, both work-related and personal. The discussions revealed not only small issues but large potential problems. “We were doing a major transformation piece, and the reaction from the client was critical for making it work,” recalled one partner. “During an experiment check-in, consultants started raising concerns about the client’s level of buy-in to our work. We came to realize that this was not an issue with just one member of the client organization; it was a pattern that each of the consultants was seeing in their contacts with the client.” The team changed its approach accordingly, redoubling its efforts to get the client’s buy-in.

Lesson 3: Encourage experimentation Beyond creating a safe space for open dialogue, we found it imperative to encourage people to experiment with 112

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new work processes. Ways of working that would have previously gone unquestioned were suddenly fair game for reconsideration. One core process that was called into question had to do with how team members’ work was allocated. In management consulting, projects are typically done by teams, but the team leader usually divides the work among the team members, who have personal responsibility for their part of the project. To achieve the time-off goals—especially for a full day off when consultants had daily interactions with the client—this fundamental assumption about how work was done had to be revisited. New ways of “teaming,” where individuals more closely shared responsibility for work and, therefore, could more easily cover for each other, were needed. Various teams experimented with different ways of teaming. For instance, those in the day-off-a-week experiment tried assigning primary responsibility for each piece of work to one person but also allocating secondary responsibility to another one or two people. To ensure effective handoffs and hand-backs, this team instituted a team blog. Each evening, every member would post an account of the progress made on his or her own work—for example, progress made while covering for someone else, or even hallway conversations with clients that might have an impact on the work in general. This nightly report helped to break down the silos that usually kept people focused on their own work, and it elevated the discourse of the team as a whole. Teaming let consultants share expected spikes in the workload and pitch in when demands arose unexpectedly. It also increased the exchange of knowledge and 113

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support among team members. “Think of all the times on cases you would love to grab another consultant for four hours, but you can’t because they’re so busy,” one consultant explained. “Now people have more time for it because cooperation is built in.” Consultants learned a great deal from one another as a result. The work became better integrated because people were interacting better and more often. Inevitably, this led to improvements in the quality of work delivered— benefits that were certainly noticed by clients. As one noted, “This new way of working [gave BCG] a big advantage . . . [the consultants] were much more informed about what was going on with other modules, and people were more informed about the whole project.”

Lesson 4: Insist on leadership support Individuals won’t willingly engage in these experiments unless they are able to suspend their disbelief. For that to happen, people need to know that there is value in trying; that they will be respected for participating; and that they will bear some responsibility for the success or failure of the experiment. One of the reasons we had such a high level of engagement from the consultants in our experiments was strong support from the senior partners. They set the tone, making it OK to talk about issues as they related to work and personal life. Such legitimization, of course, required more than a few statements from the top brass. BCG’s partners and project managers needed to model the desired openness.

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For instance, the partners were encouraged to be more transparent when they were taking personal time. “It was helpful to know that the reason the partner missed a meeting was that he was taking his daughter on a college tour,” one consultant noted. “That helped me see that these issues are important to him.” Another consultant added that at a kickoff meeting, the senior partner said that work was very important to him but not the most important thing in his life, and he didn’t want to have to be embarrassed to say so. The consultant reported, “I had never heard a partner talk like that before. My work is really important to me, too, but it is not the most important thing in my life. [His openness] made me comfortable to admit that.” Partners were required to attend the kickoff and weekly check-in meetings. It’s often hard for a partner to prioritize spending time with the team when other important things, such as client meetings, are being postponed. But both the partners and the teams appreciated the increased involvement. As one partner put it, “A lot of these things, communicating with our teams, actually attending the team meetings—it’s not that complicated, but it’s easy to let them slide if you’re not focused on them.” Another partner added that the time-off experiments and the new processes brought him “closer to the content of the case than I’ve been in years.” To help the leadership team make these adjustments, we acted as facilitators during the first two experiments. We helped the partners understand the signals they were sending and encouraged them to support the experiments in both word and deed. We attended the weekly

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check-ins and followed up with each team member, to ensure that people were getting the support they needed to take their days or nights off and that team members were communicating openly with one another when issues arose. During the next 10 time-off experiments, internal consultants at BCG were taken out of client service work to serve as full-time facilitators. They performed the same role we had in earlier experiments, attending weekly meetings, conducting regular check-ins, and prompting team members and BCG leaders to challenge assumptions and try new ways of working. The Boston office of BCG, where the research originated, is now exploring changes in its formal reward system. It is piloting review forms for junior members of the firm that measure how well they communicate personal commitments and how well they plan and deliver against project needs while maintaining those personal commitments. It has also started to add questions to their upward-feedback forms to measure how well each senior member of the office models having a sustainable career and how well he or she respects the personal commitments of his or her teams. Such explicit support for the predictable-time-off initiative provides a shield as the teams navigate between the firm’s old norms and its new goals. A consultant who perceives unnecessary travel can raise the issue with his project manager by saying, for instance, “In the spirit of the time-off experiments, do we all really need to be on site at the client every day next week?” Once this ques-

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tion might have been seen as a lack of commitment at BCG; now it is safe, even encouraged, to question decisions about how work is done.

It’s important to recognize that our experiments are not about reducing professionals’ commitments to their work and clients. We understand that the success of professional services firms depends on hardworking people who value the intensity of the work and are committed to their clients. They relish being in the thick of things, with all the learning and adrenaline buzz that engenders. What professionals don’t like is the bad intensity— having no control over their own work and lives, being afraid to ask questions that could help them better focus and prioritize, and generally operating in ways that are inefficient. Still, professionals accept the bad intensity without hesitation, believing it comes with the territory. This only perpetuates a vicious cycle: Responsiveness breeds the need for more responsiveness. When people are “always on,” responsiveness becomes ingrained in the way they work, expected by clients and partners, and even institutionalized in performance metrics. There is no impetus to explore whether the work actually requires 24/7 responsiveness; to the contrary, people just work harder and longer, without considering how they could work better. Yet, what we discovered is that the cycle of 24/7 responsiveness can be broken if people collectively challenge the mind-set. Furthermore, new ways of working can be found that benefit not just individuals but the

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organization, which gains in quality and efficiency—and, in the long run, experiences higher retention of more of its best people.

Leslie A. Perlow is the Konosuke Matsushita Professor of Leadership at Harvard Business School in Boston.

Jessica L. Porter is a research associate at Harvard Business School.

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Chapter 7

Winning Support for Flexible Work by Amy Gallo

Many professionals seek flexible work arrangements to accommodate lives that don’t mesh with a 9-to-5 day. Yet few companies have official policies or programs for alternative schedules—and just as few managers are willing or equipped to provide them for members of their teams. This doesn’t mean you should give up on the idea of flextime if it would help you cut down a lengthy commute or avoid burnout. It just means that the onus is on you to propose a plan that works for you, your boss, and your company.

What the Experts Say Before you pursue a flexible schedule, recognize that you’re likely to be bucking long-held conventions. “TraAdapted from content posted on hbr.org on December 1, 2010

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ditionally, managers were reluctant to have people work remotely because of lack of trust: Are you really working, or are you eating bonbons with your friend?” explains Stewart D. Friedman, founding director of the Wharton School’s Work/Life Integration Project. Even those bosses who trust their employees worry about appearing to favor certain people or allowing productivity to decline. Still, some managers and organizations are reaping the benefits of nontraditional schedules. Research from Lotte Bailyn, MIT management professor and coauthor of Beyond Work-Family Balance, shows that when employees have the flexibility they need, they meet goals more easily, they’re absent or tardy less often, and their morale goes up. By focusing on these upsides and thoughtfully framing your request around them, you greatly increase your chances of getting approval for an alternative work arrangement.

Define What You Want The first step is to figure out what you’re trying to accomplish. Is your goal to spend more time with family? Less time at the office? Or do you want to remove distractions so you can focus on bigger, longer-term projects? Once you’re clear on your goal, decide how you can achieve it while still doing your job effectively. Options include a compressed workweek, a job share, working from home, and taking a sabbatical. Of course, not every job is suited for a flexible arrangement. Before you make a proposal, think carefully about the impact your wished-

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for schedule will have on your boss, your team, and your performance. Next, investigate what policies, if any, your company has and whether there’s a precedent for flexibility. You won’t need to blaze a trail if one already exists.

Design It as an Experiment Many managers will hesitate to approve a flexible schedule, especially if your organization lacks established protocols. You can allay their fears by positioning your proposal as an experiment. “Include a trial period so your boss doesn’t worry that things will fall apart,” says Bailyn. “He or she needs to be able to see the new way of working.” In his book Total Leadership: Be a Better Leader, Have a Richer Life, Friedman talks about nine types of experiments you can do to gently introduce flexibility—everything from working remotely to delegating (see chapter 11, “Real Leaders Have Real Lives”). Whatever you propose, provide an out. Explain that if it doesn’t work, you’re willing to try a different arrangement or resume your former routine. “One can always go back to the original plan, but most such experiments work out very well,” says Bailyn.

Ask for Team Input “Our research has shown that flexibility only works when it’s done collectively, not one-on-one between employee and employer,” says Bailyn. Your team is affected by your work schedule, so you need everyone’s support to make

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your new arrangement a success. Explain what you’re trying to achieve and ask for their input. “Engage them in the planning,” Bailyn says, and let your boss know that you’ve incorporated your colleagues’ suggestions into your proposal. Involving your team can help head off another common concern: Some bosses worry that if they grant one person flexibility, the floodgates will open and everyone will want the same arrangement. This is often an unfounded fear. Friedman points out that there’s a difference between equality and equity, and, in fact, many people prefer a traditional schedule. “You don’t give everyone the same thing because they don’t want the same thing,” he says.

Highlight the Benefits to the Organization Emphasize the organizational benefits over the personal ones. “Whatever you try has to be designed very consciously to not just be about you or your family,” Friedman says. “Instead, have the clear goal of improving your performance at work and making your boss successful.” Demonstrate that you have considered the company’s needs, that your new schedule will not be disruptive, and that it will actually have positive benefits, such as improving your productivity or increasing your relevant knowledge.

Reassess and Make Adjustments Once your flexible schedule has been in place for three or four months, evaluate its success. Are you reaching your

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goals? Is the arrangement causing problems for anyone? Because you’ve designed it as a trial, you’ll want to report back to your boss. “Get the data to support your productivity. Show that it’s working,” says Friedman. And if it’s not, be prepared to suggest changes.

Case Study 1: Creating a Unique Job Share Julie Rocco was working as a program manager at Ford Motor Company when had she her first baby. She knew she wanted to return after her maternity leave, but she didn’t see how she could work a 12-hour-a-day job and also be a hands-on mom. So she asked a mentor at Ford for advice. The answer? Take advantage of the company’s commitment to flexible work by crafting a job that suited her. The mentor also suggested she talk to another Julie at Ford, Julie Levine, about job sharing. Levine, a mother of two, had shared a job before and wanted to try it again, not least because it would give her an opportunity to move into mainstream project development. “It’s very much like picking a spouse,” Levine says of choosing the right job-share partner. “That person is your eyes and ears when you’re not there.” After checking each other out in what they now refer to as “a blind date,” they agreed to pitch themselves as a pair to Ford’s management. The plan was this: Each would work three days a week, overlapping one day—Rocco on Monday, Wednesday, and Thursday; Levine on Tuesday, Wednesday, and Friday. They opted against splitting the week in half to avoid “losing momentum” during long stretches away. Each evening, except for Wednesday, the person

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who’d been in the office would spend an hour and a half on the phone “downloading” the day’s events to the one who’d been home. And on their days in common, they would either work together or, when things were exceptionally busy, divide and conquer. “It’s our job to be seamless,” they told their bosses. “We have the same outlook, the same goal, the same vision, the same work ethic. And you’ll get more from us than one person could give.” “We said we would be a pilot,” Levine recalls. Ford’s management not only agreed, but also put the duo in charge of one of the company’s highest-profile 2011 launches—the new Ford Explorer. The experiment was a success: Rocco and Levine are now known throughout the company as “the two Julies,” twin dynamos. Both say the job share has made them happier at home and work, and also more effective. “One person might work a 12-hour day, go home and collapse, then have to do it all again the next day,” Levine explains. “[With us], because you have to analyze your day and share it with another brain, [when] you show up the next day you’re ready to run.”

Case Study 2: Taking Time Off for Personal Development Amit Desai had been working at Bayer Healthcare for 11 years when he decided he wanted to apply to Wharton’s executive MBA program. However, his enrollment would mean attending a full day of school on Friday every other week and on an occasional Thursday for two years—more than 60 days away from his job as an automation project manager.

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Although Bayer has official policies on telecommuting and flextime, special requests such as Desai’s are decided on a case-by-case basis, so he was told to make a formal proposal. He started by looking into a similar request a previous employee had made and talking to his boss, who supported the plan with one stipulation: If a conflict ever arose, Desai would give priority to work over school. Desai agreed and created a pitch, including a detailed explanation of the MBA program and his goals in applying, a calendar of days he would be in school and how they tied into his work schedule, and a list of benefits to Bayer. “I have the ability to apply knowledge gained at school over the weekend to work on Monday,” he told them. The vice president approved his request and wrote a letter endorsing his Wharton application. Desai completed his MBA in 2011. Looking back, he says that the arrangement worked well because he was careful to coordinate with colleagues. Even though he was away from the office at set times, he reminded his immediate team when he would be out and blocked off the time in his Outlook calendar. “The stress level was low because my supervisor and peers always knew where I was,” he says. And as he’d promised, he prioritized work over classes the few times that conflicts came up. He fulfilled his commitments at work while excelling in school.

Amy Gallo is a contributing editor at Harvard Business Review. Follow her on Twitter: @amyegallo.

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Chapter 8

How Two-Career Couples Stay Happy by Jackie Coleman and John Coleman

More and more of us live in two-career households. Almost half of the married couples in the United States are dual-career, along with roughly 70% in Canada and around two-thirds in the United Kingdom. And these couples often struggle to balance work and home life. We’re part of that cohort, and we’ve had many discussions about what it means to manage a relationship and our careers. Being a former marriage counselor, Jackie has seen problems other couples face—determining who will drop everything to pick up a sick child at school, dividing the household chores, deciding whether to move Adapted from content posted on hbr.org on July 27, 2012

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for one partner’s job, and so on. We’ve experienced those challenges and others, from living in different cities to coordinating crazy travel schedules. And because we each have unique needs and our own ideas about what we want from our jobs and home lives, we know that conversations about dual-career trade-offs can quickly become tense. But balance is possible, and you can thrive. The following tips will help you navigate the stresses of a two-career relationship.

Actively manage expectations In relationships, unspoken assumptions often lead to disappointment and frustration. By clearly communicating those expectations up front, however, two-career couples can answer key questions before they cause tension. For example: How many meals should you eat together, and who will prepare (or buy) them? Who pays which bills? Do you need quiet time to decompress in the evening, or do you want to talk about the day’s events with each other? Do you prefer frequent, brief interactions throughout the day (texts, instant messages, phone calls), or would you rather have lengthier conversations and more time together when you get home? How will you divide childcare responsibilities (drop-off and pickup, sick days, school vacation coverage)? It’s essential to have open and honest discussions about these things, but they won’t always be smooth sailing. Neither person will get his or her way all the time. If you prefer one approach but your spouse or partner wants another, determine the areas in which you’re able to be flexible. At each impasse, instead of focusing mainly

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on your needs, actively listen to your partner’s preferences and concerns. The way you talk through these expectations and conflicts is extremely important. John Gottman, a leading researcher in marriage and relationships, says he can predict divorce with over 90% accuracy solely by analyzing how couples talk to each other in the first five minutes of an argument. And he has more than 35 years of data to back that up. While Gottman finds that the frequency of arguments is not a predictor of divorce, negative patterns like criticism and contempt are. Managing expectations through thoughtful discussion will help you argue constructively, not destructively.

Schedule time with each other The average person spends 8.8 hours per day on the job— and for many of us, that number can double. To make sure everything gets done, we live by our calendars: We schedule meetings, reviews, time to complete tasks, trips to the gym, volunteer work, and breakfasts with friends. Most of us don’t make appointments with our significant others, because we take it for granted that we’ll see them. Research by Kingston and Nock, however, shows that one of the healthiest things you can do for your relationship is to put as much effort into booking time with each other as you do into managing your work schedules. Recognizing that our professional obligations could theoretically take up all of our time, we’ve made a deliberate effort to schedule time together. Even with an infant at home, we commit to at least one date night per week, typically on Fridays. We regularly send each other Google calendar invitations for events we need to attend

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together or even uninterrupted time we’d like to spend with each other. Before we started doing this, we often forgot to communicate these requests effectively, leaving one or both of us frustrated and disappointed. But regular scheduling makes each of us feel prioritized by the other person and gives us time to look forward to each week. This keeps us happier at home and more relaxed at work.

Cheat on your job Despite your best scheduling efforts, work can creep into your personal time. How many times has a meeting at the office conflicted with something you’ve scheduled at home? How often do you need “just a few hours” during evenings and weekends to catch up on e-mails or assignments? We often “cheat” on our families by putting in a few hours of work when we’re at home; there should be corollary times when we cheat on our jobs. Try meeting occasionally for lunch or letting a scheduled date night trump an optional work event. Scheduling ensures that you spend time together—but spontaneity matters, too, and it can make these opportunities even more fun. We work in different areas of town, but whenever Jackie’s meetings are near John’s office, she’ll call to see if she can stop by to say a quick hello. Little gestures like this can make partners feel valued. And impromptu breaks from work for family may even improve work performance. Researchers say that willpower is like a muscle that can get fatigued—taking a quick breather from work can actually boost self-control and productivity on the job. With renewed focus at work, you can both manage your professional stress and keep your relationship fresh. 130

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Integrate work and home Dual-career relationships can become more difficult when work and home occupy completely separate spheres. Not knowing each other’s colleagues can lead to feelings of alienation and disconnectedness. You might feel out of touch with each other’s day-to-day concerns, for example, or not understand inside jokes from work. Or it can be more serious than that: In an informal Vault.com survey, 32% of respondents reported having an “office spouse,” a coworker with whom one has an intimate (nonphysical) relationship. These intimacies can sometimes cross a line. In her practice of more than 20 years, marriage and family therapist Shirley Glass found that 46% of unfaithful wives and 62% of unfaithful husbands had an affair with someone at work. Even if cheating isn’t an issue, you and your partner may be uncomfortable with each other’s long nights at the office, business trips, and bonds with unknown colleagues. To avoid this, find ways to introduce your colleagues and your partner (or your family more broadly). Plan occasional dinners after work and encourage your coworkers to bring their spouses. Share anecdotes about your day and your coworkers with your significant other. Attend work-related social events together. These are just some ways in which you can build trust with your partner and humanize and deepen your professional relationships.

Share the compromises Compromise is essential to healthy two-career couples, but sometimes it falls too consistently on one person. It’s 131

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quite common when children arrive, for example, for one partner (often a woman) to forgo career ambitions while the other gives up time at home. If one person sacrifices more—or even feels that way—frustration and resentment can build. There’s no one-size-fits-all solution here, but by speaking frankly about how much of the load you each feel you’re shouldering, you can prevent one person from making all the concessions. Some big questions to consider: Whose job should you relocate for? Whose family will you live closer to? Does one partner feel responsible for supporting the family financially while the other has more flexibility to pursue what he or she wants, regardless of financial benefit? Who will bear primary child-rearing responsibility? If you look back over a catalog of these decisions and one partner is consistently sacrificing for the other, it might be time to assess whether that’s what you as a couple intended or whether someone is feeling undervalued. Even small compromises add up: Whose family do you visit on which holidays? Who does which household chores? Periodically track these things for a week or two or simply discuss them to make sure the relationship really is a partnership—with decisions and compromises shared fairly.

Reassess Just like a year-end review at work, regularly carve out time to assess your relationship and your priorities as individuals and as a couple. Keep the lines of communication open and adapt your plans as needed. How are things going? If your spouse or partner could change

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something, what would it be? Do you both feel connected? What’s working well? Overall, how is your partner feeling? Asking questions like these shows that you’re making the relationship a high priority. And that will help you manage dual-career stress and can keep things on track at work and at home.

Jackie Coleman is a former marriage counselor and currently works on education programs for the State of Georgia. John Coleman, her husband, is a coauthor of Passion & Purpose: Stories from the Best and Brightest Young Business Leaders (Harvard Business Review Press, 2011). Follow him on Twitter: @johnwcoleman.

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Chapter 9

Don’t Take a Bad Day Home with You by John Baldoni

Feeling frustrated at work—especially late in the day, when you’re worn out? Right before you go home, do something that comes easily to you. That advice was given to my daughter, a drop-in diver in a collegiate program. One day she had hit a wall and was about to head home when her coach pulled her aside and said, “Instead of leaving in a state of frustration, why don’t you finish practice with a dive you know you do well?” My daughter followed her suggestion and left feeling much better about herself and her abilities. Adapted from content posted on hbr.org on August 9, 2010

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And that’s exactly what we nondivers need to do. Things inevitably go wrong on the job because of our own or others’ mistakes or failed systems or processes. Whatever the cause, tension builds. To prevent that stress from following you out the door and ruining your evening, dissipate it before you wrap things up. Whether it’s sending off a routine report or replying to a few straightforward e-mails, cross an item off your to-do list. Pick something that doesn’t require much thought. This type of activity tends to slow your heart rate and give you a sense of ownership of what you’re doing. Once you’ve completed the task—and are hopefully feeling better—exit promptly. Do not check your e-mail one last time. Do not linger to see who else is hanging around. Just leave—gracefully, and with a smile on your face. The onerous work will be there tomorrow, but for the moment, flush it from your memory. For now, just go. Of course, this won’t always work. Sometimes you’ll still leave exasperated. And if that happens more often than not, you probably have a larger problem to solve. You may need to find a new position, a new employer, or even a new line of work. But for the occasional bad day, doing one more dive that makes you feel good about yourself before you head home can help you leave your frustrations behind you.

John Baldoni is a leadership consultant, coach, and speaker. His newest book is The Leader’s Pocket Guide (AMACOM, 2012).

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Section 4

Finding the Tools That Work for You

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Chapter 10

Positive Intelligence by Shawn Achor

In July 2010 Burt’s Bees, a personal-care products company, was undergoing enormous change as it began a global expansion into 19 new countries. In this kind of high-pressure situation, many leaders pester their deputies with frequent meetings or flood their in-boxes with urgent demands. In doing so, managers jack up everyone’s anxiety level, which activates the portion of the brain that processes threats—the amygdala—and steals resources from the prefrontal cortex, which is responsible for effective problem solving. Burt’s Bees’s then-CEO, John Replogle, took a different tack. Each day, he’d send out an e-mail praising a team member for work related to the global rollout.

Reprinted from Harvard Business Review, January–February 2012 (product #R1201G)

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He’d interrupt his own presentations on the launch to remind his managers to talk with their teams about the company’s values. He asked me to facilitate a three-hour session with employees on happiness in the midst of the expansion effort. As one member of the senior team told me a year later, Replogle’s emphasis on fostering positive leadership kept his managers engaged and cohesive as they successfully made the transition to a global company. That outcome shouldn’t surprise us. Research shows that when people work with a positive mind-set, performance on nearly every level—productivity, creativity, engagement—improves. Yet happiness is perhaps the most misunderstood driver of performance. For one, most people believe that success precedes happiness. “Once I get a promotion, I’ll be happy,” they think. Or, “Once I hit my sales target, I’ll feel great.” But because success is a moving target—as soon as you hit your target, you raise it again—the happiness that results from success is fleeting. In fact, it works the other way around: People who cultivate a positive mind-set perform better in the face of challenge. I call this the “happiness advantage”—every business outcome shows improvement when the brain is positive. I’ve observed this effect in my role as a researcher and lecturer in 48 countries on the connection between employee happiness and success. And I’m not alone: In a meta-analysis of 225 academic studies, researchers Sonja Lyubomirsky, Laura King, and Ed Diener found strong evidence of directional causality between life satisfaction and successful business outcomes. Another common misconception is that our genetics, our environment, or a combination of the two deter-

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Positive Intelligence

mines how happy we are. To be sure, both factors have an impact. But one’s general sense of well-being is surprisingly malleable. The habits you cultivate, the way you interact with coworkers, how you think about stress—all these can be managed to increase your happiness and your chances of success.

Develop New Habits Training your brain to be positive is not so different from training your muscles at the gym. Recent research on neuroplasticity—the ability of the brain to change even in adulthood—reveals that as you develop new habits, you rewire the brain. Engaging in one brief positive exercise every day for as little as three weeks can have a lasting impact, my research suggests. For instance, in December 2008, just before the worst tax season in decades, I worked with tax managers at KPMG in New York and New Jersey to see if I could help them become happier. (I am an optimistic person, clearly.) I asked them to choose one of five activities that correlate with positive change: • Jot down three things they were grateful for. • Write a positive message to someone in their social support network. • Meditate at their desk for two minutes. • Exercise for 10 minutes. • Take two minutes to describe in a journal the most meaningful experience of the past 24 hours.

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The participants performed their activity every day for three weeks. Several days after the training concluded, we evaluated both the participants and a control group to determine their general sense of well-being. How engaged were they? Were they depressed? On every metric, the experimental group’s scores were significantly higher than the control group’s. When we tested both groups again, four months later, the experimental group still showed significantly higher scores in optimism and life satisfaction. In fact, participants’ mean score on the life satisfaction scale—a metric widely accepted to be one

HAPPINESS AND THE BOTTOM LINE For companies, happy employees mean better bottomline results. Employees who score low in “life satisfaction,” a rigorously tested and widely accepted metric, stay home an average of 1.25 more days a month, a 2008 study by Gallup Healthways shows. That translates into a decrease in productivity of 15 days a year. In a study of service departments, Jennifer George and Kenneth Bettenhausen found that employees who score high in life satisfaction are significantly more likely to receive high ratings from customers. In addition, researchers at Gallup found that retail stores that scored higher on employee life satisfaction generated $21 more in earnings per square foot of space than the other stores, adding $32 million in additional profits for the whole chain.

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of the greatest predictors of productivity and happiness at work—moved from 22.96 on a 35-point scale before the training to 27.23 four months later, a significant increase. Just one quick exercise a day kept these tax managers happier for months after the training program had ended. Happiness had become habitual. (See the sidebar “Happiness and the Bottom Line.”)

Help Your Coworkers Of the five activities described above, the most effective may be engaging positively with people in your social support network. Strong social support correlates with an astonishing number of desirable outcomes. For instance, research by Julianne Holt-Lunstad, Timothy Smith, and Bradley Layton shows that high levels of social support predict longevity as reliably as regular exercise does, and low social support is as damaging as high blood pressure. The benefits of social support are not just physical. In a study of 1,648 students at Harvard that I conducted with Phil Stone and Tal Ben-Shahar, we found that social support was the greatest predictor of happiness during periods of high stress. In fact, the correlation between happiness and Zimet’s social support scale (the academic measure we used to assess students’ positive engagement with their social networks) was a whopping .71—for comparison, the correlation between smoking and cancer is .37. That study focused on how much social support the students received. But in follow-on research I conducted in March 2011, I found that even more important to sustained happiness and engagement was the amount

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THE PERFORMANCE CONNECTION

• In a sweeping meta-analysis of 225 academic studies, Sonja Lyubomirsky, Laura King, and Ed Diener found that happy employees have, on average, 31% higher productivity; their sales are 37% higher; their creativity is three times higher. • My research shows that employees who score the highest on providing social support are 40% more likely to receive a promotion in the following year, report significantly higher job satisfaction, and feel 10 times more engaged by their jobs than people who score in the lowest quartile.

of social support the students provided. For example, how often does a student help others when they are overwhelmed with work? How often does he initiate social interactions on the job? Social support providers— people who picked up slack for others, invited coworkers to lunch, and organized office activities—were not only 10 times more likely to be engaged at work than those who kept to themselves; they were 40% more likely to get a promotion. How does social support work in practice as a tool for employee happiness? Ochsner Health System, a large health care provider that I work with, uses an approach

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it calls the “10/5 Way” to increase social support among employees and patients. We educated 11,000 employees, leaders, and physicians about the impact of social support on the patient experience, and asked them to modify their behavior. When employees walk within 10 feet of another person in the hospital, they must make eye contact and smile. When they walk within 5 feet, they must say hello. Since the introduction of 10/5, Ochsner has experienced an increase in unique patient visits, a 5% increase in patients’ likelihood to recommend the organization, and a significant improvement in medical-practice provider scores. Social support appears to lead to not only happier employees but also more-satisfied clients.

Change Your Relationship with Stress Stress is another central factor contributing to people’s happiness at work. Many companies offer training on how to mitigate stress, focusing on its negative health effects. The problem is, people then get stressed-out about being stressed-out. It’s important to remember that stress has an upside. When I was working with Pfizer in February 2011, I asked senior managers to list the five experiences that most shaped who they are today. Nearly all the experiences they wrote down involved great stress—after all, few people grow on vacation. Pick any biography and you’ll see the same thing: Stress is not just an obstacle to growth; it can be the fuel for it. Your attitude toward stress can dramatically change how it affects you. In a study Alia Crum, Peter Salovey, and I conducted at UBS in the midst of the banking crisis

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and massive restructuring, we asked managers to watch one of two videos, the first depicting stress as debilitating to performance and the second detailing the ways in which stress enhances the human brain and body. When we evaluated the employees six weeks later, we found that the individuals who had viewed the “enhancing” video scored higher on the Stress Mindset Scale—that is, they saw stress as enhancing, rather than diminishing, their performance. And those participants experienced a significant drop in health problems and a significant increase in happiness at work. Stress is an inevitable part of work. The next time you’re feeling overwhelmed, try this exercise: Make a list of the stresses you’re under. Place them into two groups— the ones you can control (like a project or your in-box) and those you can’t (the stock market, housing prices). Choose one stress that you can control and come up with a small, concrete step you can take to reduce it. In this way you can nudge your brain back to a positive—and productive—mind-set.

It’s clear that increasing your happiness improves your chances of success. Developing new habits, nurturing your coworkers, and thinking positively about stress are good ways to start.

Shawn Achor is the CEO of Good Think and the author of The Happiness Advantage (Crown Business, 2010).

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Chapter 11

Real Leaders Have Real Lives by Stewart D. Friedman

You can be a committed “A” player executive, a good parent, an attentive spouse, and a healthy person with time for community engagement and hobbies. How on earth do you do all that? Stop juggling and start integrating. Begin with a clear view of what you want from—and can contribute to—each domain of your life (work, home, community, and self ). Carefully consider the people who matter most to you and the expectations you have for one another. Then experiment with some minor changes and see how they affect all four domains over a short period. If an experiment doesn’t work out in one or more areas,

Adapted from “Be a Better Leader, Have a Richer Life,” Harvard Business Review, April 2008 (product #R0804H) and content posted on hbr.org on February 21, 2013

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you make adjustments or put an end to it, and little is lost. But if it does work out, it’s a small win. Rack up enough small wins, and you’re well on your way to a life that’s less stressful and more productive. Skeptical? Many people are when they first hear about this approach. But time and again, I’ve seen maxed-out professionals use it to find the greater harmony they’re seeking. To show what it looks like in practice, I’ll share a couple of stories from Target executives who have experimented their way toward improving their well-being and performance.

Manage Boundaries David is a VP accountable for a multibillion-dollar P&L. (All names and titles are disguised.) For years, he felt a relentless tension between the domains of work and home, as many of us do. “I spent most of my waking hours at work,” he explains, “and I always shut down from work at home.” But keeping things separate like this hurt his relationship with his wife. They talked about the kids, nothing more, because that was all they had in common. And at work, David never had enough time to prepare for all his meetings. So he devised an experiment. Before leaving the office each day, he’d look at the next day’s schedule and pick one big meeting to get ready for. On his drive home—at a decent hour—he’d think about what he could do and say at that meeting. When he got home, he’d run some ideas by his wife.

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It worked beautifully: “This gave us something new to talk about each day, it gave her a much better understanding of what I do, it engaged her, and it enhanced our relationship because we were having richer conversations. My wife made good suggestions—and I’ve had better meetings as a result.” The experiment has also had a positive effect on David’s team. After he told his direct reports he was changing his hours in the office, one of them approached him with a request to adjust her schedule, because it was aggravating a medical problem. Another employee said he felt empowered to take care of an aging parent during the day when he needed to. He didn’t feel guilty about it—David’s own actions made it clear that it was OK. “The example I was setting before was work first, work first, work first,” David reflects. “Now I might be in the office for fewer hours, but I’m making faster and better decisions. And my wife has more understanding when work does have to come first. In the long term, this means that I’m a more engaged leader for Target without an unmanageable tension between my wife and my work.”

Be the Change Changing old run-yourself-ragged norms isn’t easy. But by modeling new behavior, senior executives at Target are accelerating a “well-being” movement in the organization. Take Max, who now runs the company’s largest P&L business. He admits he “saw a couple of eyebrows raised” when he first told his team that he would come in late

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two mornings a week so he could “go to the gym and have breakfast with my kids.” Max adopted this schedule as an experiment. He’s kept it up because it’s effective: He’s more closely connected to his family, and it’s noticeably improving his focus and performance at work. David (from earlier) also finds this to be true. His boss supports his experiments and asks for regular updates on them. “She’s also given me tips and shared what she’s learned in her experience,” he says. “I talk to her about all this to hold myself accountable. She’s reminded me that each new job in my career will be bigger and more demanding, so it’s critical to get better and better about managing my commitments as I continue to develop.” When senior leaders in an organization take highly visible steps to reduce stress and improve performance— as David, Max, and their managers have done—more and more employees feel free to generate experiments of their own. Slowly, the culture changes. People at all levels discover that it makes good business sense to take care of all the things that matter in their lives.

Pursue Four-Way Wins The most fruitful experiments help you make improvements across the four domains. At work, you may want to increase productivity or reduce hidden costs. Goals for home and community may include strengthening relationships and contributing more to social causes. For self, they’re usually about becoming healthier and finding greater meaning in life. How can a single experiment help you check off several—or all—of the boxes in table 11-1? Some experi-

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ments improve one domain directly and others indirectly. For example, being more disciplined about your diet will have a direct impact on your health, but it may also give you more energy for your work and help you handle stress better, which in turn might make you a better parent and friend. Other activities—such as running a half-marathon with your kids to raise funds for a charity sponsored by your company—will feed all four domains simultaneously. Whether the benefits are direct or indirect, achieving a four-way win is the goal. That’s what makes the changes sustainable: Everyone gains. Keep in mind that some benefits may be subtle or delayed—far-off

TABLE 11-1

Where are you feeling the most pain? Before you can design smart experiments to better integrate the four domains of your life, you’ll need to figure out what’s most important to you and identify your biggest pain points. Using a four-way chart will help you set your priorities. I’ve filled out a sample one here, based on a fictitious professional we’ll call Joan, but you can find a blank worksheet and other tools at www.totalleadership.org.

  Work Home Community Self Overall

Importance

Focus

Satisfaction 1=not at all satisfied 10=fully satisfied

20% 40% 15% 25% 100%

70% 20% 0% 10% 100%

1 2 3 4 5 6 7 8 9 10 1 2 3 4 5 6 7 8 9 10 1 2 3 4 5 6 7 8 9 10 1 2 3 4 5 6 7 8 9 10 1 2 3 4 5 6 7 8 9 10

Joan’s reflection: I have to admit that what my husband says is true: I spend most of my time either at work or working from home. We don’t do anything together anymore, except take care of the kids. We’re losing touch as a couple. Also, I’m feeling tired and out of shape, even though my health is important to me. I do think my job and family are more important than community stuff, but it surprises me to realize I’m doing nothing in that area. Maybe I could do something active with my husband that would help me and our relationship—and even benefit the community.

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career advancements, for instance, or a contact who might ultimately offer valuable connections.

Pace Yourself—and Gauge Your Progress It’s not practical to try out more than three experiments at once. (Typically, two turn out to be relatively successful and one goes haywire.) So after you’ve brainstormed lots of possibilities, narrow down the list to the three options that will: • Give you the best overall return on your investment • Cost the most in regret and missed opportunities if you don’t do them • Allow you to practice the leadership skills you most want to develop • Involve more of what you enjoy doing • Move you closest to your vision of how you want to lead your life Once you begin experimenting, however, don’t become too wedded to the details of any one plan. You will at some point need to make adjustments. The only way to fail with an experiment is to fail to learn from it, which makes useful metrics essential (see table 11-2). No doubt it’s better to achieve results than to fall short, but failed experiments give you, and those around you, information that helps create better ones in the future.

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TABLE 11-2

Experiment worksheet Suppose that Joan, the hypothetical professional described in table 11-1, has decided to try exercising three mornings a week with her spouse to address the pain points she identified in her four-way chart. In the sample worksheet below, she spells out her experiment’s goals and tracks her progress in achieving them. As you implement your own experiments, you may find that your initial goals or metrics are too broad or vague, so refine your scorecard as you go to make it more useful. The main point is to have practical ways of measuring your progress.

Experiment: Exercise three mornings a week with my husband. Experiment’s goals

How I will measure success

Implementation steps

Work

Improving alertness and productivity

No caffeine to get through the day, better morale on my team, more productive sales calls

Home

Spending more time with husband

Fewer arguments, feeling closer

Community

Increasing strength to participate in athletic fundraising events with friends

Three 10K fundraising walks completed within a year

• Get doctor’s feedback on exercise plan • Join gym • Set alarm earlier on exercise days • Tell coworkers, family, and friends about my plan, how I need their help, and how it will benefit them

Self

Improving self-esteem

Greater confidence

Life area

For a blank version of this worksheet and other tools, go to www.totalleadership.org.

Depending on your goals, your metrics may include cost savings from reduced travel, number of e-mail misunderstandings averted, degree of satisfaction with family time, hours spent volunteering at a teen center, and so on. They can be objective or subjective, qualitative or quantitative, reported by you or by others, and frequently or intermittently observed.

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Highly ambitious experiments usually fail because they’re too much to handle. When the stakes are smaller, it’s easier to overcome the fear of failure that inhibits change—and you open doors that would otherwise be closed. You can say to your stakeholders, “Let’s just try this. If it doesn’t work, we’ll go back to the old way or try something different.” People who will be affected by the change will be more receptive if they know it’s not permanent and if they have a say in whether it’s working according to their expectations.

Stewart D. Friedman is Practice Professor of Management at the Wharton School. Formerly the head of Ford Motor’s Leadership Development Center, he is the author of Total Leadership: Be a Better Leader, Have a Richer Life (Harvard Business Review Press, 2008). Follow him on Twitter: @StewFriedman.

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Chapter 12

A Practical Plan for When You Feel Overwhelmed by Peter Bregman

We’ve all experienced it: that feeling that we’ve got so much to do that there’s no chance we’ll get it all done. And certainly not done on time. Right now, I’m feeling completely overwhelmed by my to-do list. Here’s the crazy part. I just spent the last two days trying to work without actually working. I start something but get distracted by the internet. Or a phone call. Or an e-mail. At a time when I need to be most efficient, I’ve become less efficient than ever. You’d think it would be the opposite—that when we have a lot to do, we’d become very productive in order to get it done. Sometimes that happens. Adapted from content posted on hbr.org on September 23, 2010

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But often, when there’s so much competing for our attention, we don’t know where to begin—so we don’t begin anywhere. Next time you find yourself in this situation, try this approach:

1. Write down everything you have to do on a piece of paper. Resist the urge to use technology for this task. Why? I’m not sure, but somehow writing on paper—and then crossing things out—creates momentum. 2. Spend 15 minutes completing as many of the easiest, fastest tasks on your list as you can. Make your quick phone calls. Send your short e-mails. Don’t worry about whether these are the most important tasks on your list. You’re moving. The goal is to cross off as many tasks as possible in the shortest time. Use a timer to keep you focused. 3. Work on the most daunting task for the next 35 minutes without interruption. Turn off your phone, close all the unnecessary windows on your computer, and choose the most challenging task on your list, the one that instills the most stress or is the highest priority. Then work on it and only it—without hesitation or distraction—for 35 minutes. 4. Take a break for 10 minutes, then begin the cycle again. After 35 minutes of focused work, take 156

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A Practical Plan for When You Feel Overwhelmed

a break. Then start the hourlong process over again, beginning with the 15 minutes of quick actions. “Thirty years ago,” Anne Lamott writes in her book Bird by Bird, “my older brother, who was 10 years old at the time, was trying to get a report on birds written that he’d had three months to write. It was due the next day. We were out at our family cabin in Bolinas, and he was at the kitchen table close to tears, surrounded by binder paper and pencils and unopened books on birds, immobilized by the hugeness of the task ahead. Then my father sat down beside him, put his arm around my brother’s shoulder, and said, ‘Bird by bird, buddy. Just take it bird by bird.’” That’s it. Bird by bird, starting with a bunch of easy birds to help you feel accomplished and then tackling a hard one to gain serious traction and reduce your stress level. All timed. Working within a specific and limited time frame is important because the race against time keeps you focused. When stress is generalized and diffuse, it’s hard to manage. Using a short time frame actually increases the pressure but keeps your effort specific and particular to a single task. That increases good, motivating stress while reducing negative, disconcerting stress. So the fog of feeling overwhelmed dissipates, and forward movement becomes possible. In practice, I’m finding that although I make myself work at least the full 35 minutes, I don’t always stop when the 35 minutes of hard work are over, because I’m in the middle of something and I have traction. On

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Finding the Tools That Work for You

the other hand, though it’s tempting, I don’t exceed the 15 minutes of easy, fast work. When the timer stops, so do I, immediately transitioning to the hard work. Maybe this method has been working simply because it’s novel for me and, like a new diet, offers some structure to motivate my effort. Today, though, it doesn’t matter, because it’s a useful tool for me. And I’ll keep using it until I don’t need it or it stops working. Am I still stressed? Sure. But overwhelmed? Much less so. Because I’m crossing things off my list and getting somewhere on my little tasks as well as my big ones, bird by bird.

Peter Bregman is a strategic adviser to CEOs and their leadership teams. His latest book is 18 Minutes: Find Your Focus, Master Distraction, and Get the Right Things Done (Business Plus, 2012).

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Chapter 13

Desk Yoga 6 Poses You Won’t Be Embarrassed to Do—Even in an Open Environment by Linda Steinberg

Many of us sit behind our desks and stare at computer screens for far too much of the day. Although concentrated work can be beneficial to our jobs, it can be taxing on our bodies. The following yoga exercises will help you relieve any tension you might feel after too many hours of poring over spreadsheets. The poses also provide longterm benefits with regular practice. Each pose takes fewer than two minutes to complete, and you can do the whole series in just 10 minutes—but I promise you’ll feel the effects long after. Breathe deeply throughout the poses because sending oxygen to your muscles allows them to relax.

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Finding the Tools That Work for You

Shoulder Rolls (2 minutes)

• Sitting upright, lift your right shoulder to your ear. Slowly roll your shoulder around and back, dropping it away from your ear. • Lift your left shoulder to your ear. Slowly roll your shoulder around and back, dropping it away from your ear. • Continue these rolls three more times, alternating right and left. • Lift both shoulders up to your ears and hold for a breath. Release them, slowly rolling your shoulders around and back, dropping them away from your ear. Repeat five times and then relax your shoulders.

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Desk Yoga

Open Chest Stretch (1 minute)

• Sit near the edge of your chair and interlace your fingers behind you, palms together and facing your back. • Lean forward slightly, lifting your arms so that you feel the stretch in your chest. • Inhale slowly, lifting your chest. • Exhale and relax your shoulders away from your ears. • Hold for 10 to 15 breaths. • Slowly release your hands and return them to your sides.

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Finding the Tools That Work for You

Neck Stretch (1 minute)

• Sit upright without letting your back touch the back of the chair. • Hold your head directly over your spine, as if there is a string lifting the crown of your head up. • Drop your right ear toward your right shoulder without lifting your right shoulder or turning your head. • Take several breaths in and out, feeling the stretch on the left side of your neck. • To create a deeper stretch, reach your right hand over your head and place it on the left side of your face. Hold the pose for at least five more breaths and then release your hand and straighten your neck, gently massaging your neck and shoulders with your left hand. • Repeat on your left side.

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Desk Yoga

Chair Twist (2 minutes)

• Sit near the edge of the chair, but turn your thighs toward the right side of the chair so that you are sitting diagonally. If you have an armrest on the side of your chair, bring your thighs as close to it as possible. • Move your arm to the back of the chair on the opposite side, taking hold of the chair back with your right hand. With your left hand, take hold of your right knee or armrest. • Breathe deeply, focusing on lengthening your spine. • Twist to the right, pressing your right hand against the back of the chair to deepen the stretch. Focus on drawing your shoulder blades down. • Breathe deeply, completely filling and emptying your lungs. Hold the pose for 10 to 15 breaths. • Return to the center. • Repeat on your left side. 163

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Finding the Tools That Work for You

Reverse Prayer Pose (2 minutes)

• Sit near the edge of your chair. Reach your arms around behind you and bring your palms together, fingertips pointing down. • Rotate your wrists and turn your fingertips in toward your spine until your fingertips are pointing up. • Slide your palms back together in prayer position. • Use one hand to help pull the other hand up further on your back, to a comfortable spot. Be sure your shoulders are straight, not rounded. • Press the outside edges of your palms lightly into your back. Press your palms together gently. • Press your feet into the floor. • Breathe deeply, completely filling and emptying your lungs. Hold the pose for 10 to 15 breaths. • Exhale and release your arms.

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Desk Yoga

Twisted Arms (2 minutes)

• Sit upright without letting your back touch the back of the chair. • Reach your arms out in front of you at shoulder level. • Tuck your right elbow into the crook of your left arm, and curl your forearms up into a 90-degree angle. The backs of your hands will be against each other. • If you can, place your left fingers on your right palm, keeping palms straight in a single line with your nose. • Breathe deeply, completely filling and emptying your lungs. Hold the pose for 10–15 breaths. • Return to the center. (continued)

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Finding the Tools That Work for You

(continued) • Tuck your left elbow into the crook of your right arm, and curl your forearms up into a 90-degree angle. The backs of your hands will be against each other. • If you can, place your right fingers on your left palm, keeping palms straight in a single line with your nose. • Breathe deeply, completely filling and emptying your lungs. Hold the pose for 10 to 15 breaths. • Exhale and return to the center.

Linda Steinberg is a certified yoga instructor who has been practicing and teaching partner-assisted yoga for over 20 years. Learn more about her work at www.yoga tothetenth.com.

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Chapter 14

Diversify Yourself by Peter Bregman

Suicides account for almost one-third of U.S. workrelated deaths caused by violence. It’s tempting to blame companies for driving their employees too hard and failing to handle people with care, compassion, and respect. But the problem is deeper and more complicated than callous management teams who care about nothing except profits. The problem is also in how we as professionals see and define ourselves. Often the first question we ask when we meet someone is, “What do you do?” We have become our work, our professions. Connected 24/7 via mobile devices, obsessively checking e-mail and voice mails, we have left no space for other parts of ourselves. If we spend all our time working, traveling to work, planning to work, thinking about work, or communicating Adapted from content posted on hbr.org on October 21, 2009

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Finding the Tools That Work for You

about work, then we will see ourselves as workers and nothing more. As long as work is going well, we can survive that way. But when we lose our jobs, or fear that we might, our very existence is put into question. “Establishing your identity through work alone can restrict your sense of self and make you vulnerable to depression, loss of selfworth, and loss of purpose when the work is threatened,” says Dr. Paul Rosenfield, assistant clinical professor of psychiatry at Columbia University. Who am I if you take away my work? That’s a question to which we’d better have a solid answer. Fortunately, once we realize this, we can do something about it. We can diversify. I don’t mean diversifying your money, though that’s a good idea, too. I mean diversifying yourself so that when one identity fails, the other ones keep you alive. If you lose your job but you identify passionately as a mother or a father, you’ll be fine. If you have a strong religious identity or view yourself as an artist, you’ll be fine. Here’s the thing, though: It’s not enough to see yourself in a certain way; you need to act on it. It won’t help if you identify as a father but rarely spend time with your children. Or if religion is a big part of your identity and yet you rarely engage in religious activities. Cultivating multiple identities will help you perform better in each one, because you learn things as an athlete or a parent or a poet that will make you a better employee or leader. And if you believe that doing nothing but work is necessary to support your lifestyle, then it’s worth look-

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Diversify Yourself

ing at ways to change your lifestyle, so you don’t kill yourself trying to maintain it. Walk away from e-mail and have dinner with your family. Leave work at a decent hour and play tennis with a friend. Choose nonwork rituals that have meaning to you (see also chapter 3, “Manage Your Energy, Not Your Time”). Doing the same thing repeatedly over time solidifies your identity.

When a good friend of mine lost her job, I called to see if I could do anything. My intention was to help her find a new job as soon as possible; I knew money was tight. I was pleasantly surprised, though. She told me she had decided to postpone her job search for a few months. She was pregnant and wanted to focus on that for a while. Once she felt ready, she would look for work. She was too busy creating an identity as a mother to get caught up in her identity as a worker. Recently I received an e-mail from her telling me she was back at work. “I love the job,” she told me. “It’s a great balance to motherhood.”

Peter Bregman helps CEOs and their leadership teams break down silos and tackle their most important priorities together. His latest book is 18 Minutes: Find Your Focus, Master Distraction, and Get the Right Things Done (Business Plus, 2011). He can be reached at www.peterbregman.com.

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Index

ADD. See attention deficit disorder (ADD) ADT. See attention deficit trait (ADT) alcohol, 42, 54, 57 alignment, with core values, 76–77 alternative schedules, 119–125, 149–150 “always on” ethic, 53–54, 99, 100, 108, 117–118, 167 appreciation, expressing, 55, 69–70, 141 attention deficit disorder (ADD), 31, 32–35 attention deficit trait (ADT), 27–50 about, 27–28 brain processes and, 35–38 cause of, 31–32, 35 combatting, 28–32 company leadership and, 48–50 management of, 38–48 symptoms of, 31, 32 bad days, 135–136 “be-good approach,” 6–7

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big picture view, 2–3 blood glucose levels, 42, 65 blood pressure, 19, 20 boundaries, managing, 99–118, 148–149 brain anatomy, 36 executive center of, 29 overload, 35, 36–38 physical care of, 29, 41, 42–43 breakout principle, 15–26 breaks, 22–23, 55, 65–68, 78, 130, 156–157 breathing exercises, 22, 55, 69, 159, 165, 166 chair twist exercise, 163 changes, experimenting with, 112–114, 121, 147–154 compromise, 131–132 core values, 56, 76–77 decision making, 3–4, 36, 87–98 delegation, 75–76 desired responses, 6 desk yoga, 159–166 diet, 29, 46, 42–43, 54, 61, 64–65

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Index

distractions, 71–73 dual-career couples, 127–133 efficiency, 19, 20 e-mail, 2, 4, 6, 29, 46, 44, 55, 63, 72, 109 emotional energy, 55, 68–71 emotions fear, 36–37 negative, 28, 55, 68–69, 79 positive, 7, 28–29, 39–41, 55, 68–70 energy audit, 61, 62–64 emotional, 55, 68–71 mental, 3–4, 55, 71–73 physical, 17, 54–55, 61, 64–68 signs of flagging, 54, 65 spiritual, 56, 73–77 energy renewal interesting tasks and, 4–5 organizational support for, 77–80 rituals for, 53–80 engagement, 4–5 executive functioning (EF), 36, 38, 39 exercise, 22, 29, 46, 43, 54, 58, 61, 62, 66, 68, 141, 159–166 experimentation, 99–117, 121, 124, 147–154 failures, compassion for own, 2 fear, 36–37 fight-or-flight response, 17, 19–20, 68–69 flexible schedules, 119–125 frontal lobes, 36, 37, 44, 45–48 “get-better approach,” 6–7 goals assessing achievability of, 92

assessing value of, 93–98 pursuing sequentially, 97–98 habits, cultivating new, 141–143 happiness, 140–145 heart rate, 19, 20, 136 human spirit, 73–77 identity, 167–169 if-then planning, 5–6 improvement, focus on, 6–7 insight, 17, 21, 23, 24 interest, 4–5 interruptions, 55, 71–73 job sharing, 120, 123–124 leading by example, 148–150 life dimensions, 89–90. See also life domains life domains, 147, 148, 150–152. See also life dimensions long lens, 55, 70 mental energy, 3–4, 55, 71–73 motivation, 8–10 multitasking, 71–72 naps, 16, 22, 82, 83 neck stretch (exercise), 162 needs-wants spectrum, 93–94 negative emotions, 28, 55, 68–69, 79 negative stressors, 17–18 new-normal state, 16, 21, 24 nutrition, 29, 46, 42–43, 54, 61, 64–65 OHIO (Only handle it once) rule, 29, 44 open chest stretch (exercise), 161

172

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Index

optimism, 8–9 organization, 29, 43–45 perfectionism, 6–7 personal development, 124–125 physical energy, 17, 54–55, 61, 64–68 positive emotions, 7, 28–29, 39–41, 55, 68–70 positive intelligence, 139–146 prevention focus, 9–10 priority setting, 55, 73, 89, 90–91, 132, 151 productivity “always on” ethic and, 117–118 breakout principle and, 15–26 energy renewal program and, 59–61 feeling overwhelmed and, 155–158 happiness and, 144 multitasking and, 71–72 time off and, 101–102 professional services “always on” ethic in, 99, 100 predictable time off in, 99–118 time pressures in, 101 progress, appreciating your, 7–8 promotion focus, 8–9 relationship time, 129–130 relaxation response, 16–17, 19–24, 69 renewal rooms, 78–79 reverse lens, 55, 70 reverse prayer pose (exercise), 164 rituals, 3–4, 53–80, 84. See also routines routines, 3–4. See also rituals

self-compassion, 2 shoulder rolls (exercise), 160 sleep, 22, 29, 41, 46, 42, 54, 57–58, 61, 64, 81–84 social support network, 143–145 spiritual energy, 56, 73–77 strengths, 75 stress attitude toward, 145–146 definition of, 17 positive aspects of, 17–18 ways to defeat, 1–11 stress hormones, 19, 21 stress-reduction programs, company sponsored, 18–19 tasks completion of easy, 135–136, 156 delegation of, 75–76 feeling overwhelmed by, 155–158 interesting, 4–5 on to-do list, 5–6, 156 “teaming” at BCG, 113–114 time as finite resource, 54, 57 limits on, 88–89 time management, 43–45, 71–73, 108–109, 129–130 time off, 99–118 benefits of, 100–102, 105–107 dialogue about, 110–112 experiment with predictable, 102–118 leadership support for, 114–117 predictable, 101 strict mechanism for, 107–110 vacations, 108–109 to-do lists, 5–6, 156 trade-offs, 89, 96–97, 128

173

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Index

24/7 work ethic, 53–54, 99, 100, 108, 117–118, 167 twisted arms (exercise), 165–166 two-career couples, 127–133 “ultradian rhythms”, 65 “ultradian sprints,” 71–72 vacations, 108–109 value assessment, 93–98 voice mail, 4, 29, 55, 72, 167 wants, 93–94 wide lens, 55, 70 work capacity, 58–59 work hours, 53–54, 57, 100, 119, 123, 129

work identity, 167–169 work-life balance flextime and, 119–125 time off and, 105, 107 trade-offs, 87–98 two-career couples and, 127–133 workplace amenities, 30, 48–49, 78 work processes dialogue about, 110–112 experimentation with new, 112–114 Yerkes-Dodson curve, 20–21, 22 yoga, desk, 159–166

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Notes

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Smart advice and inspiration from a source you trust. Whether you need help tackling today’s most urgent work challenge or shaping your organization’s strategy for the future, Harvard Business Review has got you covered.

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Smarter than the average guide

Hbr Guide to Finance Basics for Managers Speak the language Decide with data Manage profitably

HBR Guide to Finance Basics for Managers

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Harvard Business Review Guides Arm yourself with the advice you need to succeed on the job, from the most trusted brand in business. Packed with how-to essentials from leading experts, the HBR Guides provide smart answers to your most pressing work challenges.

The titles include: HBR Guide to Better Business Writing HBR Guide to Finance Basics for Managers HBR Guide to Getting a Job HBR Guide to Getting the Mentoring You Need HBR Guide to Getting the Right Work Done HBR Guide to Giving Effective Feedback HBR Guide to Making Every Meeting Matter HBR Guide to Managing Stress HBR Guide to Managing Up and Across HBR Guide to Persuasive Presentations HBR Guide to Project Management

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HBR Guide to Finance Basics for Managers

HARVARD BUSINESS REVIEW PRESS Boston, Massachusetts

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Find more digital content or join the discussion on www.hbr.org. The web addresses referenced and linked in this book were live and correct at the time of the book’s publication but may be subject to change. Copyright 2012 Harvard Business School Publishing Corporation All rights reserved No part of this publication may be reproduced, stored in or introduced into a retrieval system, or transmitted, in any form, or by any means (electronic, mechanical, photocopying, recording, or otherwise), without the prior permission of the publisher. Requests for permission should be directed to [email protected], or mailed to Permissions, Harvard Business School Publishing, 60 Harvard Way, Boston, Massachusetts 02163. Library of Congress Cataloging-in-Publication Data HBR guide to finance basics for managers. p. cm. — (Harvard business review guides) ISBN 978-1-4221-8730-2 (alk. paper) 1. Business enterprises—Finance. 2. Financial statements. I. Harvard business review. HG4026.H435 2012 658.15—dc23 2012026162

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What You’ll Learn

Where do you begin if your boss asks you to prepare a breakeven analysis? Can you tell the difference between an income statement and a balance sheet? Between gross margin and revenue? Do you understand why a business that’s profitable can still go belly-up? Has your grasp of your company’s numbers helped—or hurt—your career? If questions like these make you sweat, you’ve come to the right place. This guide will give you the tools and confidence you need to master finance basics, as all good managers must. You’ll learn how to: • Speak the language of finance • Compare your firm’s financials with rivals’ • Size up your vulnerability to industry downturns • Shift your unit’s focus from revenues to profits • Use financial data to defend budget requests • Avoid running out of cash—and going out of business

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What You’ll Learn

• Keep costs from killing your bottom line • Invest smartly through cost/benefit analysis • Sell your brilliant idea with ROI • Avoid putting too much faith in the numbers

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Contents

Section 1: FINANCE BASICS Don’t Be Afraid Finance Quiz

5

Do you know the basics?

The Key Financial Statements

9

Learn your way around a balance sheet, an income statement, and a cash flow statement.

The Fundamental Laws of Business

33

Get a grip on any company, regardless of size or location. BY DAVID STAUFFER

Section 2: MAKING GOOD DECISIONS— AND MOVING THOSE NUMBERS Using Statements to Measure Financial Health

43

Interpret what the numbers mean through ratio analysis.

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Contents

Grow Your Profits by Streamlining Your Business

57

Three ways to simplify for profitability BY JAMIE BONOMO AND ANDY PASTERNAK

Working Your Assets to Boost Your Growth

63

Focus your supply chain on customers’ needs—and increase your return on invested capital. BY MILES COOK, PRATAP MUKHARJI, LORENZ KIEFER, AND MARCO PETRUZZI

Profit ≠ Cash (and You Need Both)

73

Here’s why it’s critical to understand the difference—especially for a growing company. BY KAREN BERMAN AND JOE KNIGHT, WITH JOHN CASE

Why Cash Matters

83

It helps you see what’s going on now, where the business is headed, and what senior management’s priorities are likely to be. BY KAREN BERMAN AND JOE KNIGHT, WITH JOHN CASE

Your Balance Sheet Levers

87

Closely manage days sales outstanding and inventory—and have more cash at your disposal. BY KAREN BERMAN AND JOE KNIGHT, WITH JOHN CASE

What’s Your Working Capital Model? A Case Study

95

Lessons learned from Dow Jones, a business that transformed itself without going hat-inhand to investors BY JOHN MULLINS AND RANDY KOMISAR

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Contents

Learn to Speak the Language of ROI

105

Get your ideas and projects funded even when money is tight. BY JOHN O’LEARY

Practical Tools for Management Decisions

113

How to analyze costs and benefits, estimate ROI, calculate how quickly you’ll recoup an investment, and more

Section 3: THE LIMITS OF FINANCIAL DATA What the Financial Statements Don’t Tell You

127

Keep a sharp eye on nonfinancial data, too—and avoid the missteps of Merrill Lynch and BP. BY JOHN CASE

The Five Traps of Performance Measurement

139

What they are—and how to steer clear of them BY ANDREW LIKIERMAN

Finance Quiz

153

How much have you learned?

Glossary

159

Index

169

ix

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Section 1

Finance Basics: Don’t Be Afraid “What’s the ROI on that software your department wants to buy?” “The CFO says profits are great but money’s tight— everyone needs to conserve cash.” “I’ve been studying the figures, and it looks as if your sales reps are sacrificing gross margin for revenue. Have you talked to them about that?” “Our inventory days are creeping upward. We have to find a way to reverse that trend.” “I’m worried about our business. The financials suggest that corporate isn’t investing in our future as much as it used to.” Every corporate manager hears questions and comments like these—sometimes from a boss or a finance director,

1

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Finance Basics: Don’t Be Afraid

other times from colleagues in water-cooler conversations. Whatever the source, they all have one thing in common: They take for granted that you understand the fundamentals of finance. The people doing the talking presume that you speak the language, that you can read the financial statements, and that you can use basic financial tools to make decisions. But what if you’re not sure of the difference between an income statement and a balance sheet, or between profit and a positive cash flow? What if you can’t define inventory days or days sales outstanding, and you don’t know how to use those numbers to improve financial performance? If someone asks you to prepare a return on investment (ROI) analysis, do you get a sinking feeling in the pit of your stomach because you have no idea where to begin? Don’t despair. For one thing, you’re in good company. Financial trainers Karen Berman and Joe Knight reported in “Are Your People Financially Literate?” (HBR October 2009) that when their Los Angeles–based Business Literacy Institute administered a 21-question quiz on financial basics to a representative sample of American managers, the average score was only 38%—a failing grade in any classroom. (After you read this introduction, you’ll have a chance to quiz yourself with a short sample of similar questions.) At least those managers did better than the group of Fortune 500 officers and directors described in Andrew Ross Sorkin’s New York Times article “Back to School, But This One Is for Top Corporate Officials” (September 3, 2002).

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Finance Basics: Don’t Be Afraid

On another, equally basic, test of financial concepts, these executives scored an average of 32%. But there’s another reason not to feel too bad: You can easily remedy your situation. Reading this guide is a great start. The first section introduces you to the key terms and the three main financial statements. The next section shows you how to use some of the essential tools of finance. Learn these, and you’ll be able to make better decisions to improve your unit’s performance. The final section steps back from the numbers and emphasizes the importance of keeping your wits about you. Finance is partly science, to be sure, but it’s also partly an art—and when you apply its tools, you have to be sure you understand the context for what you’re doing. Why bother with all this? The reason is simple: Every business runs on financial data. If you don’t know the tools of finance, you can’t put that information to work. If you can’t even speak the language, you’ll be left out of the larger conversation about your company, and your career may suffer as a result. When you finish this guide, you’ll be well on your way to understanding and using the tools and the language. You’ll also be well positioned to take a couple of advanced courses, so to speak, by turning to sources that dig deeper into the subject. Do you worry that financial concepts will be too complex or that you won’t be able to do the math? Rest assured, learning the fundamentals of finance is not the same as studying to be a numbers pro. People typically go to school for at least a couple of years to become financial experts, and then they spend a lot of time picking up

3

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Finance Basics: Don’t Be Afraid

specialized knowledge on the job. This guide won’t give you all that—it’s just about the basics. And the math involved in using financial tools is relatively simple. Most of the time it’s no more complicated than the arithmetic you did in middle school; the stuff that’s a little trickier can easily be done on a computer or calculator. Ready to begin? Take the quiz on the following page. The answers are in the back of the guide, but don’t peek yet. Instead, take the quiz again (on page 153) after you have read through all the articles, and then compare your two scores. You should be pleased with what you have learned.

4

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Finance Quiz Do You Know the Basics?

This 10-question quiz isn’t designed to measure your entire financial IQ, but it will give you a sense of the fundamentals you should learn to become a more effective manager. When you finish reading the guide, you’ll have a chance to retake the quiz and compare your scores. If you don’t know an answer, just mark it “don’t know” rather than guessing. That will give you a clearer indication of your progress later. The questions here were developed with the help of the Business Literacy Institute, in Los Angeles. A more comprehensive financial IQ test is available for purchase at www.business-literacy.com.

1. The income statement measures: a. Profitability b. Assets and liabilities c. Cash d. All of the above

5

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Finance Basics: Don’t Be Afraid

2. A sale on credit ends up on the income statement as revenue and as what on the balance sheet? a. Accounts receivable b. Long-term assets c. Short-term liability d. Operating cash flow

3. What happens when a company is profitable but collection lags behind payments to vendors? a. The company is OK because profits always become cash b. The company stands a good chance of running out of money c. The company needs to shift its focus to EBIT d. The cash flow statement will show a negative bottom line

4. How is gross profit margin calculated? a. COGS/revenue b. Gross profit/net profit c. Gross profit/revenue d. Sales/gross profit

5. Which statement summarizes changes to parts of the balance sheet? a. Income statement b. Cash flow statement c. Neither of the above d. Both of the above

6

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Finance Quiz: Do You Know the Basics?

6. EBIT is an important measure in companies because: a. It is free cash flow b. It subtracts interest and taxes from net income to get a truer picture of the business c. It indicates the profitability of a company’s operations d. It is the key measure of earnings before indirect costs and transfers

7. Operating expenses include all of the following except: a. Advertising costs b. Administrative salaries c. Expensed research and development costs d. Delivery of raw materials

8. Owners’ equity in a company increases when the company: a. Increases its assets with debt b. Decreases its debt by paying off loans with company cash c. Increases its profit d. All of the above

9. A company has more cash today when: a. Customers pay their bills sooner b. Accounts receivable increases c. Profit increases d. Retained earnings increases

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Finance Basics: Don’t Be Afraid

10. Which of the following is not part of working capital? a. Accounts receivable b. Inventory c. Property, plant, and equipment d. All of the above are part of working capital

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The Key Financial Statements What does your company own, and what does it owe to others? What are its sources of revenue, and how has it spent its money? How much profit has it made? What is the state of its financial health? You can answer those questions by turning to the three main financial statements: the balance sheet, the income statement, and the cash flow statement. These are the essential documents of business. Executives use them to assess performance and identify areas for action. Shareholders look at them to keep tabs on how well their capital is being managed. Outside investors use them to identify opportunities. Lenders and suppliers routinely examine them to determine the creditworthiness of the companies with which they deal. Every manager, no matter where he or she sits in the organization, should have a solid grasp of the basic state-

Adapted from Harvard Business Essentials: Finance for Managers (product #5788BC), Harvard Business Review Press, 2002

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ments. All three follow the same general format from company to company, though specific line items may vary, depending on the nature of the business. If you can, get copies of your own company’s most recent financials so that you can compare them with the sample financials discussed here.

The Balance Sheet Companies prepare balance sheets to summarize their financial position at a given point in time, usually at the end of the month, the quarter, or the fiscal year. The balance sheet shows what the company owns (its assets), what it owes (its liabilities), and its book value, or net worth (also called owners’ equity, or shareholders’ equity). Assets comprise all the physical resources a company can put to work in the service of the business. This category includes cash and financial instruments (such as stocks and bonds), inventories of raw materials and finished goods, land, buildings, and equipment, plus the firm’s accounts receivable—funds owed by customers for goods or services purchased. Liabilities are debts to suppliers and other creditors. If a firm borrows money from a bank, that’s a liability. If it buys $1 million worth of parts—and hasn’t paid for those parts as of the date on the balance sheet—that $1 million is a liability. Funds owed to suppliers are known as accounts payable. Owners’ equity is what’s left after you subtract total liabilities from total assets. A company with $3 million in total assets and $2 million in liabilities has $1 million in owners’ equity.

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The Key Financial Statements

That definition gives rise to what is often called the fundamental accounting equation:

Assets – Liabilities = Owners’ Equity or Assets = Liabilities + Owners’ Equity The balance sheet shows assets on one side of the ledger, liabilities and owners’ equity on the other. It’s called a balance sheet because the two sides must always balance. Suppose, for example, a computer company acquires $1 million worth of motherboards from an electronic parts supplier, with payment due in 30 days. The purchase increases the company’s inventory assets by $1 million and its liabilities—in this case its accounts payable— by an equal amount. The equation stays in balance. Likewise, if the same company were to borrow $100,000 from a bank, the cash infusion would increase both its assets and its liabilities by $100,000. Now suppose that this company has $4 million in owners’ equity, and then $500,000 of uninsured assets burn up in a fire. Though its liabilities remain the same, its owners’ equity—what’s left after all claims against assets are satisfied—drops to $3.5 million. Notice how total assets equal total liabilities plus owners’ equity in the balance sheet of Amalgamated Hat Rack, an imaginary company whose finances we will consider throughout this chapter. The balance sheet (see page 14) describes not only how much the company has invested in assets but also what kinds of assets it owns, what portion comes from creditors (liabilities), and what portion comes from owners (equity). Analysis of the bal-

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Finance Basics: Don’t Be Afraid

ance sheet can give you an idea of how efficiently a company is utilizing its assets and managing its liabilities. Balance sheet data are most helpful when compared with the same information from one or more previous years. Amalgamated Hat Rack’s balance sheet shows assets, liabilities, and owners’ equity for December 31, 2010, and December 31, 2009. Compare the figures, and you’ll see that Amalgamated is moving in a positive direction: It has increased its owners’ equity by $397,500. Now let’s take a closer look at each section of the balance sheet.

Assets Listed first are current assets: cash on hand and marketable securities, receivables, and inventory. Generally, current assets can be converted into cash within one year. Next is a tally of fixed assets, which are harder to turn into cash. The biggest category of fixed assets is usually property, plant, and equipment; for some companies, it’s the only category. Since fixed assets other than land don’t last forever, the company must charge a portion of their cost against revenue over their estimated useful life. This is called depreciation, and the balance sheet shows the accumulated depreciation for all of the company’s fixed assets. Gross property, plant, and equipment minus accumulated depreciation equals the current book value of property, plant, and equipment. M&A can throw an additional asset category into the mix: If one company has purchased another for a price above the fair market value of its assets, the difference

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The Key Financial Statements

is known as goodwill, and it must be recorded. This is an accounting fiction, but goodwill often includes intangibles with real value, such as brand names, intellectual property, or the acquired company’s reputation.

Liabilities and owners’ equity Now let’s consider the claims against a company’s assets. The category current liabilities represents money owed to creditors and others that typically must be paid within a year. It includes short-term loans, accrued salaries, accrued income taxes, accounts payable, and the current year’s repayment obligation on a long-term loan. Longterm liabilities are usually bonds and mortgages—debts that the company is contractually obliged to repay over a period of time longer than a year. As explained earlier, subtracting total liabilities from total assets leaves owners’ equity. Owners’ equity includes retained earnings (net profits that accumulate on a company’s balance sheet after payment of dividends to shareholders) and contributed capital, or paid-in capital (capital received in exchange for shares). The balance sheet shows, in effect, how its assets were paid for—from borrowed money (liabilities), the capital of the owners, or both.

Historical Cost Balance sheet figures may not correspond to actual market values, except for items such as cash, accounts receivable, and accounts payable. This is because accountants must record most items at their historical cost. If, for example, a company’s balance sheet indicated land

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Finance Basics: Don’t Be Afraid

Amalgamated Hat Rack balance sheet as of December 31, 2010 and 2009   Increase (Decrease)

2010

2009

652,500

486,500

166,000

555,000 835,000 123,000

512,000 755,000 98,000

43,000 80,000 25,000

2,165,500

1,851,500

314,000

2,100,000

1,900,000

200,000

333,000

290,500

1,767,000

1,609,500

157,500

$ 3,932,500

3,461,000

471,500

450,000 98,000 17,000 435,000

430,000 77,000 9,000 500,000

20,000 21,000 8,000 (65,000)

1,000,000

1,016,000

(16,000)

750,000

660,000

90,000

Total liabilities

1,750,000

1,676,000

74,000

Contributed capital Retained earnings

900,000 1,282,500

850,000 935,000

50,000 347,500

Total owners’ equity

2,182,500

1,785,000

397,500

$ 3,932,500

$ 3,461,000

Assets

Cash and marketable securities Accounts receivable Inventory Prepaid expenses

$

Total current assets Gross property, plant, and equipment Less: accumulated depreciation Net property, plant, and equipment Total assets

(42,500)

Liabilities and owners’ equity

Accounts payable Accrued expenses Income tax payable Short-term debt Total current liabilities Long-term debt

Total liabilities and owners’ equity

$

$

471,500

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The Key Financial Statements

WHERE ARE THE HUMAN ASSETS? As people look to financial statements to gain insights about companies, many notice the traditional balance sheet’s inability to reflect the value and profit potential of human capital and other intangibles. (Remember that the intangibles included in goodwill appear only when one company acquires another, and that the figure represents only the acquiree’s intangibles at the time of purchase.) The absence of intangibles from the balance sheet is particularly significant for knowledgeintensive companies, whose skills, intellectual property, brand equity, and customer relationships may be their most productive assets. Indeed, a study several years ago by Baruch Lev of New York University found that 40% of the market valuation of the average company was missing from its balance sheet. For high-tech firms, the figure was over 50%. So managers and investors must look beyond the bricks and mortar, the equipment, and the cash that constitute balance sheet assets to determine the real value of a company.

worth $700,000, that figure would be what the company paid for the land way back when. If it was purchased in downtown San Francisco in 1960, you can bet that it is now worth immensely more than the value stated on the balance sheet. So why do accountants use historical instead of market values? The short answer is that it’s the lesser of two evils. If market values were required, then

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every public company would be required to get a professional appraisal of every one of its properties, warehouse inventories, and so forth, and would have to do so every year—a logistical nightmare.

How the Balance Sheet Relates to You Though the balance sheet is prepared by accountants, it’s filled with important information for nonfinancial managers. Later in this guide you’ll learn how to use balancesheet ratios in managing your own area. For the moment, let’s just look at a couple of ways in which balance-sheet figures indicate how efficiently a company is operating.

Working capital Subtracting current liabilities from current assets gives you the company’s net working capital, or the amount of money tied up in current operations. A quick calculation from its most recent balance sheet shows that Amalgamated had $1,165,500 in net working capital at the end of 2010. Financial managers give substantial attention to the level of working capital, which typically expands and contracts with the level of sales. Too little working capital can put a company in a bad position: It may be unable to pay its bills or take advantage of profitable opportunities. But too much working capital reduces profitability since that capital must be financed in some way, usually through interest-bearing loans. Inventory is a component of working capital that directly affects many nonfinancial managers. As with

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The Key Financial Statements

working capital in general, there’s a tension between having too much and too little. On the one hand, plenty of inventory solves business problems. The company can fill customer orders without delay, and the inventory provides a buffer against potential production stoppages or interruptions in the flow of raw materials or parts. On the other hand, every piece of inventory must be financed, and the market value of the inventory itself may decline while it sits on the shelf. The early years of the personal computer business provided a dramatic example of how excess inventory can wreck the bottom line. Some analysts estimated that the value of finished-goods inventory—computers that had already been built—melted away at a rate of approximately 2% per day, because of technical obsolescence in this fast-moving industry. Inventory meltdown really hammered Apple during the mid-1990s. Until the company could dramatically reduce its inventories through operational redesign, it had to dump its obsolete components and finished goods onto the market at huge discounts. By comparison, its rival, Dell, built computers to order—so it operated with no finished-goods inventory and with relatively small stocks of components. Dell’s success formula was an ultrafast supply chain and assembly system that enabled the company to build PCs to customers’ specifications. Finished Dell PCs didn’t end up on stockroom shelves for weeks at a time, but went directly from the assembly line into waiting delivery trucks. The profit lesson to managers in this kind of situation is clear: Shape your operations to minimize inventories.

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Financial leverage The use of borrowed money to acquire an asset is called financial leverage. People say that a company is highly leveraged when the percentage of debt on its balance sheet is high relative to the capital invested by the owners. (Operating leverage, in contrast, refers to the extent to which a company’s operating costs are fixed rather than variable. For example, a company that relies on heavy investments in machinery and very few workers to produce its goods has a high operating leverage.) Financial leverage can increase returns on an investment, but it also increases risk. For example, suppose that you paid $400,000 for an asset, using $100,000 of your own money and $300,000 in borrowed funds. For simplicity, we’ll ignore loan payments, taxes, and any cash flow you might get from the investment. Four years go by, and your asset has appreciated to $500,000. Now you decide to sell. After paying off the $300,000 loan, you end up with $200,000 in your pocket—your original $100,000 plus a $100,000 profit. That’s a gain of 100% on your personal capital, even though the asset increased in value by only 25%. Financial leverage made this possible. If you had financed the purchase entirely with your own funds ($400,000), you would have ended up with only a 25% gain. In the United States and most other countries, tax policy makes financial leverage even more attractive by allowing businesses to treat the interest paid on loans as a deductible business expense.

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The Key Financial Statements

But leverage can cut both ways. If the value of an asset drops, or if it fails to produce the anticipated level of revenue, then leverage works against the asset’s owner. Consider what would have happened in our example if the asset’s value had dropped by $100,000—that is, to $300,000. The owner would still have to repay the initial loan of $300,000 and would have nothing left over. The entire $100,000 investment would have disappeared.

Financial structure of the firm The negative potential of financial leverage is what keeps CEOs, their financial executives, and board members from maximizing their companies’ debt financing. Instead, they seek a financial structure that creates a realistic balance between debt and equity on the balance sheet. Although leverage enhances a company’s potential profitability as long as things go right, managers know that every dollar of debt increases risk, both because of the danger just cited and because high debt entails high interest costs, which must be paid in good times and bad. Many companies have failed when business reversals or recessions reduced their ability to make timely payments on their loans. When creditors and investors examine corporate balance sheets, therefore, they look carefully at the debtto-equity ratio. They factor the riskiness of the balance sheet into the interest they charge on loans and the return they demand from a company’s bonds. A highly leveraged company, for example, may have to pay two or three times the interest rate paid by a less leveraged com-

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petitor. Investors also demand a higher rate of return for their stock investments in highly leveraged companies. They will not accept high risks without expecting commensurately large returns.

The Income Statement Unlike the balance sheet, which is a snapshot of a company’s position at one point in time, the income statement shows cumulative business results within a defined time frame, such as a quarter or a year. It tells you whether the company is making a profit or a loss—that is, whether it has positive or negative net income (net earnings)—and how much. This is why the income statement is often referred to as the profit-and-loss statement, or P&L. The income statement also tells you the company’s revenues and expenses during the time period it covers. Knowing the revenues and the profit enables you to determine the company’s profit margin. As we did with the balance sheet, we can represent the contents of the income statement with a simple equation:

Revenues – Expenses = Net Income An income statement starts with the company’s sales, or revenues. This is primarily the value of the goods or services delivered to customers, but you may have revenues from other sources as well. Note that revenues in most cases are not the same as cash. If a company delivers $1 million worth of goods in December 2010 and sends out an invoice at the end of the month, for example, that $1 million in sales counts as revenue for the year 2010 even though the customer hasn’t yet paid the bill.

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The Key Financial Statements

Various expenses—the costs of making and storing a company’s goods, administrative costs, depreciation of plant and equipment, interest expense, and taxes—are then deducted from revenues. The bottom line—what’s left over—is the net income (or net profit, or net earnings) for the period covered by the statement. Let’s look at the various line items on the income statement for Amalgamated Hat Rack (see below). The cost of goods sold, or COGS, represents the direct costs of manufacturing hat racks. This figure covers raw materials, such as lumber, and everything needed to turn those materials into finished goods, such as labor. Subtracting cost of goods sold from revenues gives us Amalgamated’s gross profit—an important measure of a company’s financial performance. In 2010, gross profit was $1,600,000.

Amalgamated Hat Rack income statement For the period ending December 31, 2010 Retail sales Corporate sales

$2,200,000 1,000,000

Total sales revenue

3,200,000

Less: Cost of goods sold

1,600,000

Gross profit

1,600,000

Less: Operating expenses

800,000

Less: Depreciation expenses

42,500

Earnings before interest and taxes

757,500

Less: Interest expense

110,000

Earnings before income taxes

647,500

Less: Income taxes

300,000

Net income

$ 347,500

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Finance Basics: Don’t Be Afraid

The next major category of cost is operating expenses, which include the salaries of administrative employees, office rents, sales and marketing costs, and other costs not directly related to making a product or delivering a service. Depreciation appears on the income statement as an expense, even though it involves no out-of-pocket payment. As described earlier, it’s a way of allocating the cost of an asset over the asset’s estimated useful life. A truck, for example, might be expected to last five years. The company wouldn’t count the full cost of the truck as an expense on the income statement in the first year; it would depreciate that amount over the full five years. Subtracting operating expenses and depreciation from gross profit gives you a company’s operating earnings, or operating profit. This is often called earnings before interest and taxes, or EBIT, as it is on Amalgamated’s statement. The last expenses on the income statement are typically taxes and any interest due on loans. If you get a positive net profit figure after subtracting all expenses, as Amalgamated does, your company is profitable.

Multiyear Comparisons As with the balance sheet, comparing income statements over a period of years reveals much more than examining a single income statement. You can spot trends, turnarounds, and recurring problems. Many companies’ annual reports show data going back five or more years. In Amalgamated’s multiperiod income statement (see page 25), you can see that annual retail sales have grown

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The Key Financial Statements

steadily, while corporate sales have declined slightly. Operating expenses have stayed about the same, however, even as total sales have expanded. That’s a good sign that management is holding the line on the cost of doing business. Interest expense has also declined, perhaps because the company has paid off one of its loans. The bottom line, net income, shows healthy growth.

How the Income Statement Relates to You Of the three main financial statements, the income statement generally has the greatest bearing on a manager’s job. That’s because most managers are responsible in some way for one or more of its elements:

Generating revenue In one sense, nearly everyone in a company helps generate revenue—the people who design and produce the goods or deliver the service, those who deal directly with customers, and so on—but it’s the primary responsibility of the sales and marketing departments. If same-store or same-product revenues rise faster than the competition’s, you can reasonably assume that the folks in sales and marketing are doing a good job. It’s critical that managers in these departments understand the income statement so that they can balance costs against revenue. If sales reps give too many discounts, for instance, they may reduce the company’s gross profit. If marketers spend too much money in pursuit of new customers, they will eat into operating profit. It’s the manager’s job to track these numbers as well as revenue itself.

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Managing budgets Running a department means working within the confines of a budget. If you oversee a unit in information technology or human resources, for example, you may have little influence on revenue, but you will surely be expected to watch your costs closely—and all those costs will affect the income statement. Staff departments’ expenses usually show up in the operating expenses line. If you invest in any capital equipment—a complex piece of software, say—you will also add to the depreciation line. Close study of your company’s income statements over time reveals opportunities as well as constraints. Suppose you would like to get permission to hire one or two more people. If operating expense as a percentage of sales has been trending downward, you will have a stronger case than if it has been trending upward.

Managing a P&L Many managers have P&L responsibility, which means they are accountable for an entire chunk of the income statement. This is probably the case if you’re running a business unit, a store, a plant, or a branch office, or if you’re overseeing a product line. The income statement you are accountable for isn’t quite the same as the whole company’s. For instance, it is unlikely to include interest expense and other overhead items, except as an “allocation” at the end of the year. Even so, your job is to manage revenue generation and costs so that your unit or product line contributes as much profit to the company as pos-

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The Key Financial Statements

Amalgamated Hat Rack multiperiod income statement For the period ending December 31, 

2010

2009

2008

$2,200,000 1,000,000

2,000,000 1,000,000

1,720,000 1,100,000

Total sales revenue

3,200,000

3,000,000

2,820,000

Less: Cost of goods sold

1,600,000

1,550,000

1,400,000

Gross profit

1,600,000

1,450,000

1,420,000

800,000

810,000

812,000

Less: Depreciation expenses

42,500

44,500

45,500

Earnings before interest and taxes

757,500

595,500

562,500

Less: Interest expense

110,000

110,000

150,000

Earnings before income taxes

647,500

485,500

412,500

Less: Income taxes

300,000

194,200

165,000

Net income

$ 347,500

291,300

247,500

Retail sales Corporate sales

Less: Operating expenses

sible. For that you need to understand and track revenue, cost of goods sold, and operating expenses.

The Cash Flow Statement The cash flow statement is the least used—and least understood—of the three essential statements. It shows in broad categories how a company acquired and spent its cash during a given span of time. As you’d expect, expenditures show up on the statement as negative figures, and sources of income figures are positive. The bottom line in each category is simply the net total of inflows and outflows, and it can be either positive or negative.

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The statement has three major categories: Operating activities, or operations, refers to cash generated by, and used in, a company’s ordinary business operations. It includes everything that doesn’t explicitly fall into the other two categories. Investing activities covers cash spent on capital equipment and other investments (outgoing), and cash realized from the sale of such investments (incoming). Financing activities refers to cash used to reduce debt, buy back stock, or pay dividends

Amalgamated Hat Rack cash flow statement for the year ending December 31, 2010 Net income Operating activities Accounts receivable Inventory Prepaid expenses Accounts payable Accrued expenses Income tax payable Depreciation expense

$347,500 (43,000) (80,000) (25,000) 20,000 21,000 8,000 42,500

Total changes in operating assets and liabilities

(56,500)

Cash flow from operations

291,000

Investing activities Sale of property, plant, and equipment Capital expenditures

267,000* (467,000)

Cash flow from investing activities

(200,000)

Financing activities Short-term debt decrease Long-term borrowing Capital stock Cash dividends to stockholders Cash flow from financing activities Increase in cash during year

(65,000) 90,000 50,000 — 75,000 $ 166,000

* Assumes sale price was at book value; the company had yet to start depreciating this asset.

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(outgoing), and cash from loans or from stock sales (incoming). Again using the Amalgamated Hat Rack example, we see that in 2010 the company generated a total positive cash flow (increase in cash) of $166,000. This is the sum of cash flows from operations ($291,000), investing activities (minus $200,000), and financing ($75,000). The cash flow statement shows the relationship between net profit, from the income statement, and the actual change in cash that appears in the company’s bank accounts. In accounting language, it “reconciles” profit and cash through a series of adjustments to net profit. Some of these adjustments are simple. Depreciation, for instance, is a noncash expense, so you have to add depreciation to net profit if what you’re interested in is the change in cash. Other adjustments are harder to grasp, though the arithmetic isn’t difficult. If a company’s accounts receivable are lower at the end of 2010 than they were at the end of 2009, for example, it took in “extra” cash from operations, so we would add that to net profit as well. Let’s look at each category on Amalgamated’s cash flow statement for 2010. • Operating activities. Net income—$347,500— appears at the top. That’s the figure we want to adjust, and it comes straight from the bottom line of the income statement. Accounts receivable, inventory, prepaid expenses, accounts payable, accrued expenses, and income tax payable are all calculated from the balance sheets for 2010 and

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2009. The figure appearing on the cash flow statement for each line item represents the difference between the two balance sheets. Again, these are all adjustments that will help translate net income into cash. As mentioned, depreciation is a noncash expense, so it’s added in. Then all the pluses and minuses are calculated to get net cash from operations. • Investing activities. Amalgamated sold fixed assets—property, plant, and equipment—worth $267,000 in 2010. For simplicity’s sake we’re assuming that it had not yet begun to depreciate those assets. It also invested $467,000 in new fixed assets. • Financing activities. Amalgamated decreased its short-term debt by $65,000, increased its longterm debt by $90,000, and sold $50,000 in stock to investors. It paid its shareholders no dividends in 2010; if it had, the amount would have shown up under financing activities. • Change in cash. As noted above, the change in cash is just the total of all three categories. It corresponds exactly to the difference in the cash line items on the balance sheets for 2010 and 2009. The cash flow statement is useful because it indicates whether your company is successfully turning its profits into cash—and that ability is ultimately what will keep the company solvent, or able to pay bills as they come due.

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How the Cash Flow Statement Relates to You If you’re a manager in a large corporation, changes in your employer’s cash flow won’t typically have an impact on your day-to-day job. Nevertheless, it’s a good idea to stay up to date with your company’s cash situation, because it may affect your budget for the upcoming year. When cash is tight, you will probably want to be conservative in your planning. When it’s plentiful, you may have an opportunity to propose a bigger budget. Note that a company can be quite profitable and still be short of cash as a result of making a lot of new investments, for example, or having trouble collecting receivables. You may also have some influence over the items that affect the cash flow statement. Are you responsible for inventory? Keep in mind that every addition there requires a cash expenditure. Are you in sales? A sale isn’t really a sale until it is paid for—so watch your receivables. There’s more on tools for managing cash later in this guide.

Where to Find the Financials Every company with shares traded in U.S. public financial markets must prepare and distribute its financial statements in an annual report to shareholders. Annual reports usually go beyond the basic disclosure requirement of the Securities and Exchange Commission and include discussion of the year’s operations and the future outlook. Most public companies also issue quarterly reports. If you are looking for even more material on your company, or on one of your competitors, obtain a copy of its

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annual Form 10-K. The 10-K often contains abundant and revealing information about a company’s strategy, its view of the market and its customers, its products, its important risks and business challenges, and so forth. You can get 10-K reports and annual and quarterly reports directly from a company’s investor relations department or online at www.sec.gov/edgar/searchedgar/ webusers.htm. Private, or closely held, companies are not required by law to share full financial statements with anybody, though prospective investors and lenders naturally expect to see all three statements. And many companies share the financials with their managers. If you work for a closely held company and have not seen its financials, ask someone in finance whether you are allowed to see them.

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SUMMING UP The balance sheet, income statement, and cash flow statement offer three perspectives on a company’s financial performance. They tell three different but related stories about how well your company is doing financially: • The balance sheet shows a company’s financial position at a specific point in time. It provides a snapshot of its assets, liabilities, and equity on a given day. • The income statement shows the bottom line. It indicates how much profit or loss was generated over a period of time—usually a month, a quarter, or a year. • The cash flow statement tells where the company’s cash came from and where it went. It shows the relationship between net profit and the change in cash recorded from one balance sheet to the next. Together, these financial statements can help you understand what is going on in your company—or in any other business.

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The Fundamental Laws of Business by David Stauffer

Why was a publisher willing to pay General Electric chairman Jack Welch an eye-popping $7 million advance for a book about his career? According to Dallas-based management consultant Ram Charan, author of What the CEO Wants You to Know and several other books, the answer has a lot to do with Welch’s ability to distill complexities—to think and talk about his sprawling global conglomerate as if it were a simple street-corner shop. An understanding of a few financial measures coupled with an enterprise-wide perspective, Charan maintains, can help you get a grip on any company, regardless of its size or location. “When you come right down to it,” he says, “business is very simple. There are universal laws of

Adapted from Harvard Management Update (product #U0104A), April 2001

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business that apply whether you sell fruit from a stand or are running a Fortune 500 company.”

Understand the Measures of Moneymaking Business acumen, writes Charan, is “the ability to understand the building blocks of how a one-person operation or a very big business makes money.” Problems arise when managers don’t have a precise understanding of what “making money” means. Three measures can give you a good picture of whether and how a company is making money: growth, cash generation, and return on assets.

Growth Growth in sales is usually—but not always—a positive sign. A $16 million injection-molding company, writes Charan, “rewarded its sales representatives based on how many dollars’ worth of plastic caps they sold, regardless of whether the company made a profit on the caps. Everyone was excited when the company landed $4 million in new sales from two major customers. But in the following three years, as sales rose, profit margins sank.” The lesson here: “Growth for its own sake doesn’t do any good. Growth has to be profitable and sustainable.”

Cash generation Cash is “a company’s oxygen supply,” writes Charan; it “gives you the ability to stay in business.” Even if your company is growing its revenues profitably and getting a respectable return on its assets, a cash shortage—or a declining cash flow—spells trouble. “Cash generation is

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BIG-PICTURE PERSPECTIVE Consultant Ram Charan, author of What the CEO Wants You to Know, urges you to “get a total picture” by answering the following questions: • What were your company’s sales during the last year? Are sales growing, declining, or flat? • What is the profit margin? Is it growing, declining, or flat? • How does your margin compare with those of competitors? With those of other industries? • Do you know your company’s inventory velocity? Its asset velocity? • What is its return on assets? • Is cash generation increasing or decreasing? Why? • Is your company gaining or losing against the competition?

the difference between all the cash that flows into the business and all the cash that flows out of the business in a given time period,” Charan explains. Since most companies extend and receive credit, net cash flow and profit are seldom the same thing. Cash from operations depends largely on two factors: accounts receiv-

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able (money owed by customers) and accounts payable (money owed to suppliers). Charan recommends continually investigating where the cash is being generated, how it’s being used, and whether enough is coming in. If there’s not enough, of course, you’ll want to find out the reasons.

Return on assets (ROA) A company’s ROA is its net profit divided by the average value of its assets during a given period of time. This measure, usually expressed as a percentage, shows you how well your company is using its assets—including cash, receivables, inventory, buildings, vehicles, and machinery—to make money. ROA gives managers a glimpse of the often-missing third element of a triad called SEA: sales, expenses, and assets. “Below the senior management level,” explains Chuck Kremer, a financial trainer and coauthor of Managing by the Numbers, “many decision makers see only their part of the income statement,” which doesn’t deal with assets. Yet all employees, whether they realize it or not, are involved in managing some portion of the firm’s assets. Many people equate managing assets with watching gross profit (total sales minus all costs directly associated with creating the company’s products or services). That’s only half the challenge, says Charan. The other measure that needs to be monitored simultaneously is velocity— how fast a particular asset moves “through a business to a customer.” In times of intense price competition, for example, companies often see their gross margins shrink. Increas-

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ing asset velocity helps protect the ROA of a company in that situation, because you’re doing more with fewer assets. This is the strategy that made Dell Computer so successful in the 1990s. By outsourcing much of its components manufacturing, Dell essentially became an assembler, Charan points out: Each computer was configured to meet an individual customer’s specifications and delivered in less than a week. Dell cut costs by reducing inventory and increasing its inventory turns—the number of times in a year that its inventory turned over—to a level far higher than most manufacturers’. “The problem with managers missing the ‘A,’ or assets part [of SEA], isn’t usually apparent in good times,” Kremer says. “It’s when things are slowing down that ROA makes all the difference. And it’s the companies like GE that emphasize the ‘A’ continuously—so that their people are always managing the receivables, the fixed assets, and the inventories—that thrive in good times and bad.”

Think Like an Owner By understanding growth, cash generation, and ROA, managers can counteract the common tendency to think and act within one’s “silo” (department or unit). “None of us denies that we’re members of a team comprising every department,” Kremer says. “But how can I best contribute to the team if I don’t understand how my actions in marketing impact engineering or production?” Tracking these financial measures helps expand managers’ thinking in three ways, says Charan: “First, we’re able to think of the business as a whole. Second, we see the linkages between our unit and the business as a whole.

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Third, we’re better able to grasp what’s happening in the outside world—such as an economic slowdown—and relate that to the company and even to our own area.” A big-picture understanding of basic financial measures has very practical benefits, says Thomas Kroeger, the executive vice president in charge of organization and people at Office Depot. “The main benefit is that it helps us cut through the clutter,” he says, noting that Office Depot’s fast growth necessarily created layers and distance between the CEO and store managers. Kroeger describes a telling incident that occurred during a meeting of district store managers, who had suggested that each store hire a customer greeter. At the individual store level, this didn’t represent a huge financial commitment. But when the managers took a step back, they realized that their idea would cost $25 million annually to execute. “They were dumbfounded,” Kroeger recalls. “But they’d experienced a critical shift, from the perspective of store manager to store owner.” At Alcoa Packaging Machinery in Englewood, Colorado, a financial-literacy initiative helped foster an owner’s perspective among all employees. “Workers in each of about 10 manufacturing cells make the decisions that affect them,” explains machinists’ union representative Garry Harper. Should we work this Saturday? Should we buy the new tooling we need this month? The company’s big picture gets factored into the decision making around such questions. What’s more, all employees receive monthly updates on key financial measures of companywide performance at cell briefings and via the company’s intranet. “Every cell also gets its own monthly

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P&L statement,” Harper adds. “I can assure you that every employee knows or has access to how well his or her cell is contributing to overall company performance.” Growth, cash generation, and return on assets—these concepts, along with a focus on customers, form the nucleus from which everything else about a business emanates, says Charan.

David Stauffer heads the corporate writing firm Stauffer Bury, in Red Lodge, Montana.

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Section 2

Making Good Decisions—and Moving Those Numbers Part of your job as a manager is to help your company reach its financial goals—in other words, to help move the key numbers in the right direction. You should now have a good idea of what those numbers are. The income statement shows revenue, the various costs and expenses, subtotals such as gross profit and operating profit, and of course the bottom line—net profit. The balance sheet shows assets and liabilities, including accounts receivable and accounts payable. The cash flow statement shows how well the company is turning its profits into cash and what it’s doing with that cash. All three statements reflect the daily actions of managers and employees throughout the organization. The company will be financially healthy

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if and only if those individuals make and execute good decisions every day. The articles in this section of the guide will help you do that. They’ll enable you to see more of what the financials are telling you, where the levers and pressure points are, and what you can do to make those key numbers move. You’ll learn how to help boost profits, how to use assets (such as equipment, inventory, and cash) more efficiently, how to improve your company’s cash flow, and how to analyze potential investments. You’ll have a better understanding of the relationship between your responsibilities and your company’s financial results. If you’re a savvy manager, you always pay careful attention to the operations you oversee and to the people on your team. But you can’t forget that you and your coworkers are ultimately responsible for your company’s financial health—and that you must watch the numbers as closely as you watch everything else.

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Using Statements to Measure Financial Health By themselves, financial statements tell you quite a bit: how much profit the company made, where it spent its money, how large its debts are. But how do you interpret all the numbers these statements provide? For example, is the company’s profit large or small? Is the level of debt healthy or not? Ratio analysis allows you to dig into the information contained in the three financial statements. A financial ratio is just two key numbers expressed in relation to each other. Using ratios, you can compare your company’s performance to that of its competitors, to industry averages, and to its own performance in the past. The ratios that follow are among the most common, and are used in many different industries.

Adapted from Pocket Mentor: Understanding Finance (product #13197), Harvard Business Review Press, 2007

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Profitability Ratios These measures gauge a company’s profitability—its profits as a percentage of various other numbers. They’ll help you determine whether your company’s profits are healthy or anemic, and whether they’re moving in the right direction. • Return on assets (ROA). ROA indicates how well a company is using its assets to generate profit. It’s a good measure for comparing companies of different sizes. To calculate it, just divide net income by total assets. For example, look back at the financials of Amalgamated Hat Rack in “The Key Financial Statements,” in the opening section of this guide. The income statement shows net income of $347,500 for 2010, and the balance sheet shows total assets of $3,932,500 for December 31 of that year. Do the arithmetic, and you find that Amalgamated’s ROA is 8.8%. • Return on equity (ROE). ROE shows profit as a percentage of shareholders’ equity. In effect, it’s the owners’ return on their investment—and you can bet that shareholders will be comparing it to what they could earn with alternative investments. To calculate ROE, divide net income by owners’ equity. For Amalgamated, it’s $347,500 divided by $2,182,500, or 15.9%. • Return on sales (ROS). Also known as net profit margin, ROS measures how well a company is controlling its costs and turning revenue into

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bottom-line profit. To calculate ROS, divide net income by revenue. Amalgamated’s ROS for 2010 is 10.9%, or $347,500 divided by $3,200,000. For 2009, the calculation is $291,300 divided by $3,000,000, or 9.7%. So Amalgamated’s ROS is growing—a very good sign. • Gross profit margin. Gross profit margin shows how efficiently a company produces its goods or delivers its services, taking only direct costs into account. To calculate gross profit margin, divide gross profit by revenue. Amalgamated made $1,600,000 in gross profit in 2010; divide that by $3,200,000, and you get exactly 50%. That’s a couple of percentage points higher than the previous year’s gross profit margin—also a good sign. • Earnings before interest and taxes (EBIT) margin. Many analysts use this measure, also known as operating margin, to see how profitable a company’s overall operations are, without regard to how they are financed or what taxes the company may be liable for. To calculate it, just divide EBIT by revenue. Amalgamated’s EBIT for 2010 was $757,500. Divide that by revenue, and you get 23.7%. (For an exercise, check to see whether its EBIT margin improved since 2009.)

Operating Ratios Operating ratios help you assess a company’s level of efficiency—in particular, how well it is putting its assets to work and managing its cash.

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• Asset turnover. This ratio shows how efficiently a company uses all of its assets—cash, machinery, and so on—to generate revenue. It answers the question, How many dollars of revenue do we bring in for each dollar of assets? To calculate asset turnover, divide revenue by total assets. In general, the higher the number, the better—but note that you can raise the ratio either by generating more revenue with the same assets or by decreasing the asset base of your business, perhaps by lowering average receivables. • Receivable days. This measure, also known as days sales outstanding (DSO), tells you how quickly a company collects funds owed by customers. A company that takes an average of 45 days to collect its receivables will need significantly more working capital than one that takes 25 days. There are a couple of different ways to calculate DSO. One common method is to divide ending accounts receivable—accounts receivable on the last day of the month or year—by revenue per day during the period just ended. • Days payable. This measure, also called days payable outstanding (DPO), tells you how quickly a company pays its suppliers. The longer it takes, other things being equal, the more cash a company has to work with. Of course, you have to balance the advantages of more cash in your bank account against your suppliers’ need to be paid—stretch DPO out too long, and you may find that suppli-

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ers don’t want to do business with you. The most common way to calculate DPO is to divide ending accounts payable by cost of goods sold per day. • Days in inventory (DII). This shows how quickly a company sells its inventory during a given period of time. The longer it takes, the longer the company’s cash is tied up and the greater the likelihood that the inventory will not sell at full value. To calculate DII, or inventory days, divide average inventory by cost of goods sold per day.

Liquidity Ratios Liquidity ratios tell you about a company’s ability to meet short-term financial obligations such as debt payments, payroll, and accounts payable. • Current ratio. This ratio measures a company’s current assets against its current liabilities. To calculate it, divide total current assets by total current liabilities. A ratio that is close to 1 is too low: It shows that current assets are barely sufficient to cover short-term obligations. (A ratio of less than 1 is a sign of immediate trouble.) A ratio significantly higher than industry averages may indicate that the company is too “fat”—in other words, that it’s holding a lot of cash that it’s not putting to work or returning to shareholders in the form of dividends. • Quick ratio. This ratio isn’t faster to compute than any other—it simply measures a company’s abil-

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ity to meet its current obligations quickly. It thus ignores inventory, which can be hard to liquidate. (And if you do have to liquidate inventory quickly, you typically get less for it than you would otherwise.) This ratio is sometimes called the acid test, because if it is less than 1 the company may be unable to pay its bills. To calculate the quick ratio, divide current assets minus inventory by current liabilities.

Leverage Ratios Leverage ratios tell you to what extent a company is using debt to pay for its operations and how easily it can cover the cost of that debt. • Interest coverage. This ratio assesses the margin of safety on a company’s debt—in other words, how its profit compares to its interest payments during a given period. To calculate interest coverage, divide earnings before interest and taxes by interest expense. For Amalgamated Hat Rack, it’s $757,500 divided by $110,000, or 6.9. Bankers and other lenders look at this ratio closely; nobody likes to lend money to a company if its profits aren’t substantially higher than its interest obligations. • Debt to equity. This measure shows the extent to which a company is using borrowed money to enhance the return on owners’ equity. Investors and lenders scrutinize the ratio to determine whether a

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company is too highly leveraged (usually compared to industry averages)—or whether, in contrast, management has been too conservative and isn’t using enough debt to generate profits. To calculate it, divide total liabilities by owners’ equity. Amalgamated’s debt-to-equity ratio? It’s $1,750,000 divided by $2,182,500, or 0.80.

How Ratio Analysis Relates to You Ratios shine a powerful light on three potential areas of concern: • Liquidity. The current and quick ratios can tell you whether a company will be able to pay its bills. If it can’t easily do so, it’s likely to cut costs abruptly. It may even need to restructure its operations. • Competitive advantages or disadvantages. Comparing a company’s ratios to those of competitors and to industry averages often reveals specific financial strengths and weaknesses. If your firm’s debt-to-equity ratio is higher than average, for example, the company may be particularly vulnerable to a downturn in the industry. If its EBIT margin is higher than competitors’, it may be more efficient than others in its operating processes. • Performance trends. If ROS is shrinking, say—if costs are growing relative to sales—senior executives will probably begin looking for cuts. They’ll ask managers to tighten their budgets, maybe even to delay hiring where possible. A growing ROA

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or ROS, by contrast, may put the senior team in a more expansive mood. That’s the best time to consider asking for a more generous budget, a new position in your department, or a new piece of capital equipment. It’s important to understand which ratios you can influence and to talk with your team about how to have the right impact. For instance:

Profitability ratios Most line managers are directly responsible for controlling costs in their areas. By staying under budget, for example, you can help your company’s ROS. There may be other ways to improve profitability as well. If you’re in engineering or product development, can you come up with new product ideas that will generate additional revenue at healthy margins? If you’re in sales, are you watching the gross profit on what you and your team sell as well as your overall sales volume? If you’re in marketing, can you figure out ways to get more bang from every marketing dollar? These are the kinds of efforts that make a bottomline difference.

Operating ratios Line managers influence operating ratios in a number of ways. Sales managers, for example, always have to make certain that their reps aren’t selling to too many customers that are poor credit risks. They may need to work with their reps and the credit department to keep receivable days down to an appropriate level. Plant managers and

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everyone else responsible for inventory must watch inventory days relative to competitors’ and to industry averages. Inventory that’s higher than necessary requires more working capital, and the finance department is likely to come around asking why DII is so high.

Liquidity and leverage ratios These ratios are mostly the responsibility of the finance department, so line managers have less influence on them. But all the other moves discussed here—generating more revenue, watching costs and profit margins, collecting on receivables, keeping inventory (and thus working capital) to a minimum—will ultimately have a positive impact on your company’s liquidity and leverage ratios.

Other Financial Assessments Other ways of evaluating a company’s financial health include valuation, Economic Value Added (EVA), and productivity assessments. Like the ratios described above, all these measures are most meaningful when compared with the same ones from earlier time periods or with those for other companies in a particular industry.

Valuation Valuation often refers to the process of determining the total value of a company for the purpose of selling it. This is an uncertain science. For example, a company considering an acquisition might estimate the prospective acquiree’s future cash flows and then calculate its value accordingly. Another would-be acquirer might rely on

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TIPS ON ANALYZING FINANCIAL STATEMENTS • Compare companies to determine the context. What looks like a big (or small) number may not be once you understand what’s typical for a similar-sized business in the same industry. For instance, the oil company ConocoPhillips earned close to $5 billion in 2010, which sounds like a lot of money. But the company’s ROS was only 3.5%, compared with 6.4% for Chevron, which recorded only moderately higher revenue. • Watch for trends. How have the statements changed since last year? From three years ago? Say you notice a marked increase in the level of receivables from one year to the next. To see whether it’s “really” rising, calculate receivable days. If that’s going up, too, then the company isn’t doing as good a job at collecting its cash as it did in the past. That may be a deliberate

different data, such as the value of the acquiree’s physical assets. Regardless of the method used, a company may be worth different amounts to different parties. A small high-tech firm, for instance, may be valued well beyond what its cash flow or assets would suggest if the potential acquirer wants its unique technology or engineering talent. Valuation also refers to the process by which Wall Street investors and analysts scrutinize financial statements and stock performance to arrive at an estimate 52

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strategy of buying market share, or it may simply reflect poor management of receivables. • Translate the numbers into prose. Use your company’s statements to write a paragraph describing how much profit it is making, how well it is managing its assets, where the money comes from, and where it goes. If you worked for Amalgamated Hat Rack, for instance, you might begin with, “We’ve done a pretty good job at increasing revenue over the years, and we’ve done a very good job of controlling our costs, particularly in 2010. That has helped boost our operating profit and our net profit as well.” If you can put what you see on the statements into everyday language, you’ll be able to use what the statements are telling you to make smart decisions.

of a company’s value. They’re interested in determining whether the market price of a share of stock is a good deal relative to the underlying value of the piece of the company that the share represents. Wall Street uses various means of valuation—that is, of assessing a company’s financial health in relation to its stock price: • Earnings per share (EPS) equals net income divided by the number of shares outstanding. This is one 53

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of the most commonly watched financial indicators. If it falls, it will most likely take the stock’s price down with it. • Price-to-earnings ratio (P/E) is the current price of a share of stock divided by the previous 12 months’ earnings per share. It is a common measure of how cheap or expensive a share is relative to the company’s earnings (and relative to other companies’ shares). • Growth indicators are also important in Wall Street’s valuations, because growth allows a company to provide increasing returns to its shareholders. The number of years over which you should measure growth depends on the industry’s business cycles. For an oil company, a one-year growth figure probably wouldn’t tell you much, because of the industry’s long cycles. For an internet company, however, a year is a long time. Typical measures include sales growth, profitability growth, and growth in earnings per share.

Economic Value Added This concept encourages employees and managers to think like shareholders and owners by focusing on the net value a company creates. EVA is the profit remaining after the company has accounted for the cost of its capital. If profit is less than the cost of capital—that is, if EVA is negative—the company is essentially destroying value.

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Productivity measures Sales per employee and net income per employee link revenue and profit-generation information to workforce data. Trend lines in these numbers help you see whether a company is becoming more or less productive over time.

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Grow Your Profits by Streamlining Your Business by Jamie Bonomo and Andy Pasternak

Managers today are under intense pressure to deliver revenue growth. But as they and their teams respond to this challenge, they may unwittingly introduce complexity that drags down overall profitability. People in design, sales, and marketing, for example, are driven to introduce new products, acquire new customers, and enter new markets—and they often add offerings, channels, brands, and customers one at a time without regard to the cumulative impact on the business. What is this cumulative impact? As a business becomes more complex, it gets difficult to trace costs to their origins. So senior managers struggle to figure out

Adapted from Harvard Management Update (product #U0505A), May 2005

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which offerings and markets are profitable. They have a hard time deciding what to sell, at what price, and to whom. Digging into the costs of individual products, brands, channels, and customers helps managers at all levels in a company better understand each link in the value chain. That knowledge will help leaders as they refine strategy and others as they execute it. Consider the following ways companies can simplify to increase profitability:

1. Analyze profitability by offering or market Large, complex companies often lack consistent information and systems across their many businesses and geographies. Moreover, shared costs—those that cannot be directly attributed to individual offerings or markets— represent a large portion of their total cost structure. But you can determine true costs by digging into the details. Profitability analysis of this sort will typically reveal large profit disparities among lines of business, brands, products, and customers. At a consumer products company we’ll call Consolidated, Inc., for instance, managers viewed a longtime large account, MacGuffin, as one of its two most important customers in a particular region. However, the prices MacGuffin paid were low, and the complexity of serving the account was staggering, given the nearly 30 product stock-keeping units (SKUs) developed specifically for this customer. Consolidated used four manufacturing facilities to produce the SKUs and operated a “mixing center” to aggregate orders across plants, primarily for MacGuffin. Those costs had not been attributed to Mac-

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Guffin but rather were spread across all accounts in the region. When managers analyzed the true cost of serving MacGuffin, from the sales front end to the operations back end, they realized the account lowered the bottom line by $700,000 even though it generated $5 million in annual sales. To lower costs and add value, Consolidated reduced MacGuffin’s SKU count by 60%, repriced certain products, and restructured supply terms. As this example shows, decisions about product selection and pricing should not be made on the margin—that is, you shouldn’t assume that the cost of infrastructure is fixed and existing excess capacity is essentially free. While appealing in the short term, this approach may accommodate unprofitable offerings.

2. Make sure your brands and SKUs are pulling their weight Most complex companies have many brands or SKUs that contribute little to the bottom line. A detailed analysis by one U.S. computer maker showed managers that many of its low-volume products had only modest customer reach, low revenues, and low profits—yet those offerings added considerable complexity to the manufacturer’s operations. Indeed, the company had been using up to 20% of its assets to support these marginal brands and products. By targeting profitable brands and SKUs and cutting the rest loose, it freed up significant capacity with negligible loss of revenue and volume. This was not a purely operations-driven effort, however. The company also incorporated customers’ perspectives. Through rigorous research that blended survey and

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QUESTIONS FOR MANAGERS • Do you know which of your customers, brands, and product lines bring in profits? Do you know which ones lose money? • If a new and highly profitable opportunity came along and your company did not have enough capacity to address it, what would it do? • Do support functions such as R&D, sales, and marketing set their own agendas, or do they collaborate closely with other groups across the enterprise? • Are performance metrics designed to optimize overall profitability?

testing tools from psychology and economics, the computer maker estimated demand for its various brands and SKUs and learned exactly how and why customers chose those products. With the data in hand, managers could evaluate which trade-offs in volume, pricing, and systemwide costs would help profitability.

3. Consolidate production Another way to simplify is to improve the mix of low-cost and high-cost production capacity. Eliminating or cutting back on a single account to reduce indirect costs is just the first step. If a company streamlines a sufficiently large number of accounts, it can consolidate facilities and

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close the highest-cost production lines or service centers. The resulting efficiencies will give managers more leeway in negotiating pricing, and will help them end relationships with accounts that still perform poorly. This approach can dramatically boost profitability through operating-margin improvements and focus resources on accounts with high growth potential.

Transforming a revenue culture into a profit culture is no small task. All functions—from sales to marketing to operations—must join in the effort. But once your firm’s processes and metrics are based on an integrated perspective, you’ll be one step closer to a simpler and more profitable business.

Jamie Bonomo is a managing director, and Andy Pasternak is a director, of New York–based Mercer Management Consulting.

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Working Your Assets to Boost Your Growth by Miles Cook, Pratap Mukharji, Lorenz Kiefer, and Marco Petruzzi

Supply chains can account for a staggering 80% of an organization’s costs. And at product companies, up to 60% of net assets go toward inventory, plants, warehouses, and other supply chain assets. Yet companies seldom look at supply chain improvements as a way to boost return on invested capital, or ROIC. Calculating ROIC can be a little complex, but here’s how it’s usually done:

Earnings – Interest Expense (with an Adjustment for the Tax Benefit of Interest Costs) Total Assets – Cash – Non-interest-bearing Current Liabilities Adapted from Harvard Management Update (product #P0503B), March 2005

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Companies most often focus on growing ROIC by building up the numerator: earnings. But shrinking the less-obvious denominator by accelerating asset turns— achieving the same or better results with fewer assets— can also have a huge impact. In our experience, introducing effective customer-centric supply chain management techniques can improve ROIC by an average of nearly 30%. And as a bonus, companies that trim down assets also significantly outgrow their competitors in revenue.

Embedding Supply Chain Math in Customer-Focused Decisions Firms looking to boost ROIC can use supply chain economics to answer three key questions involving customers:

1. What do we sell? Can we streamline stockkeeping units (SKUs) and eliminate complexity, costs, and assets? For instance, perhaps we can cut some low-volume or unprofitable products and reduce the number of available options on others. That will make our plants more efficient and allow us to reduce inventory. 2. To whom do we sell? Do we have the right marketplace focus? In other words, are we aiming our supply chain capabilities where they can make money for the company? An analysis of profitability by customer, region, and channel may turn up some areas that are relatively (or even absolutely) unprofitable.

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3. How can we best deliver our offerings? Are our infrastructure and service policies doing the job efficiently? We typically bundle our most complex products with an extended warranty and maintenance agreement. But is that the best deal for our customers—and does it help our bottom line? Since their jobs begin and end with the customer, supply chain leaders are increasingly focusing on customer segmentation. A better understanding of what users want creates a better understanding of which products will satisfy them. Supply chain leaders can then establish different service levels for different customers and products. Dow Corning, for instance, had originally tried to differentiate its silicone-based products by bundling them with a lot of value-added services, such as technical support. But as Bain & Company consultants Mark Gottfredson and Steve Schaubert point out in their book The Breakthrough Imperative (Collins, 2008), some of Dow’s customers didn’t need these services and didn’t want to pay for them. In response, Dow introduced a standard product line that could be ordered over the internet, without any application or engineering services included. It also began to offer its value-added services on an à la carte basis, so that customers could buy only what they needed. Supply chain leaders typically vary their forecasting and demand planning for products depending on volumes, production requirements, and lead times. They’re

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Making Good Decisions—and Moving Those Numbers

IMPROVING GROWTH BY “FIXING THE DENOMINATOR” A great example of a company that used supply chain improvements to boost growth is Groupe Danone, the French food conglomerate. During a turbulent period several years ago, it lost its leadership position in yogurt sales in Brazil. Nestlé had eclipsed Danone in market share, and Danone—also under attack by Parmalat—had stopped making money. The company needed to do something fast. Conventional wisdom held that Danone couldn’t match the two giants in operational efficiency, given their vast scale advantages. The two competitors also had wider distribution networks and more power within the trade. Danone initially concluded that the only way out was to compete on quality and innovation, not the easiest thing to do in a basic food category. Yet a streamlined supply chain saved the day. Above all else, Danone’s executives realized, people wanted fresher yogurt: They didn’t like buying anything that was approaching its sell-by date. Indeed, when the company surveyed consumers, about half said they based their buying decisions on expiration dates. To figure out how to give them exactly what they wanted, Danone answered the three key customerfocused questions driving supply chain math and concluded that it could improve how it got products into customers’ hands. For one thing, volumes weren’t

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always tied to demand: To reduce production costs, manufacturing had been told it could produce only full vats of yogurt for any SKU, which led to waste. For another, Danone uncovered problems in how its product moved from the factory to retail outlets. Inventory was scattered over multiple locations across the country, yet 80% of its yogurt sales took place within a half-day travel radius of its central warehouse—meaning that a large percentage of its product was making an unnecessary second stop in a regional facility. Such logistics resulted in less-than-fresh yogurt and stockouts where demand was high. Moreover, rigid maintenance and clean-up schedules added downtime that created more deviation between store-ordered volumes and the amount of yogurt actually produced. So Danone’s team redesigned its Brazilian distribution network to serve the majority of its store customers, turning three regional warehouses into transit points without inventory. It created new rules for production, allowing manufacturing to make partial vats of yogurt when needed. The company moved most of the supply chain responsibility under a centralized logistics organization that had more oversight over the forecasting process. The result? The average number of days from factory to store fell by more than half, to four. (continued)

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Making Good Decisions—and Moving Those Numbers

(continued) By fixing the denominator on ROIC, Danone liberated its numerator. There was no change other than increased freshness, but consumers responded dramatically, increasing Danone’s revenue by more than 10%, as well as boosting the company’s return on sales.

also constantly weeding out inefficiencies rooted in silobased thinking. In other words, they manage the link between supply chain decisions and manufacturing operations effectively, so that their companies concentrate on items that serve their target market with the least possible complexity. In the mid-1990s, for instance, the vehicle and engine maker Navistar introduced its Diamond Spec program, through which buyers of certain trucks could choose among 16 preengineered modules rather than the thousands of possible configurations that had been available. Soon thereafter, say Gottfredson and Schaubert, Diamond Spec “accounted for 80 percent of dealer orders for that class of truck”—and Navistar’s costs were significantly lower.

How Goodyear’s Customer Focus Improved Sales Consider the supply chain situation at Goodyear Tire & Rubber Company several years ago. As a new chairman

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and chief executive took the reins, the company’s North American Tire (NAT) operations were sliding toward a significant loss. Poorly targeted attempts to reduce inventories had led to declining service levels and frequent stockouts. Customers were complaining, and the company faced a clutter of obsolescent and unprofitable inventory in its warehouses. To raise the stakes even higher, Goodyear was preparing to launch two products it hoped would be blockbusters: its Assurance passenger-car tire and its redesigned commercial steer tire, aimed at curtailing Michelin’s threat in the market for outfitting trucks. How could Goodyear turn things around and strengthen sales? With a new president on board, NAT’s management reexamined a full set of assumptions around “What do we sell?” and “To whom?” NAT created a team comprising sales, marketing, manufacturing, and finance that was given a broad charter for identifying and beginning to fix structural problems that ate up cash and working capital, and for starting to optimize customer service. When the team took a clear-eyed look at what NAT sold and why, it saw, at the core of Goodyear’s culture, a manufacturing-based mind-set focused chiefly on driving down unit costs, insufficiently balanced by considerations of downstream supply chain needs and customer requirements. The team cleaned house, reducing overall stocks 15% from seasonal highs and eliminating 50% of the company’s unprofitable SKUs. And it reduced complexity: One streamlining initiative consolidated lowvolume products from more than a dozen warehouses around the United States to one central place.

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Making Good Decisions—and Moving Those Numbers

NAT also examined its service and delivery practices for product and customer segments. New guidelines allowed for expediting high-volume products (such as the company’s Eagle performance tires) in lower quantities but stipulated batching low-volume, seasonal products (such as farm tires) and delivering them with longer lead times. Such practices started to align Goodyear’s product profitability with the service requirements of different customer segments. Improving supply chain performance demanded new discipline in sales forecasting. By sharing reliable data for demand planning in a joint sales and operations planning process, NAT developed a more realistic set of sales forecasts. NAT also fine-tuned its manufacturing schedule to parse monthly quotas to weeks and days required for given shipments, which reduced the need for safety stocks. Such moves helped NAT “attack the denominator”— and as the changes took effect, customers noticed and appreciated improvements in the company’s fill rates. Goodyear substantially reduced working capital tied up in inventory and freed up cash for other initiatives. As forecasting and other processes improved, the company reduced fluctuations in inventory, reducing peakto-trough variance from 5.3 million units to 1.4 million just three years later. As it launched its new lines of tires, Goodyear balanced efforts to meet demand and control internal costs far better than it had in the past, even though the popularity of some tires required establishing dealer quotas based on their “fair share” of the market. How did the supply chain math add up? After implementing the changes, Goodyear reported profits of

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Working Your Assets to Boost Your Growth

$36.5 million on sales of $4.7 billion, versus a net loss of $119.4 million on sales of $3.9 billion for the same period in the previous year. Better earnings combined with faster asset turns also boosted ROIC. The company attributed the financial improvements and profitable growth to better operating results in all business segments, including North American Tire.

Of course, applying supply chain science has organizational implications. Chief among these is the challenge of capturing the right statistics to accurately measure progress and eliminate hunch work. This also means tracking the performance metrics of vendors, logistics partners, and distributors—and sharing appropriate forecasts and other sensitive data. Few companies do these things well. Such focus has less to do with new IT systems than it does with people. Companies should assign star players—and give them the proper incentives—to tackle the supply chain challenge. They should reward these executives not just for having enough stock on hand but also for increasing asset turns, growth, and share price.

Based in Atlanta, Miles Cook and Pratap Mukharji are Bain & Company partners who lead the firm’s Global Supply Chain practice. Lorenz Kiefer, a partner in Düsseldorf, leads Bain’s European Supply Chain practice. Marco

Petruzzi is a partner based in Los Angeles.

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Profit ≠ Cash (and You Need Both) by Karen Berman and Joe Knight, with John Case

Profit, shown on the income statement, is not the same as net cash, shown on the cash flow statement. Why should this be? Some reasons are pretty obvious: Cash may be coming in from loans or from investors, and that isn’t going to show up on the income statement at all. But even operating cash flow is not at all the same as net profit. There are three essential reasons: • Revenue is booked at sale. A sale is recorded whenever a company delivers a product or service. Ace Printing Company delivers $1,000 worth of brochures to a customer; Ace Printing Company reAdapted from Financial Intelligence (product #4989BC), by Karen Berman and Joe Knight, with John Case, Harvard Business Review Press, 2006

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cords revenue of $1,000, and theoretically it could record a profit based on subtracting its costs and expenses from that revenue. But no cash has changed hands because Ace’s customer typically has 30 days or more to pay. Since profit starts with revenue, it always reflects customers’ promises to pay. Cash flow, by contrast, always reflects cash transactions. • Expenses are matched to revenue. The purpose of the income statement is to tote up all the costs and expenses associated with generating revenue during a given time period. However, those expenses may not be the ones that were actually paid during that time period. Some may have been paid earlier. Some will be paid later, when vendors’ bills come due. So the expenses on the income statement do not reflect cash going out. The cash flow statement, however, always measures cash in and out the door during a particular time period. • Capital expenditures don’t count against profit. A capital expenditure doesn’t appear on the income statement when it occurs; only the depreciation is charged against revenue. So a company can buy trucks, machinery, computers, and so on, and the expense will appear on the income statement only gradually, over the useful life of each item. Cash, of course, is another story: All those items are often paid for long before they have been fully depreciated, and the cash used to pay for them will be reflected in the cash flow statement.

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Profit ≠ Cash (and You Need Both)

You may be thinking that in the long run cash flow will pretty much track net profit. Accounts receivable will be collected, so sales will turn into cash. Accounts payable will be paid, so expenses will more or less even out from one time period to the next. And capital expenditures will be depreciated, so over time the charges against revenue from depreciation will more or less equal the cash being spent on new assets. All this is true to a degree, at least for a mature, well-managed company. But the difference between profit and cash can create all sorts of mischief in the meantime, especially for a growing company. Entrepreneurial businesses in particular may face periods of fluctuating sales. They may have to cope with the fact that one big customer pays its bills very slowly—or that one important vendor requires payment up front. All these can wreak havoc on an entrepreneur’s cash flow, even if they don’t much affect profitability.

Profit Without Cash We’ll illustrate the difference between profit and cash by comparing two simple companies with dramatically different profit and cash positions. Sweet Dreams Bakery is a new cookies-and-cakes manufacturer that supplies specialty grocery stores. The founder has lined up orders based on her unique home-style recipes, and she’s ready to launch on January 1. We’ll assume she has $10,000 cash in the bank, and we’ll also assume that in the first three months her sales are $20,000, $30,000, and $45,000. Cost of goods sold is 60% of sales, and her monthly operating expenses are $10,000.

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Just by eyeballing those numbers, you can see she’ll soon be making a profit. In fact, a simplified income statement for the first three months looks like this: January

February

March

$20,000

$30,000

$45,000

12,000

18,000

27,000

8,000

12,000

18,000

Expenses

10,000

10,000

10,000

Net profit

($ 2,000)

$ 2,000

$ 8,000

Sales COGS Gross profit

The cash flow, however, tells a different story. Sweet Dreams Bakery has an agreement with its vendors to pay for the ingredients and other supplies it buys in 30 days. But those specialty grocery stores that the company sells to? They’re kind of precarious, and they take 60 days to pay their bills. So here’s what happens to Sweet Dreams’ cash situation: • In January, Sweet Dreams collects nothing from its customers. At the end of the month, all it has is $20,000 in receivables from its sales. Luckily, it does not have to pay anything out for the ingredients it uses, since its vendors expect to be paid in 30 days. (We’ll assume that the COGS figure is all for ingredients, because the owner herself does all the baking.) But the company does have to pay expenses—rent, utilities, and so on. So all the initial $10,000 in cash goes out the door to pay expenses, and Sweet Dreams is left with no cash in

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the bank. A simplified representation of the company’s checkbook would look like this: Beginning cash

$10,000

Expenses

(10,000)

Ending cash

$0

• In February, Sweet Dreams still hasn’t collected anything. (Remember, its customers pay in 60 days.) At the end of the month, it has $50,000 in receivables—January’s $20,000 plus February’s $30,000—but still no cash. Meanwhile, Sweet Dreams now has to pay for the ingredients and supplies for January ($12,000), and it has another month’s worth of expenses ($10,000). So it’s now in the hole by $22,000. Here’s the checkbook (assuming for the moment that Sweet Dreams can show a negative balance in its bank account!): Beginning cash

$0

Ingredients and supplies

(12,000)

Expenses

(10,000)

Ending cash

($22,000)

Can the owner turn this around? Surely, in March those rising profits will improve the cash picture! Alas, no. • In March, Sweet Dreams finally collects on its January sales, so it has $20,000 in cash coming in the door, leaving it only $2,000 short against its end-of-February cash position. But now it has to pay for February’s COGS of $18,000 plus March’s

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expenses of $10,000. So at the end of March, it ends up $30,000 in the hole—a worse position than at the end of February. Again, the checkbook: Beginning cash

($22,000)

Collections

20,000

Ingredients and supplies

(18,000)

Expenses

(10,000)

Ending cash

($30,000)

What’s going on here? The answer is that Sweet Dreams is growing. Its sales increase every month, meaning that it must pay more each month for its ingredients. Eventually, its operating expenses will increase as well because the owner will have to hire more people. The other problem is the disparity between the fact that Sweet Dreams must pay its vendors in 30 days while waiting 60 days for receipts from its customers. In effect, it has to front the cash for 30 days—and as long as sales are increasing, it will never be able to catch up unless it finds additional sources of cash. As fictional and oversimplified as Sweet Dreams may be, this is precisely how profitable companies go out of business. It is one reason why so many small entrepreneurial companies fail in their first year. They simply run out of cash.

Cash Without Profit But now let’s look at another sort of profit/cash disparity. Fine Cigar Shops is a start-up that sells very expensive cigars, and it’s located in a part of town frequented by businesspeople and well-to-do tourists. Its sales for the first three months are $50,000, $75,000, and $95,000—

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again, a healthy growth trend. Its cost of goods is 70% of sales, and its monthly operating expenses are $30,000 (high rent!). For the sake of comparison, we’ll say that it, too, begins the period with $10,000 in the bank. So Fine Cigar’s income statement for these months looks like this: January February Sales

March

$50,000

$75,000

$95,000

COGS

35,000

52,500

66,500

Gross profit

15,000

22,500

28,500

Expenses

30,000

30,000

30,000

Net profit

($15,000)

($ 7,500)

($ 1,500)

Fine Cigar hasn’t yet turned the corner on profitability, though it is losing less money each month. Meanwhile, what does its cash picture look like? As a retailer, of course, Fine Cigar collects the money on each sale immediately. And we’ll assume that it was able to negotiate good terms with its vendors, paying them in 60 days. • In January, it begins with $10,000 and adds $50,000 in cash sales. It doesn’t have to pay for cost of goods sold yet, so the only cash out the door is that $30,000 in expenses. End-of-the-month bank balance: $30,000. Here’s a simplified representation of the company’s checkbook: Beginning cash

$10,000

Cash sales

50,000

Expenses

(30,000)

Ending cash

$30,000

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• In February, Fine Cigar adds $75,000 in cash sales and still doesn’t pay anything for cost of goods sold. So the month’s net cash after the $30,000 in expenses is $45,000. Now the bank balance is $75,000! The checkbook: Beginning cash

$30,000

Cash sales

75,000

Expenses

(30,000)

Ending cash

$75,000

• In March, Fine Cigar adds $95,000 in cash sales and pays for January’s supplies ($35,000) and March’s expenses ($30,000). Net cash in for the month is $30,000, and the bank balance is now $105,000. Here’s the checkbook: Beginning cash Cash sales

$75,000 95,000

Payment of invoices

(35,000)

Expenses

(30,000)

Ending cash

$105,000

Cash-based businesses—retailers, restaurants, and so on—can thus get an equally skewed picture of their situation. In this case Fine Cigar’s bank balance is climbing every month even though the company is unprofitable. That’s fine for a while, and it will continue to be fine so long as the company holds down expenses so that it can turn the corner on profitability. But the owner has to be careful: If he’s lulled into thinking that his business is doing great and that he can increase those expenses, he’s

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liable to continue on the unprofitable path. If he fails to attain profitability, eventually he will run out of cash. Fine Cigar, too, has its real-world parallels. Every cash-based business, from tiny Main Street shops to giants such as Amazon.com and Dell, has the luxury of taking the customer’s money before it must pay for its costs and expenses. It enjoys the float—and if it is growing, that float will grow ever larger. But ultimately, the company must be profitable by the standards of the income statement; cash flow in the long run is no protection against unprofitability. In the cigar-store example, the losses on the books will eventually lead to negative cash flow; just as profits eventually lead to cash, losses eventually use up cash. It’s the timing of those cash flows that we are trying to understand here. Understanding the difference between profit and cash is a key to increasing your financial intelligence. It opens a whole new window of opportunity to make smart decisions. For example: • Finding the right kind of expertise. The two situations described above require different skills. If a company is profitable but short on cash, then it needs financial expertise—someone capable of lining up additional financing. If a company has cash but is unprofitable, it needs operational expertise, someone capable of bringing down costs or generating additional revenue without adding costs. So financial statements tell you not only what is going on in the company but also what kind of expertise you need to hire.

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• Making good decisions about timing. Informed decisions on when to take an action can increase a company’s effectiveness. Take Setpoint Systems, a company that builds factory-automation systems, as an example. Managers at the company know that the first quarter of the year, when many orders come in, is the most profitable for the business. But cash is always tight because Setpoint must pay out cash to buy components and pay contractors. The next quarter, Setpoint’s cash flow typically improves because receivables from the prior quarter are collected, but profits slow down. Setpoint managers have learned that it’s better to buy capital equipment for the business in the second quarter rather than the first, even though the second quarter is traditionally less profitable, just because there’s more cash available to pay for it. The ultimate lesson here is that profit and cash are different—and a healthy business, both in its early years and as it matures, requires both.

Karen Berman and Joe Knight are the owners of the Los Angeles–based Business Literacy Institute. Coauthor John Case has written several popular books on management.

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Why Cash Matters by Karen Berman and Joe Knight, with John Case

There are three big reasons for understanding the cash flow statement. First, it will help you see what is going on now, where the business is headed, and what senior management’s priorities are likely to be. You need to know not just whether the overall cash position is healthy but specifically where the cash is coming from. Is much of it coming from regular business operations, rather than from lenders or investors? That’s a good thing—it means the business itself is generating cash. Is investing cash flow a sizable negative number? If it isn’t, that may mean the company isn’t investing in its future. And what about financing cash flow? If investment money is coming in, that may be reason for optimism—or it may mean that

Adapted from Financial Intelligence (product #4986BC), by Karen Berman and Joe Knight, with John Case, Harvard Business Review Press, 2006

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the company is desperately selling stock to stay afloat. Looking at the cash flow statement generates a lot of questions, but they are the right ones to be asking. Are we paying off loans? Why or why not? Are we buying equipment? The answers to those questions will reveal a lot about senior management’s plans for the company. Second, you affect cash. Most managers focus on profit when they should be focusing on both profit and cash. Of course, their impact is usually limited to operating cash flow—but that’s one of the most important measures there is. For instance: • Accounts receivable. Factors such as customers’ satisfaction with your service, their relationship to your salespeople, and the accuracy of your invoices all help determine how customers feel about your company, and indirectly influence how fast they are likely to pay their bills. Disgruntled customers are not known for prompt payments—they like to wait until any dispute is resolved. • Inventory. If you’re in engineering, do you request special products all the time? If you do, you may be creating an inventory nightmare. If you’re in operations and you like to have lots in stock, just in case, you may be creating a situation in which cash is just sitting on the shelves, when it could be used for something else. • Expenses. Do you defer expenses when you can? Do you consider the timing of cash flow when making purchases? Obviously, we’re not saying it’s

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Why Cash Matters

always wise to defer expenses; it’s just wise to take into account what the cash impact will be when you do decide to spend money. • Giving credit. Do you give credit to potential customers too easily? Alternatively, do you withhold credit when you should give it? Both decisions affect the company’s cash flow and sales, which is why the credit department always has to strike a careful balance. The list goes on. Maybe you’re a plant manager, and you are always recommending buying more equipment, just in case the orders come in. Perhaps you’re in IT, and you feel that the company always needs the latest upgrades to its computer systems. All these decisions affect cash flow, and senior management usually understands that very well. If you want to make an effective request, you need to familiarize yourself with the numbers that they’re looking at. Third, managers who understand cash flow tend to be given more responsibilities, and thus tend to advance more quickly, than those who focus purely on the income statement. You could go to someone in finance and say, “I notice our DSO [days sales outstanding] has been heading in the wrong direction over the last few months—how can I help turn that around?” Alternatively, you might learn the precepts of lean enterprise, which focuses on (among other things) keeping inventories to a minimum. A manager who leads a company in converting to lean thereby frees up huge quantities of cash.

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Our general point here is that cash flow is a key indicator of a company’s financial health, along with profitability and shareholders’ equity. It’s the final link in the triad.

Karen Berman and Joe Knight are the owners of the Los Angeles–based Business Literacy Institute. Coauthor John Case has written several popular books on management.

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Your Balance Sheet Levers by Karen Berman and Joe Knight, with John Case

Most companies use their cash to finance customers’ purchase of products or services. That’s the “accounts receivable” line on the balance sheet—the amount of money customers owe at a given point in time, based on the value of what they have purchased before that date. The key ratio that measures accounts receivable is days sales outstanding, or DSO—that is, the average number of days it takes to collect on these receivables. The longer a company’s DSO, the more working capital is required to run the business. Customers have more of its cash in the form of products or services not yet paid for, so that cash isn’t available to buy inventory, deliver more

Adapted from Financial Intelligence (product #4977BC), by Karen Berman and Joe Knight, with John Case, Harvard Business Review Press, 2006

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services, and so on. Conversely, the shorter a company’s DSO, the less working capital is required to run the business. It follows that the more people understand DSO and work to bring it down, the more cash the company will have at its disposal.

Managing DSO The first step in managing DSO is to understand what it is and in which direction it has been heading. If it’s higher than it ought to be, and particularly if it’s trending upward (which it nearly always seems to be), managers need to begin asking questions. Operations and R&D managers, for example, must ask themselves whether there are any problems with the products that might make customers less willing to pay their bills. Is the company selling what customers want and expect? Is there a problem with delivery? Quality problems and late deliveries often provoke late payment, just because customers are not pleased with the products they’re receiving and decide that they will take their own sweet time about payment. Managers in quality assurance, market research, product development, and so on thus have an effect on receivables, as do managers in production and shipping. In a service company, people who are out delivering the service need to ask themselves the same questions. If service customers aren’t satisfied with what they’re getting, they too will take their time about paying. Customer-facing managers—those in sales and customer service—have to ask a similar set of questions. Are

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Your Balance Sheet Levers

our customers financially healthy? What is the standard in their industry for paying bills? Are they in a region of the world that pays quickly or slowly? Salespeople typically have the first contact with a customer, so it is up to them to flag any concerns about the customer’s financial health. Once the sale is made, customer-service reps need to pick up the ball and learn what’s going on. What’s happening at the customer’s shop? Are they working overtime? Laying people off? Meanwhile, salespeople need to work with the folks in credit and customer service so that everybody understands the terms up front and will notice when a customer is late. At one company we worked with, the delivery people knew the most about customers’ situations because they were at their facilities every day. They would alert sales and accounting if there seemed to be issues cropping up in a customer’s business. Credit managers need to ask whether the terms offered are good for the company and whether they fit the credit histories of the customers. They need to make judgments about whether the company is giving credit too easily or whether it is too tough in its credit policies. There’s always a trade-off between increasing sales on the one hand and issuing credit to poorer credit risks on the other. Credit managers need to set the precise terms they’re willing to offer. Is net 30 days satisfactory—or should we allow net 60? They need to determine strategies such as offering discounts for early pay. For example, “2/10 net 30” means that customers get a discount of 2% if they pay their bill in 10 days and no discount if they wait 30 days. Sometimes a 1% or 2% discount can help

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a struggling company collect its receivables and thereby lower its DSO—but of course it does so by eating into profitability. We know of a small company that has a simple, homegrown approach to the issue of giving credit to customers. It has identified the traits it wants in its customers and has even named its ideal customer Bob. Bob’s qualities include the following: • He works for a large company. • His company is known for paying its bills on time. • He can maintain and understand the product provided (this company makes complex technologyintensive products). • He is looking for an ongoing relationship. If a new customer meets these criteria, he will get credit from this small manufacturer. Otherwise he won’t. As a result of this policy, the company has been able to keep its DSO quite low and to grow without additional equity investment. All these decisions can have a huge impact on accounts receivable and thus working capital. Reducing DSO even by one day can save a large company millions of dollars per day.

Managing Inventory Many managers (and consultants!) these days are focusing on inventory. They work to reduce it wherever possible. They use buzzwords such as lean manufacturing,

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just-in-time inventory management, and economic order quantity (EOQ). The reason for all this attention is exactly what we’re talking about here. Managing inventory efficiently reduces working capital requirements by freeing up large amounts of cash. The challenge is to reduce inventory to a minimum level while still ensuring that every raw material and every part will be available when needed and every product will be ready for sale when a customer wants it. A manufacturer needs to be constantly ordering raw material, making things, and holding them for delivery to customers. Wholesalers and retailers need to replenish their stocks regularly to avoid the dreaded stockout—an item that isn’t available when a customer wants it. Yet every item in inventory can be regarded as frozen cash, which is to say cash that the company cannot use for other purposes. Exactly how much inventory is required to satisfy customers while minimizing that frozen cash? Well, that’s the million-dollar question (and the reason for all those consultants). Many different kinds of managers affect a company’s use of inventory—which means that all these managers can help reduce working capital requirements. For example: • Salespeople love to tell customers they can have exactly what they want. (“Have it your way,” as the old Burger King jingle put it.) Custom paint job? No problem. Bells and whistles? No problem. But every variation requires a little more inventory, meaning a little more cash. Obviously, customers

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must be satisfied. But that commonsense requirement has to be balanced against the fact that inventory costs money. The more that salespeople can sell standard products with limited variations, the less inventory their company will have to carry. • Engineers love those same bells and whistles. In fact, they’re constantly working to improve the company’s products, replacing version 2.54 with version 2.55 and so on. Again, this is a laudable business objective, but one that has to be balanced against inventory requirements. A proliferation of product versions puts a burden on inventory management. When a product line is kept simple with a few easily interchangeable options, inventory declines and inventory management becomes a less taxing task. • Production departments greatly affect inventory. For instance, what’s the percentage of machine downtime? Frequent breakdowns require the company to carry more work-in-process inventory and more finished-goods inventory. And what’s the average time between changeovers? Decisions about how much to build of a particular part have an enormous impact on inventory requirements. Even the layout of a plant affects inventory: A well-designed production flow in an efficient plant minimizes the need for inventory. Along these lines, it’s worth noting that many U.S. plants eat up tremendous amounts of working capital.

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When business is slow, they nevertheless keep on churning out product in order to maintain factory efficiency. Plant managers focus on keeping unit costs down, often because that goal has been pounded into their heads for so long that they no longer question it. They have been trained to do it, told to do it, and paid (with bonuses) for achieving it. When business is good, that goal makes perfect sense: Keeping unit costs down is simply a way of managing all the costs of production in an efficient manner. (This is the old approach of focusing only on the income statement, which is fine as far as it goes.) When demand is slow, however, the plant manager must consider the company’s cash as well as its unit costs. A plant that continues to turn out product in these circumstances is just creating more inventory that will take up space on a shelf. Coming to work and reading a book might be better than building product that is not ready to be sold. Any large company can save millions of dollars in cash, and thereby reduce working capital requirements, just by making modest improvements in its inventory management.

Karen Berman and Joe Knight are the owners of the Los Angeles–based Business Literacy Institute. Coauthor John Case has written several popular books on management.

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What’s Your Working Capital Model? A Case Study by John Mullins and Randy Komisar

Imagine a working capital model where your customers pay you before your product or service is even produced, not to mention delivered. A good idea, right? Consider the subscription-based periodical publishing industry. From the bare-bones Kiplinger Letter (a subscriptionbased personal finance newsletter) to the complex workings of the New York Times, companies in the periodicals industry historically have had negative working capital. Why is this? Periodicals publishers—whether they publish newsletters, newspapers, or magazines—tend to

Excerpted from Getting to Plan B: Breaking Through to a Better Business Model (product #5371BC), by John Mullins and Randy Komisar, Harvard Business Review Press, 2009

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have almost no inventory, just some paper and ink. As soon as they print the current edition, out it goes. On the other hand, subscription fees are collected long before the publication is printed and shipped. That’s good news if you want to drive working capital down. For the publisher, the cash the subscriber pays up front is what accountants call a liability (unearned subscriptions or deferred revenues, as they are often called on publishers’ financial statements), since the publisher now “owes” the upcoming issues to the subscriber. The result of all this: modest current assets (limited mostly to accounts receivable from advertising not yet paid), large current liabilities (the issues due for the rest of the year, for example), and negative working capital. Dow Jones & Company (Dow Jones)—known best for its newspaper, the Wall Street Journal, and its stock market index, the Dow Jones Industrial Average—is a case in point for negative working capital. Its business was based on this working capital model for more than a century. Then along came the digital revolution. Was it time for Plan B? Let’s start at the beginning. Founded in New York City in 1882 by Charles Henry Dow, Edward Davis Jones, and Charles Milford Bergstresser, print media was Dow Jones’s bread and butter. The company started off producing daily, handwritten news bulletins called flimsies, delivered by messengers to subscribers in the Wall Street area of Manhattan. In 1883 the company started publishing the Customers’ Afternoon Letter, which six years later became the Wall Street Journal. The four-page Journal

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What’s Your Working Capital Model? A Case Study

could be purchased for 2 cents a copy. Advertising was sold for 20 cents per line. In 1902, Clarence Barron, who was one of Dow Jones’s first employees, purchased Dow, Jones & Company for $130,000. He added a weekly financial publication, Barron’s, in 1921. Decades later, in the 1970s, Dow Jones diversified, purchasing a number of local newspapers, increasing its circulation and reach and lessening its reliance on the financial markets. But in the late 1980s, with the advent of digital media like the now-ubiquitous Bloomberg terminals that have sprouted on nearly every desk in the financial world, the Wall Street Journal started losing subscribers. Circulation dropped from a high of 2.11 million in 1983 to 1.95 million by 1989. Profits deteriorated. The publishing world was changing, the Internet had arrived, and electronic publishing became Dow Jones’s Plan B. But moving from print to digital was no trivial task. That it believed it could do so was a huge leap of faith. Let’s take stock of Dow Jones’s working capital model at the end of its old-economy heyday, in 1992. These were the noncash elements of its working capital at that time: • Current assets (other than cash) = 37 days – Inventory: 4 days – Accounts receivable: 33 days (subscribers pay in advance, but advertisers pay in arrears; this figure reflects the latter) • Current liabilities = 109 days – Accounts payable: 70 days

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– Unearned subscriptions: 39 days (subscriptions paid for but not yet delivered) • Net of these elements = –72 days That’s seventy-two days’ worth of customer cash, or about 20 percent (72 days out of the 365-day year = 19.7 percent) of 1992’s $1.8 billion in revenue, that Dow Jones could use for other things. It’s like having $360 million of free money, just sitting there, ready to use to buy printing presses, pay wages, or to develop new businesses! By paying its suppliers (of newsprint among other things) in an average of seventy days and by collecting people’s subscriptions for its publications and newswires up front, Dow Jones had the ability to literally use other people’s money to pay its bills. But the game was changing. Would the working capital model that was central to any publisher’s success have to change as well?

Dow Jones Goes Digital By 1992 the company had already launched DowVision, a news service customized for Dow Jones’s corporate customers. DowVision delivered published text from the Wall Street Journal, New York Times, Financial Times, Washington Post, and Los Angeles Times, together with a premier version of the Dow Jones newswires, directly to corporate desktops. Pleased with its early progress, in 1995 Dow Jones’s leadership went public with its new strategy. “We’re taking our editorial standards to the Web, where a glut of information often makes searching for the right piece of information time-consuming and

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What’s Your Working Capital Model? A Case Study

fruitless.” The company saw two distinct segments for its electronic services: individuals or small companies and large enterprises, both of which it wanted to serve. Dow Jones developed new online services for individuals and small businesses, allowing them to use credit cards to purchase subscriptions or to pay for downloads of specific packages of information such as articles. Large enterprises on the other hand were expected to sign annual contracts for electronic access to Dow Jones’s information, paid in advance, of course. The company’s leaders had not forgotten what had gotten it this far, paid subscriptions up front! Soon there was an online electronic supplement to the Wall Street Journal ’s Money & Investing section, known as the “Wall Street Journal Interactive Edition” (known later as WSJ Online at WSJ.com). This electronic newspaper subscription service allowed individual users to browse articles online. Both DowVision and The Publications Library, a news archive, were made available for Web users, primarily serving large enterprises as research tools, on a subscription basis. From 1999 through 2006, Dow Jones quickened its digital pace, developing a joint venture with Reuters to create Factiva, a Web-based source of current and archived global news—subscriptions paid up front, of course. NewsPlus, a Web-formatted enhancement of Dow Jones’s newswires, and Dow Jones Financial Information Services, which gave financial professionals additional Web access to electronic media, information, and directories, were added. MarketWatch.com, which

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provided online business and financial news, was acquired. Dow Jones’s digital Plan B was well under way. In 2006, Dow Jones went further, getting rid of some of its paper-based products in favor of online offerings. It launched Barron’s Online and bought Factiva outright, terminating the joint venture with Reuters. In December it sold six of the community newspapers that it had published for years. CEO Rich Zannino said, “This sale and the pending acquisition of Factiva are the latest examples of our commitment to transform Dow Jones from a company heavily dependent on print publishing revenue to a more diversified company capable of meeting the needs of its customers across all consumer and enterprise media channels, whether print, online, mobile or otherwise.”

Would Its Subscription-Reliant Working Capital Model Still Work? The Dow Jones management team consisted of veterans who understood the crucial role that the working capital model played in the publishing industry. When they adopted Plan B and its new digital revenue model, they retained a crucial element of Plan A—the company’s working capital model. Take a look at the 2006 Dow Jones numbers to see what happened: • Current assets (other than cash) = 58 days – Inventory: 3 days – Accounts receivable: 55 days • Current liabilities = 135 days

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What’s Your Working Capital Model? A Case Study

– Accounts payable: 88 days – Unearned subscriptions: 47 days • Net of these elements = –77 days The Dow Jones’s working capital model had improved to –77 days in 2006 (compared with –72 days in 1992)! The bedrock of the model, paid subscriptions up front, was still in place. The company still charged for traditional subscriptions for the Wall Street Journal and its remaining local newspapers, and for Barron’s, Factiva, and its newswires. Most components of Barron’s Online and WSJ.com required a subscription, as did some elements of MarketWatch. The Dow Jones indexes were both subscription- and license-based. And Dow Jones Online News could be licensed for a fee. Only a few experiments, such as CareerJournal.com, RealEstateJournal. com and OpinionJournal.com, came subscription-free. The business had been transformed without going hat-in-hand to investors, funded largely by its customers’ cash, and its precious working capital model had remained intact. The results for Dow Jones shareholders? Net income more than tripled on virtually the same $1.8 billion in revenue, rising from $107 million in 1992 to $386 million in 2006. And, perhaps with a nod to the company’s successful transition to the digital age, Rupert Murdoch’s News Corporation purchased Dow Jones for $5 billion in August 2007. Notably, and probably with thanks to Dow Jones’s veterans, Murdoch, who indicated before the acquisition that he would make WSJ Online

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free and ad-based, has left its subscription-based, negative working capital model in place.

Lessons from Dow Jones Dow Jones & Company shows us that negative working capital is helpful in coping with dramatic changes, such as those it faced in the digital revolution. Such a model provides customer cash with which to develop new products and strategies to iterate toward Plan B. Equally important was its management team’s ability to identify new kinds and forms of content—new products, each of which was a leap of faith until proven—that consumers and business customers would value and pay for. By itself, a better working capital model is not enough. Indeed, this point is evidenced by the cash infusion the New York Times needed in January 2009 from Carlos Slim, the Mexican billionaire, in order to remain afloat. The Times had not been nearly as inventive as Dow Jones in developing cash-generative digital offerings to make its own digital transition. While Dow Jones largely maintained its subscription-based model as it went digital, the New York Times did otherwise in making the New York Times Online free. Dow Jones & Company also shows how a powerful working capital model, common to an entire industry in this case, can enable changes in other parts of one’s strategy and make seemingly wrenching changes appear as smooth as silk. Though sailing was not always easy for Dow Jones—there were a couple of loss-making years along the way—its transition to the digital age was, for the most part, successful. Sometimes, though, it takes in-

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novators to bring new and different working capital models to an established industry. When they do, watch out!

John Mullins is an associate professor of management practice at London Business School. Randy Komisar is a partner at Kleiner Perkins Caufield & Byers and a lecturer on entrepreneurship at Stanford University.

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Learn to Speak the Language of ROI by John O’Leary

Nobody is getting approval to spend money these days unless he or she can demonstrate an economic return. And so nonfinancial professionals are having to master the mysterious lexicon of return on investment (ROI), which includes terms such as breakeven, internal rate of return, and discounted cash flow. These concepts should be second nature for anyone charged with making or contributing to financial decisions. But in too many companies, it’s only the finance mavens who really understand ROI. Say you want to spend $200,000 on a new automated call system. You’re jazzed up about how reducing wait times from 60 seconds to 30 seconds will boost customer satisfaction and loyalty. As important as such improve-

Adapted from Harvard Management Update (product #U0210C), October 2002

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ments are, they’re not what the green-eyeshade types in finance care most about. For them, the key benefit is adding more money to the bottom line. Since they’re the ones making the decision on your project, not only do you have to understand how the new system will increase profits, you must also be able to use the language of financial modeling to make the case for your initiative. To get your project funded, especially when money is tight, here’s what you need to learn.

Cash Flow Modeling An ROI analysis enables you to compare the financial consequences of two (or more) business alternatives. Should we spend X dollars to do Project A or Y dollars to do Project B? Would we be better off buying or leasing? Would it be better to create this product in-house or to outsource? To answer such questions you have to build a business case—a financial story based on facts, reasonable assumptions, and logic. At the heart of this story is a picture of the expected cash flow. A cash flow projection provides estimates of the net financial impact of a decision over a period of time. To construct such a projection, you must document not only all of the expected costs and benefits of the decision but also the time period in which they occur. Most ROI calculations seek to project three to five years out. Here it’s important to highlight a crucial difference between an ROI analysis and an income, or profit-andloss (P&L), statement. The ROI analysis is cash-based, whereas a P&L uses standard accounting principles to spread out costs in a reasonable fashion. For example, on 106

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BUILDING THE FINANCIAL CASE The following ROI analysis makes projections for the launch of a fictitious new product, the RT-200. As with many cash flow analyses, this spreadsheet compares the financial consequences of investing in the launch of the RT-200 against the alternative of not launching the product (which carries no cost or return). US$ in thousands

Year 1

Year 4

Total

Financial benefit (revenue or cost savings) Revenue – 500 1,000 (Lost revenue) (50) (100) (100) Cost savings – 100 120

1,500 (100) 130

3,000 (350) 350

Total benefit

1,020

1,530

3,000

Investments/capital expenditures: Hardware 600 – Licenses 200 – Development 500 –

100 – –

– – 100

700 200 600

Subtotal capital

–

100

100

1,500

Operating expenses: Headcount 25 Fabrication Marketing

25 55 420

25 90 130

25 155 50

100 300 600

Subtotal operating

25

500

245

230

1,000

Total investments 1,325

500

345

330

2,500

(50)

1,300

Year 2

500

Year 3

Return on investment  Total return = $500

Total cash flow Discounted cash flow (Present value) Assumes 10% discount rate

Year 1

Year 2

Year 3

Year 4

Total

(1,375)

–

675

1,200

500

(1,375)

–

557

902

84

(continued)

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(continued) The bottom-line ROI analysis on the RT-200 project: • The project will cost $2.5 million in capital and operating expenses during the next four years but will generate $3 million in additional revenue and cost savings, for a four-year ROI of 20%. • The project will be at breakeven during Year 4. • The payback period for this investment is between three and four years. • The net present value of this investment is $84,000, assuming a discount rate (or cost of capital) of 10%. • The internal rate of return is 12.5%.

a P&L, an expenditure for a piece of equipment with a useful life of five years might be amortized on a straightline basis over that time frame, with one-fifth of the cost hitting the P&L each year. On a cash flow statement, the charge hits in the time period that you send the check out the door. Often an important element of building a cash flow is translating “soft” benefits into hard numbers. If you work for an airline and want to increase passenger legroom, it would be easy to calculate the hard costs of removing sev-

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eral rows of seats. But how would you quantify the benefits of having happier, more comfortable passengers? One approach might be through survey data showing that, say, 10% of your passengers would be willing to pay a 15% premium for more legroom. And don’t forget to estimate the financial impact of the higher customer retention you might experience because of your roomier seats, or of the new customers you might win over. You may want to build a spreadsheet to see how your estimate of the financial benefit changes as you alter your assumptions. Once you’ve finished estimating all the positive and negative cash flows associated with the decision in question, summarize the cash flow by calculating the net impact for each time period. At that point, you’re ready to start analyzing the results using the following methods of comparison: • Payback period. This is the point at which all the costs expended have been recovered. Many companies have a benchmark of five to seven years as a maximum payback period. • Breakeven point. This is the moment when costs are matched by increased revenue or cost savings for that period. The time between the breakeven point and the end of the payback period will vary according to how significantly revenues outpace costs after the breakeven point has been reached. • Discounted cash flow (DCF). This is a summarized cash flow that accounts for the time value of money, which is an adjustment for the fact that

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$100 received today is worth more than $20 a year for the next five years. The DCF shows the impact of your project in today’s dollars. The present value of $100 in the future is calculated with the following formula:

Present Value = $100 / (1+x)n where n is the number of years into the future that the benefit (or cost) will occur, and x is the interest rate expressed in hundredths. • Net present value (NPV). The sum of all the present values in the discounted cash flow, the NPV gives you a sense of the absolute size of the return expected from a project. As shown in the example, the NPV of $84,000 means that the projected overall financial benefit of the project is equivalent to realizing an immediate gain of $84,000 (see “Building the Financial Case” on page 107). The NPV should be looked at in light of the size of the investment that will be made, which in this case is $2.5 million. Although any NPV above zero shows that doing the project is preferable to doing nothing, in practice the benchmark NPV to beat is not zero but how much the investment could have earned in an alternative project. (It’s easy to calculate NPV on a business calculator or computer.) • Internal rate of return (IRR). This is the interest rate at which the discounted cash flow yields a net present value of zero. This metric is of limited use, because it doesn’t tell you how long you will enjoy

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the given rate of return, nor does it show you the dollar amount of the return. Indeed, a pure IRR analysis can lead you to make poor decisions on competing investments.

Getting Your Budget Approved Conducting the ROI analysis is just the first step. Now take it to the folks in finance. Don’t bore them with talk about boosting customer satisfaction or reducing cycle times. Use the ROI analysis to spell out how your project will make the company money. Let’s return to the automated call system example: Your focus, when pitching this investment to the finance department, should be on how shorter wait times will mean fewer customers switching to competitors, which will translate into more revenue. Moreover, the new call system will require fewer customer service reps, which will also translate into lower costs. This “dollars first” thinking will enable you to engage your audience in their passion—not yours. By describing your initiative in language that finance hears best, you’re much more likely to win approval.

Boston-based business writer John O’Leary is the author of Revolution at the Roots (Free Press, 1995), a book about best practices in the public sector.

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Practical Tools for Management Decisions Finance and accounting provide a rich trove of practical tools that will help answer some of the most important management questions you’ll ever face: • What are the costs and benefits of a particular investment? • What is its estimated return? • How quickly will your company recoup the investment? • How many units will it have to sell at specific prices to simply break even? • Does your company have the right balance of fixed and variable costs?

Adapted from Harvard Business Essentials: Finance for Managers (product #5856BC), Harvard Business Review Press, 2002

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• How can you estimate nonquantifiable costs and benefits?

Cost/Benefit Analysis Suppose that Amalgamated Hat Rack is considering two investment options: (1) buying a new piece of machinery and (2) creating a new product line. The new machine is a smart-technology, high-temperature plastic extruder costing $100,000. Amalgamated believes that this machinery will save time and money over the long term and is safer than the current machinery. The second option, launching a line of coat racks, will require a $250,000 investment in plant, equipment, and design. How can Amalgamated decide whether either option makes economic sense? By doing a cost/benefit analysis. This means evaluating whether, over a given time frame, the benefits will outweigh the associated costs. First, though, it’s important to understand the cost of the status quo. You want to weigh the relative merits of each investment against the negative consequences, if any, of not making the investment at all. Cost/benefit analysis involves the following steps: 1. Identify the costs associated with the new busi-

ness opportunity. Consider this year’s up-front costs plus those you anticipate in subsequent years. 2. Identify the benefits of additional revenues the

investment will bring. These revenues could come from more customers or from increased purchases by existing customers. Be sure to factor

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in associated new costs; ultimately, that means you’ll be looking at profit. 3. Identify the cost savings to be gained. Some are straightforward; others are subtle and difficult to quantify. More efficient processing, for instance, could save you money because fewer people are required to do the same work, or because the process requires fewer steps, or because the time spent on each step decreases. 4. Map out the timeline for expected costs and

revenues. When do you expect the costs to be incurred? In what increments? When do you expect to receive the benefits (additional revenues or cost savings)? In what increments? 5. Evaluate the nonquantifiable benefits and costs. There may be several, such as whether the investment strengthens a firm’s position with distributors and whether it will add unnecessary product or process complexity to the firm’s operations. Once all that’s done, you’re ready to begin evaluating the investment opportunities by using one or more of the analytical tools below: accounting return on investment, payback period, or breakeven analysis.

Accounting Return on Investment Return on investment (ROI)—or, to use the more technical term, accounting return on investment—is not always the best measure of an investment’s success. But because many managers still use ROI, it pays to under-

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stand how they look at it. Accounting return on investment can take the form of cost savings, incremental profit, or value appreciation. Let’s look at the simplest possible way of figuring it, although as we’ll see in a moment, it isn’t very realistic. You would begin by determining the net return, simply by subtracting the total cost of the investment from the total benefits received. Then, to calculate the ROI, you would divide the return by the total cost of the investment. Suppose the new $100,000 extruder Amalgamated is considering would realize an annual $18,000 in savings for the company over the lifetime of the machine, which is estimated to be seven years. The total savings would thus be $126,000 ($18,000 × 7), making for a net return of $26,000 ($126,000 – $100,000). If you divide the net return ($26,000) by the total cost of the investment ($100,000), you get an ROI of 26%. But that isn’t the true return on investment, because it ignores the time value of money. For example, which would you rather have (assuming equal risks): an investment that gave you a 26% return in one year, or one that gave you the same return at the end of seven years? No contest there. Any rational investor would want the money sooner rather than later. Thus, true ROI calculations must always factor in the time value of money. Depending on your assumptions, you might find that the true ROI on the extruder was 5% or 10% rather than 26%. Would any of those percentages even be a good return on the investment? In isolation, such figures have no particular meaning, since ROI calculations are a way

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of comparing returns on money a company invests internally with returns available to it elsewhere at the same level of risk. The notion of equal risk is very important here. All investors demand higher returns for higher risk. It makes no sense to compare the returns the company believes it could make from an investment in A, the relatively safe expansion of a current product line, with an investment in B, a wholly new product line for an untested market. The risk levels of the two potential investments are simply not equivalent. The higher-risk investment should have a higher potential return.

Payback Period Companies also want to know the payback period: how long it will take a particular investment to pay for itself. We already know that the plastic extruder is expected to save Amalgamated $18,000 a year. To determine the payback period, divide the total amount of the investment by the annual savings expected. In this case, $100,000 divided by $18,000 equals 5.56. In other words, the extruder will pay for itself in about five-and-a-half years. What if we assume that the extruder will wear out after four years rather than five? The investment now appears to be not particularly attractive—certainly less attractive than an investment with a similar ROI and a payback period of three years. As an analytical tool, the payback period tells you only one thing: how long it will take to recoup your investment. Although it is not useful in comparing real alternatives, some executives still rely on it.

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Breakeven Analysis Breakeven analysis tells you how much (or how much more) you need to sell in order to pay for the fixed investment—in other words, at what point you will break even on your cash flow. With that information in hand, you can look at market demand and competitors’ market shares to determine whether it’s realistic to expect to sell that much. Breakeven analysis can also help you think through the impact of changing price and volume relationships. Most companies do breakeven analysis on the basis of revenue and gross profit margin. Here we will take a simplified approach and do the figuring on the basis of unit volume, so you can see the underlying reality. Our breakeven calculation will help you determine the volume level at which the total after-tax contribution from a product line or an investment covers its total fixed costs. Before you can perform the calculation, you need to understand the components that go into it: • Fixed costs. These are costs that stay mostly the same, no matter how many units of a product or service are sold—costs such as insurance, management salaries, and rent or lease payments. For example, the rent on the production facility will be the same, whether the company makes 10,000 or 20,000 units, and so will the insurance. • Variable costs. Variable costs are those that change with the number of units produced and sold. Examples include labor and the costs of raw

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materials. The more units you make, the more you consume these items. • Contribution margin. This is the amount of money that every sold unit contributes to paying for fixed costs. It is defined as net unit revenue minus variable (or direct) costs per unit. With these concepts understood, we can do the calculation with this straightforward equation:

Breakeven Volume = Fixed Costs / Unit Contribution Margin First, find the unit contribution margin by subtracting the variable costs per unit from the net revenue per unit. Then divide total fixed costs, or the amount of the investment, by the unit contribution margin. The quotient is the breakeven volume—that is, the number of units that must be sold for all fixed costs to be covered. To see breakeven analysis in practice, let’s look again at the plastic extruder example. Suppose that each hat rack produced by the extruder sells for $75, and that the variable cost per unit is $22:

$75 (Price per Unit) – $22 (Variable Cost per Unit) = $53 (Unit Contribution Margin) Therefore:

$100,000 (Total Investment Required) / $53 (Unit Contribution Margin) = 1,887 Units In other words, Amalgamated must sell 1,887 hat racks to recover its $100,000 investment. At this point,

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A BREAKEVEN COMPLICATION Our Hat Rack breakeven analysis represents a simple case. It assumes that costs are distinctly fixed or variable and that costs and unit contributions will not change if output increases or decreases. These assumptions may not hold in the real world. Rent may be fixed up to a certain level of production and then increase by 50% as you rent a secondary facility to handle expanded output. Labor costs may in reality be a hybrid of fixed and variable. And as you push more and more of your product into the market, you may find it necessary to offer price discounts—which reduce contribution per unit. You will need to adjust the breakeven calculation to accommodate these untidy realities.

the company must decide whether the breakeven volume is achievable: Is it realistic to expect to sell 1,887 additional hat racks, and if so, how quickly?

Operating Leverage Your goal, of course, is not to break even but to make a profit. Once you’ve covered all your fixed costs with the contributions of many unit sales, every subsequent sale contributes directly to profits. To restate the equation used earlier in slightly different form:

Unit Net Revenue – Unit Variable Cost = Unit Contribution to Profit

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You can see at a glance that the lower the unit variable cost, the greater the contribution to profits will be. In the pharmaceutical business, for example, the unit cost of producing and packaging a bottle of a new wonder drug may be a dollar or less. Yet if the company can sell each bottle for $100, it captures $99 per bottle in profit once sales have exceeded the breakeven point! Of course, the pharmaceutical company may have invested $400 million up front in fixed product development costs just to get the first bottle out the door. It will have to sell many bottles just to break even. But if it can, the profits will be extraordinary. The relationship between fixed and variable costs is often described in terms of operating leverage. Companies with high fixed costs and low variable costs have high operating leverage. This is true of businesses in the software industry, for instance, where fixed product-development outlays are the bulk of a firm’s costs and the variable cost of the discs on which programs are distributed represent only pennies. By contrast, companies with low operating leverage have low fixed costs relative to the total cost of producing every unit of output. A law firm, for example, has a minimal investment in equipment and fixed expenses. Most of its costs are the fees it pays its attorneys, which vary depending on the hours they bill to clients. Operating leverage is a great thing once a company passes its breakeven point, but it can cause substantial losses if breakeven is never achieved. In other words, it’s risky. This is why managers give so much thought to finding the right balance between fixed and variable costs.

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Amalgamated Hat Rack, Coat Rack Division, January budget-to-actual Budget Jan. Coat rack revenues Cost of goods sold Gross margin Marketing expense Administrative expense Total operating expense Operating profit (EBIT)

Actual Jan.

Variance

$39,000

$38,725

($275)*

19,500

19,200

300

19,500 8,500

19,525 10,100

25 (1,600)

4,750

4,320

430

13,250

14,420

(1,170)

$6,250

$5,105

($1,145)

*All parentheses indicate unfavorable variances. Source: HMM Finance

Estimating Nonquantifiable Benefits and Costs Because the numbers seldom tell the whole story, you’ll need to look at qualitative factors too. For instance, how well does a potential investment fit the company’s strategy and mission? Can the firm take it on without losing focus? How likely is it to succeed, given market conditions? Even though such factors are not fully quantifiable, try to quantify them as much as possible. Say you’re assessing the value of improved data—more comprehensive information that is easier to understand and more widely available—that a new investment would bring. You could try to come up with a dollar figure that represents the value of employees’ time saved by the data, or the value of the increased customer retention that might be gleaned

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from your better understanding of purchase patterns. Such estimates should not necessarily be incorporated into your ROI or other quantified analyses, but they can be very persuasive nevertheless. Weigh the quantifiable and the nonquantifiable factors together. For example, if an investment opportunity is only marginally positive according to the numbers, you may want to give equal weight to qualitative considerations (such as its likelihood to increase customer loyalty) in your final decision.

Tracking Performance Once you’ve decided to undertake an investment opportunity, you should monitor its progress. Track your projections against actual revenues and expenses. It’s a good idea to do this on a monthly basis, so that you can spot potential problems early on. With that in mind, let’s look at projections for a new coat rack division at Amalgamated Hat Rack. The table on the previous page shows the state of affairs early in the first quarter. The division is doing reasonably well on revenues and cost of goods sold. Its only really large negative variance is in the marketing expense line. Because the numbers are based on just the first month’s figures, it is difficult to know if that variance is simply a onetime, or seasonal, variation, or if Amalgamated will have to spend more on marketing than anticipated. If your investment is not tracking according to budget, and if it looks as if the pattern of unexpectedly high costs (or unexpectedly low revenues) will hold, you may need to rethink the initiative— or even discontinue it.

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Section 3

The Limits of Financial Data This part of the HBR Guide to Finance Basics for Managers is a little different from the rest. In the earlier sections you learned the fundamentals. In this one you’ll get some advice about how to evaluate what you know, how to use it most effectively, and how to supplement it with other kinds of information. Why are such cautions necessary? Mainly because we tend to put too much faith in numbers. The income statement and balance sheet may seem precise, but they aren’t. They reflect all sorts of assumptions, estimates, and procedural decisions, such as which depreciation method to use. Moreover, there is much about a business that the numbers—even the truly precise ones on the cash flow statement—can’t capture. So when you use the financial statements, you have to exercise good judgment about what they’re telling you and determine how they may be misleading you. The articles in this section will help.

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What the Financial Statements Don’t Tell You by John Case

In 2006, one of the largest firms on Wall Street turned in perhaps its best performance ever. Earnings set a record for the fourth year in a row; pretax profit margin was a whopping 30.1%. “After several years of restructuring and investing in our business, all of the components came together to reflect a company capable of strong disciplined performance with tremendous potential for future success,” wrote the chairman in his letter to shareholders. The firm was Merrill Lynch. The following year it lost $8.6 billion—“the worst performance in the history of Merrill Lynch,” as the (new) chairman acknowledged. In 2008 Bank of America agreed to buy Merrill in a distress sale, and in 2009 the firm ceased to exist as an independent entity.

. . . 127

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In 2010, the chief executive of a major oil company reported a good deal of satisfaction with his company’s financial results the previous year. Despite a harsh economic climate and a lower price for petroleum, return on sales had dropped only a fraction of a percentage point, and the company actually increased its dividend to shareholders by 2%. “A revitalized [company] kept up its momentum and delivered strong operating and financial results while continuing to focus on safe and reliable operations,” he wrote to his shareholders on February 26. The oil company was BP. Less than two months later, the drilling rig Deepwater Horizon blew up, killing 11 people and unleashing the biggest offshore oil spill in history. The ultimate cost to BP—in money, in reputation, in its ability to operate around the world— wouldn’t be known for years. BP’s own estimates of direct costs came to roughly $40 billion.

Grim stories such as these are cautionary tales about what you can and cannot discern just by scrutinizing a company’s financials. It’s true that finance is the language of business, and unless you can grasp it, you will be at a perpetual disadvantage in any kind of business career. But make no mistake: The financials describe only a fraction of a company’s reality, and sometimes a misleading fraction at that. So in this chapter we’ll look not at what the financials tell you but at what they don’t tell you. The figures themselves may be wrong or deceptive. They may be silent about a host of organizational matters that affect a company’s success. They may capture a business reality that is 128

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true for the moment but that is about to be transformed by external events. Wise managers always keep one eye on the financial reports, the ultimate gauge of their performance. But they keep an equally sharp eye on all the nonfinancial or external factors that show up late, murkily, or not at all in the financial data. As we’ll see, such factors fill in the rest of the picture.

Financial Sleight of Hand One limitation of financial statements is that they can be manipulated. The usual goal, of course, is to make things look better than they really are. The manipulation may take the form of outright fraud. The Italian company Parmalat—a multibillion-dollar food giant with operations in dozens of countries—defaulted on a bond payment in November 2003. Alarmed, auditors and lenders began scrutinizing the company’s books, which seemed to show that Parmalat held nearly $5 billion in an account with Bank of America. In December, however, Bank of America reported that there was no such account. Parmalat wound up in bankruptcy, and some of its executives received prison sentences for the deception. More often, the manipulation is subtler: A company simply alters its accounting practices. Accountants have a good deal of discretion over many items on the income statement and the balance sheet, and are free to adopt different procedures and assumptions as long as they deem the changes reasonable and apply them consistently. A company can change the way it values inventory, for example, or the amount that it sets aside for bad debt. Either move will trigger an adjustment—positive 129

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or negative—to the income statement and make the bottom line look better or worse. A company can also alter its depreciation schedule. If it owns a fleet of trucks or airplanes and decides that each one should last 12 years rather than 10, it will then record less depreciation on its income statement. Presto: The bottom line suddenly grows by a corresponding amount. In theory, any new procedure or assumption that is material to the company’s results should appear in the footnotes to the financials. But the accountants get to decide whether the new way of doing things is material. The line between fraud and a reasonable change in procedures isn’t always clear. One telecommunications company got itself in trouble by taking a group of expenses that everyone else in the industry classified as operating expenses and inappropriately categorizing them as capital expenditures. Since only a part of a capital expenditure—depreciation—shows up on the income statement, the company’s profits improved significantly. Some people in the company presumably believed that the change was justified. The Justice Department disagreed, characterizing the move as an “accounting trick” and issuing an indictment. The moral here is that it pays to understand the assumptions and procedures used to calculate the financials. The statements themselves don’t always tell the truth, the whole truth, and nothing but the truth.

Only One Piece of the Financial Puzzle The three statements reveal a good deal, but not everything, about a company’s financial position. For instance,

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assets such as land, buildings, and equipment are recorded at historical cost on the balance sheet and depreciated accordingly—but nowhere does the balance sheet say what they might be worth on the open market today. (The continuing debate over “mark to market” accounting, in which companies use real or estimated market prices to value their assets, applies only to financial assets.) Merrill Lynch held plenty of assets, such as mortgage-backed securities. But when the housing bubble collapsed, those assets turned out to be worth far less than anybody had imagined. Probably the most important financial fact the three major statements don’t tell you is what a company as a whole is worth. The owners’ equity line on the balance sheet, which you might think indicates value, really has nothing to do with what a buyer would have to pay to acquire the firm. For publicly traded companies, the value of the entire enterprise is known as its market capitalization, or just market cap. This is the amount, in theory, that an investor would have to pay to buy all the shares of stock. To calculate market cap, you simply multiply the stock price by the total number of shares. The value changes daily, just because share prices move up and down. The price movements depend only partly on the performance reflected in financial statements. They also depend on what is happening to the market in general—that is, how interested investors are in buying stocks. General Electric’s shares hit about 60 during the height of the dot-com boom in the early 2000s and plunged to about 6 during the depths of the financial crisis later in the decade. The

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company was performing somewhat differently during the two periods, but the gap in performance was nowhere near as great as the difference in share price and hence market cap. Of course, it is rare for anyone to buy a publicly traded company at a figure close to its market cap on any given day. If an investor or potential acquirer announces an intention to scoop up all of a company’s shares, the shares naturally rise in value. That’s why prospective buyers typically have to pay a premium over the shares’ value on the day of the announcement. The value of a private company is harder to determine. A high-tech firm might be worth considerably more than its book value, or owners’ equity, because a buyer would be hoping to acquire intangibles, such as engineering expertise or intellectual property. Neither of these asset categories shows up on the balance sheet. A small service company such as a marketing firm or a plumbing contractor, by contrast, might be worth considerably less than owners’ equity would suggest. Its tangible assets—computers, telephone equipment, vehicles, inventory—may not yet be fully depreciated, but they may also have little value on the open market. For this kind of company, the real value lies in the experience, expertise, and contacts of the business owner. The buyer’s motivations matter, too. An acquirer simply buying the business for its hard assets is likely to pay less than someone who wants to keep the enterprise as a going concern. A socalled strategic buyer—an acquirer that needs the private company to fill out its business lines, its technologies, or its geographic reach—may pay most of all.

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Reaching Beyond the Financials The financial statements are essentially backwardlooking. The income statement and cash flow statement tell you how an organization performed along certain dimensions in a previous time period. The balance sheet gives you a snapshot of its financial health as of a given date. But a business also needs to know what is going on right now and what’s likely to happen tomorrow. If its managers can do something about those factors in the present, they’ll greatly improve their chances of seeing better results next quarter or next year. Here are three key categories of information that you won’t learn about from the financials:

1. The organization’s nonfinancial health. The explosion of the Deepwater Horizon in the Gulf of Mexico wasn’t BP’s first major accident in recent years. An explosion at the company’s Texas City refinery in 2005 killed 15 people and injured 180 more. Later that year another BP drilling platform in the Gulf nearly sank because workers hurrying to finish it had installed a valve incorrectly. In 2006 BP’s pipelines from Alaska’s Prudhoe Bay field began to leak, eventually spilling 267,000 gallons—the area’s worst spill ever. Somehow the company seemed unable to fix its recurrent safety problems. In 2009, reported Fortune magazine, . . . the federal Occupational Safety and Health Administration (OSHA) proposed a record fine against BP for “failure to abate” previously cited hazards at Texas

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City. OSHA also cited BP for hundreds of new “willful” safety violations. (BP totaled 829 such refinery violations from June 2007 to February 2010, according to the Center for Public Integrity. The rest of the industry combined had 33.) There had been three more deaths at Texas City since the 2005 explosion.

If a company has safety issues like these, it’s probably an unhealthy organization—that is, it’s likely to experience one problem after another, regardless of what the financials might say about its fiscal health. Safety is just one aspect of organizational health (and one that is far more relevant in mining or manufacturing than, say, in banking). Another is the level of employee engagement. Do people enjoy working at your company? Would they recommend it to a friend? To answer these questions you need data from employee surveys, for example, and from human-resources indicators such as employee retention rates. You won’t find any of this information on the financials. Healthy organizations are also nimble: Their people can make and execute good decisions without undue time or trouble. Bain & Company consultants Marcia Blenko, Paul Rogers, and Michael Mankins, in their book Decide & Deliver (Harvard Business Review Press, 2010), tell the story of ABB, the big Switzerland-based power equipment and automation company. ABB was much heralded in the 1990s for its radically decentralized structure, and for a while its financial performance lived up to the accolades. But a particular kind of rot was eating away at ABB from the inside: People were fighting tooth and nail over basic business decisions such as bid134

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ding on big power projects. “Overall, the company was structured into a complex labyrinth, with thousands of units operating on their own,” the authors write. “Many of these local entities controlled factories and thus did all they could to sell the products those factories made, even if that meant discouraging customers from patronizing other ABB units.” In effect, the company was hamstrung by its own structure. “With so many decisions requiring intense negotiations, internal politics grew bitter.” There is no direct information about organizational decisiveness in the financials. Many companies gather data about it through employee surveys, interviews, and internal focus groups. As with employee engagement, the results help executives understand why and how the company’s future financial performance might suffer.

2. What customers are thinking. Customer attitudes—their satisfaction with a company and its products, their gripes and complaints, their intent to repurchase, and so forth—also don’t appear on the financials. Yet those attitudes are critical indicators of a company’s future success. After all, if a firm can’t hold on to its customers and attract new ones, its prospects are likely to be dim. Determining customer attitudes requires several different kinds of research. The periodic customer-satisfaction surveys that most large companies conduct provide a starting point. (The quality of this data is often suspect, however. For instance, a company may encourage its customers to give it high marks when the surveyor calls, as many auto dealerships do.) It is probably more helpful to scrutinize customer behavior. How long do your 135

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customers stay with you? What percentage of them buy only once and then are never heard from again? What is your “share of wallet”—that is, how much of their total spending in your categories do you get? Many companies also make a point of creating communities of customers to advise them on policies, new products, and the like. LEGO encourages and supports local hobbyists’ clubs and conferences, and often creates new product kits based on ideas from the avid users who participate in such get-togethers.

3. What competitors are planning. Every business is vulnerable to competitors, so the more you know about your rivals, the better off you are. This point is hardly original, and most companies spend a good deal of time and resources trying to anticipate competitors’ next moves. Even so, they often are bested by rivals. Consider the following pitfalls: • Ignoring the blind side. In the 1970s and 1980s, General Motors, Ford, and Chrysler competed fiercely with one another—and famously failed to notice the onslaught of lower-cost, higher-quality vehicles being imported from Japan. It took years for Detroit’s Big Three to catch up with Toyota, Nissan, and Honda in cost and quality. Meanwhile the U.S. companies lost huge amounts of market share to the imports. • Ignoring upstarts. Xerox once dominated the market for photocopiers. When Canon came along with a small, inexpensive, slow-operating copier

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designed for small businesses and home offices, Xerox didn’t pay much attention. As Harvard Business School professor Clayton M. Christensen points out in his work on disruptive innovation, that made perfect sense—Xerox’s customers weren’t interested in cheap, underperforming machines. But Canon got a toehold in the market, and it was soon able to improve its machines, move up-market, and challenge Xerox head-on. • Missing the next big thing. Nokia, once the leader among cell phone manufacturers, found itself upstaged and outcompeted by Apple’s iPhone and other smart phones. Although it had introduced a smart phone of its own, it missed the appeal of touch-screen technology. So rapid was the company’s fall that by 2010 Nokia was in danger of becoming a second-tier player, particularly in the United States. Competitors’ plans don’t show up in any survey. Smart companies keep a careful eye on those plans by analyzing their competitors’ reports and press releases, talking to knowledgeable analysts and observers, and attending industry conferences. A business that pays little attention to the competition does so at its peril.

It makes sense for every manager to read, understand, and stay on top of the financials—not just the three key statements, which are summaries, but day-to-day data on revenues, operating costs, performance to budget, and

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the like. But if you put too much trust in the numbers and fail to consider factors they don’t capture, you’re likely to wind up in trouble. To avoid the well-chronicled missteps of Merrill Lynch, BP, and others, search everywhere for the information you need, and make sure you get it in a timely, useful fashion. If you wait to see the last period’s financials, it will be too late.

John Case is a consulting writer to a variety of clients, including Bain & Company and the Business Literacy Institute. He is the author or coauthor of more than a dozen books on business and management.

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The Five Traps of Performance Measurement by Andrew Likierman

In an episode of Frasier, the television sitcom that follows the fortunes of a Seattle-based psychoanalyst, the eponymous hero’s brother gloomily summarizes a task ahead: “Difficult and boring—my favorite combination.” If this is your reaction to the challenge of improving the measurement of your organization’s performance, you are not alone. In my experience, most senior executives find it an onerous if not threatening task. Thus they leave it to people who may not be natural judges of performance but are fluent in the language of spreadsheets. The inevitable result is a mass of numbers and comparisons that provide little insight into a company’s performance and may

Reprinted from Harvard Business Review, October 2009 (product #R0910L)

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even lead to decisions that hurt it. That’s a big problem in the current recession, because the margin for error is virtually nonexistent. So how should executives take ownership of performance assessment? They need to find measures, qualitative as well as quantitative, that look past this year’s budget and previous results to determine how the company will fare against its competitors in the future. They need to move beyond a few simple, easy-to-game metrics and embrace an array of more sophisticated ones. And they need to keep people on their toes and make sure that today’s measures are not about yesterday’s business model. In the following pages I present what I’ve found to be the five most common traps in measuring performance and illustrate how some organizations have managed to avoid them. My prescriptions aren’t exhaustive, but they’ll provide a good start. In any event, they can help you steal a march on rivals who are caught in the same old traps.

Trap 1: Measuring Against Yourself The papers for the next regular performance assessment are on your desk, their thicket of numbers awaiting you. What are those numbers? Most likely, comparisons of current results with a plan or a budget. If that’s the case, you’re at grave risk of falling into the first trap of performance measurement: looking only at your own company. You may be doing better than the plan, but are you beating the competition? And what if the estimates you’re seeing were manipulated?

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To measure how well you’re doing, you need information about the benchmarks that matter most—the ones outside the organization. They will help you define competitive priorities and connect executive compensation to relative rather than absolute performance—meaning you’ll reward senior executives for doing better than everyone else. The trouble is that comparisons with your competitors can’t easily be made in real time—which is precisely why so many companies fall back on measurements against the previous year’s plans and budgets. You have to be creative about how you find the relevant data or some proxy for them. One way is to ask your customers. Enterprise, the carrental company, uses the Enterprise Service Quality Index, which measures customers’ repeat purchase intentions. Each branch of the company telephones a random sample of customers and asks whether they will use Enterprise again. When the index goes up, the company is gaining market share; when it falls, customers are taking their business elsewhere. The branches post results within two weeks, put them next to profitability numbers on monthly financial statements, and factor them into criteria for promotion (thus aligning sales goals and incentives). Of course you have to make sure you don’t annoy your customers as you gather data. Think about how restaurant managers seek feedback about the quality of their service: Most often they interrupt diners’ conversations to ask if everything is OK; sometimes they deliver a ques-

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tionnaire with the bill. Either approach can be irritating. Danny Meyer, the founder of New York’s Union Square Hospitality Group, gets the information unobtrusively, through simple observation. If people dining together in one of his restaurants are looking at one another, the service is probably working. If they’re all looking around the room, they may be wowed by the architecture, but it’s far more likely that the service is slow. Another way to get data is to go to professionals outside your company. When Marc Effron, the vice president of talent management for Avon Products, was trying to determine whether his company was doing a good job of finding and developing managers, he came up with the idea of creating a network of talent management professionals. Started in 2007, the New Talent Management Network has more than 1,200 members, for whom it conducts original research and provides a library of resources and best practices.

Trap 2: Looking Backward Along with budget figures, your performance assessment package almost certainly includes comparisons between this year and last. If so, watch out for the second trap, which is to focus on the past. Beating last year’s numbers is not the point; a performance measurement system needs to tell you whether the decisions you’re making now are going to help you in the coming months. Look for measures that lead rather than lag the profits in your business. The U.S. health insurer Humana, recognizing that its most expensive patients are the really sick ones (a few years back the company found that the sick-

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est 10% accounted for 80% of its costs), offers customers incentives for early screening. If it can get more customers into early or even preemptive treatment than other companies can, it will outperform rivals in the future. The quality of managerial decision making is another leading indicator of success. Boards must assess top executives’ wisdom and willingness to listen. Qualitative, subjective judgments based on independent directors’ own experience with an executive are usually more revealing than a formal analysis of the executive’s track record (an unreliable predictor of success, especially for a CEO) or his or her division’s financial performance. (See “Evaluating the CEO,” by Stephen P. Kaufman, HBR October 2008.) It may sound trite, but how the company presents itself in official communications often signals the management style of top executives. In August 2006 the Economist reported that Arijit Chatterjee and Donald Hambrick, of Pennsylvania State University, had devised a narcissism index on which to rate 105 company bosses, based on the prominence of the CEO’s photo in the annual report, his or her prominence in press releases, the frequency of the first person singular in interviews with the CEO, and his or her compensation relative to that of the firm’s second-highest-paid executive. Finally, you need to look not only at what you and others are doing but also at what you aren’t doing. The managers of one European investment bank told me that they measure performance by the outcomes of deals they’ve turned down as well as by the outcomes of deals they’ve won. If the ones they’ve rejected turn out to be lemons,

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those rejections count as successes. This kind of analysis seems obvious once stated, but I’ve noticed a persistent bias in all of us to focus on what we do over what we don’t do. Good management is about making choices, so a decision not to do something should be analyzed as closely as a decision to do something.

Trap 3: Putting Your Faith in Numbers Good or bad, the metrics in your performance assessment package all come as numbers. The problem is that numbers-driven managers often end up producing reams of low-quality data. Think about how companies collect feedback on service from their customers. It’s well known to statisticians that if you want evaluation forms to tell the real story, the anonymity of the respondents must be protected. Yet out of a desire to gather as much information as possible at points of contact, companies routinely ask customers to include personal data, and in many cases the employees who provided the service watch them fill out the forms. How surprised should you be if your employees hand in consistently favorable forms that they themselves collected? Bad assessments have a tendency to mysteriously disappear. Numbers-driven companies also gravitate toward the most popular measures. If they’re looking to compare themselves with other companies, they feel they should use whatever measures others use. The question of what measure is the right one gets lost. Take Frederick Reichheld’s widely used Net Promoter Score, which measures the likelihood that customers will recommend a product

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or service. The NPS is a useful indicator only if recommendations play the dominant role in a purchase decision; as its critics point out, customers’ propensity to switch in response to recommendations varies from industry to industry, so an NPS is probably more important to, say, a baby-food manufacturer than to an electricity supplier. Similar issues arise about the much touted link between employee satisfaction and profitability. The Employee-Customer-Profit Chain pioneered by Sears suggests that more-satisfied employees produce moresatisfied customers, who in turn deliver higher profits. If that’s true, the path is clear: Keep your employees content and watch those profits soar. But employees may be satisfied mainly because they like their colleagues (think lawyers) or because they’re highly paid and deferred to (think investment bankers). Or they may actually enjoy what they do, but their customers value price above the quality of service (think budget airlines). A particular bugbear of mine is the application of financial metrics to nonfinancial activities. Anxious to justify themselves rather than be outsourced, many service functions (such as IT, HR, and legal) try to devise a return on investment number to help their cause. Indeed, ROI is often described as the holy grail of measurement—a revealing metaphor, with its implication of an almost certainly doomed search. Suppose an HR manager undertakes to assign an ROI number to an executive training program. Typically, he or she would ask program participants to identify a ben-

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efit, assign a dollar value to it, and estimate the probability that the benefit came from the program. So a benefit that is worth $70,000 and has a 50% probability of being linked to the program means a program benefit of $35,000. If the program cost $25,000, the net benefit is $10,000—a 40% ROI. Think about this for a minute. How on earth can the presumed causal link be justified? By a statement like “I learned a production algorithm at the program and then applied it”? Assessing any serious executive program requires a much more sophisticated and qualitative approach. First you have to specify ahead of time the needs of the program’s stakeholders—participants, line managers, and sponsors—and make sure that the syllabus meets your organizational and talent management objectives. Once the program has ended, you have to look beyond immediate evaluations to at least six months after participants return to the workplace; their personal feedback should be incorporated in the next annual company performance review. At the soft drinks company Britvic, HR assesses its executive coaching program by tracking coachees for a year afterward, comparing their career trajectories with those of people who didn’t get coached.

Trap 4: Gaming Your Metrics In 2002 a leaked internal memo from associates at Clifford Chance, one of the world’s largest law firms, contended that pressure to deliver billable hours had encouraged its lawyers to pad their numbers and created an incentive to allocate to senior associates work that could be done by less expensive junior associates.

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Lawyers aren’t the only ones: A number of prominent companies have been caught trying to manipulate their numbers. Since 2004 Royal Dutch Shell has paid $470 million to settle lawsuits relating to its overstatement of reserves. Morgan Stanley was reportedly willing to lose €20 million on a securities trade for the Finnish government just before closing its books for 2004 in order to improve its position in the league table for global equity capital market rankings. You can’t prevent people from gaming numbers, no matter how outstanding your organization. The moment you choose to manage by a metric, you invite your managers to manipulate it. Metrics are only proxies for performance. Someone who has learned how to optimize a metric without actually having to perform will often do just that. To create an effective performance measurement system, you have to work with that fact rather than resort to wishful thinking and denial. It helps to diversify your metrics, because it’s a lot harder to game several of them at once. Clifford Chance replaced its single metric of billable hours with seven criteria on which to base bonuses: respect and mentoring, quality of work, excellence in client service, integrity, contribution to the community, commitment to diversity, and contribution to the firm as an institution. Metrics should have varying sources (colleagues, bosses, customers) and time frames. Mehrdad Baghai and coauthors described in “Performance Measures: Calibrating for Growth” (Journal of Business Strategy, July–August 1999) how the Japanese telecommunications company SoftBank measured performance along three time ho-

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rizons. Horizon 1 covered actions relevant to extending and defending core businesses, and metrics were based on current income and cash flow statements. Horizon 2 covered actions taken to build emerging businesses; metrics came from sales and marketing numbers. Horizon 3 covered creating opportunities for new businesses; success was measured through the attainment of preestablished milestones. Multiple levels like those make gaming far more complicated and far less likely to succeed. You can also vary the boundaries of your measurement, by defining responsibility more narrowly or by broadening it. To reduce delays in gate-closing time, Southwest Airlines, which had traditionally applied a metric only to gate agents, extended it to include the whole ground team—ticketing staff, gate staff, and loaders—so that everyone had an incentive to cooperate. Finally, you should loosen the link between meeting budgets and performance; far too many bonuses are awarded on that basis. Managers may either pad their budgets to make meeting them easier or pare them down too far to impress their bosses. Both practices can destroy value. Some companies get around the problem by giving managers leeway. The office supplier Staples, for example, lets them exceed their budgets if they can demonstrate that doing so will lead to improved service for customers. When I was a CFO, I offered scope for budget revisions during the year, usually in months three and six. Another way of providing budget flexibility is to set ranges rather than specific numbers as targets.

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The Five Traps of Performance Measurement

Trap 5: Sticking to Your Numbers Too Long As the saying goes, you manage what you measure. Unfortunately, performance assessment systems seldom evolve as fast as businesses do. Smaller and growing companies are especially likely to fall into this trap. In the earliest stages, performance is all about survival, cash resources, and growth. Comparisons are to last week, last month, and last year. But as the business matures, the focus has to move to profit and the comparisons to competitors. It’s easy to spot the need for change after things have gone wrong, but how can you evaluate your measures before they fail you? The answer is to be very precise about what you want to assess, be explicit about what metrics are assessing it, and make sure that everyone is clear about both. In looking for a measure of customer satisfaction, the British law firm Addleshaw Booth (now Addleshaw Goddard) discovered from a survey that its clients valued responsiveness most, followed by proactiveness and commercial-mindedness. Most firms would interpret this finding to mean they needed to be as quick as possible. Addleshaw Booth’s managers dug deeper into the data to understand more exactly what “responsiveness” meant. What they found was that they needed to differentiate between clients. “One size does not fit all,” an employee told me. “Being responsive for some clients means coming back to them in two hours; for others, it’s 10 minutes.”

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The point is that if you specify the indicator precisely and loudly, everyone can more easily see when it’s not fit for the purpose. The credit-rating agencies have come under attack because they gave AAA ratings to so many borrowers who turned out to be bad risks. The agencies have argued in their own defense that lenders misunderstood what the ratings meant. The AAA rating, they claim, was awarded on the basis of borrowers’ credit records, and it described the likelihood of default under normal market conditions; it did not factor in what might happen in the event of a massive shock to the financial system. Reasonable as this explanation may be, it is no consolation to those who thought they knew what the magic AAA represented.

Why do organizations that excel in so many other ways fall into these traps? Because the people managing performance frameworks are generally not experts in performance measurement. Finance managers are proficient at tracking expenses, monitoring risks, and raising capital, but they seldom have a grasp of how operating realities connect with performance. They are precisely the people who strive to reduce judgments to a single ROI number. The people who understand performance are line managers—who, of course, are crippled by conflicts of interest. A really good assessment system must bring finance and line managers into some kind of meaningful dialogue that allows the company to benefit from both the relative independence of the former and the expertise of

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the latter. This sounds straightforward enough, but as anyone who’s ever worked in a real business knows, actually doing it is a rather tall order. Then again, who says the CEO’s job is supposed to be easy?

Andrew Likierman is the dean of London Business School, a nonexecutive director of Barclays Bank, and the chairman of the UK’s National Audit Office.

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Finance Quiz How Much Have You Learned?

Now it’s time to retake the finance quiz that appeared in the first part of this guide. It will give you an indication of what you’ve learned and what you might need to study up on. The answers follow.

1. The income statement measures: a. Profitability b. Assets and liabilities c. Cash d. All of the above

2. A sale on credit ends up on the income statement as revenue and as what on the balance sheet? a. Accounts receivable b. Long-term assets c. Short-term liability d. Operating cash flow

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3. What happens when a company is profitable but collection lags behind payments to vendors? a. The company is OK because profits always become cash b. The company stands a good chance of running out of money c. The company needs to shift its focus to EBIT d. The cash flow statement will show a negative bottom line

4. How is gross profit margin calculated? a. COGS/revenue b. Gross profit/net profit c. Gross profit/revenue d. Sales/gross profit

5. Which statement summarizes changes to parts of the balance sheet? a. Income statement b. Cash flow statement c. Neither of the above d. Both of the above

6. EBIT is an important measure in companies because: a. It is free cash flow b. It subtracts interest and taxes from net income to get a truer picture of the business c. It indicates the profitability of a company’s operations d. It is the key measure of earnings before indirect costs and transfers

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Finance Quiz: How Much Have You Learned?

7. Operating expenses include all of the following except: a. Advertising costs b. Administrative salaries c. Expensed research and development costs d. Delivery of raw materials

8. Owners’ equity in a company increases when the company: a. Increases its assets with debt b. Decreases its debt by paying off loans with company cash c. Increases its profit d. All of the above

9. A company has more cash today when: a. Customers pay their bills sooner b. Accounts receivable increases c. Profit increases d. Retained earnings increases

10. Which of the following is not part of working capital? a. Accounts receivable b. Inventory c. Property, plant, and equipment d. All of the above are part of working capital

Answers to the Finance Quiz 1. a. Profitability is measured by the income statement. Assets and liabilities are measured

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by the balance sheet, cash by the cash flow statement. 2. a. A sale on credit means that the customer owes you for the amount of the purchase. That debt is an asset, and it appears under accounts receivable on the balance sheet. 3. b. If you’re not collecting receivables as fast as you are paying vendors, you will need more and more working capital as the company grows—and if you can’t find it, you will run out of money. EBIT is just another measure of profitability, which doesn’t determine cash flow. And the cash flow statement’s bottom line depends on many factors, not just receivables and payables. 4. c. Gross profit is revenue minus COGS (cost of goods sold). Gross profit margin shows gross profit as a percentage of revenue, so just divide gross profit by revenue and convert to a percent. 5. d. On the income statement, net profit adds to the retained earnings line on the balance sheet after dividends are paid. On the cash flow statement, the line items reflect cash-related differences between two balance sheets. Both statements thus summarize changes to the balance sheet. 6. c. EBIT, or operating profit, shows a company’s profitability without regard to how the

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Finance Quiz: How Much Have You Learned?

company is financed (which affects interest expense) or the taxes it may owe. EBIT is not free cash flow. And it actually adds back in interest and taxes to get that picture of operating profitability. EBIT does not stand for earnings before indirect costs and transfers. 7. d. Delivery of raw materials is part of COGS (cost of goods sold), not operating expenses. Advertising, administrative, and expensed research and development costs are all operating expenses. 8. c. One element of owners’ equity is retained earnings, meaning profits not distributed to shareholders as dividends. Increasing profits helps to build owners’ equity through the retained earnings line. Using cash to pay debt or increasing debt and adding assets with that debt does not change equity. 9. a. It isn’t until the customer actually pays its bill that a company’s cash increases. Accounts receivable indicates future cash flows, not current ones. Neither profit nor retained earnings affects how soon a company gets its cash. 10. c. Working capital is current assets minus current liabilities. Property, plant, and equipment is not a current asset; rather, it represents long-term investments in the business.

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Glossary

Accounts Payable. A category of balance-sheet liabilities representing funds owed by the company to suppliers and other short-term creditors.

Accounts Receivable. A category of balance-sheet assets representing funds owed to the company by customers and others.

Accrual Accounting. An accounting practice that records transactions as they occur, whether or not cash trades hands.

Allocations. See indirect costs. Assets. The balance-sheet items in which a company invests so that it can conduct business. Examples include cash and financial instruments, inventories of raw materials and finished goods, land, buildings, and equipment.

Adapted from Harvard Business Essentials: Finance for Managers (product #8768), Harvard Business Review Press, 2002

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Glossary

Assets also include funds owed to the company by customers and others—an asset category referred to as accounts receivable.

Balance Sheet. A financial statement that describes the assets owned by the business and how those assets are financed—with the funds of creditors (liabilities), the equity of the owners, or both. Also known as the statement of financial position.

Book Value of Shareholder Equity. A balance-sheet valuation method that calculates value as total assets less total liabilities.

Breakeven Analysis. A form of analysis that helps determine how much (or how much more) a company needs to sell in order to pay for the fixed investment—in other words, at what point the company will break even on its cash flow.

Budget. A document that translates strategic plans into measurable quantities that express the expected resources required and anticipated returns over a certain period. It functions as an action plan and presents the estimated future financial statements of the organization.

Burden. See indirect costs. Cash Flow Statement. A financial statement that details the reasons for changes in cash (and cash equivalents) during the accounting period. More specifically, it reflects all changes in cash relating to operating activities, investments, and financing.

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Glossary

Common Stock. A security that represents a fractional ownership interest in the corporation that issued it.

Contribution Margin. In cost accounting, the contribution by each unit of production to overhead and profits, or net revenue less direct cost per unit.

Cost/Benefit Analysis. A form of analysis that evaluates whether, over a given time frame, the benefits of a new investment or business opportunity will outweigh the associated costs.

Cost of Capital. The opportunity cost that shareholders and lenders could earn on their capital if they invested in the next-best opportunity available to them at the same level of risk, calculated as the weighted average cost of the organization’s different sources of capital.

Cost of Goods Sold (COGS). On the income statement, what it costs a company to produce its goods and services. This figure at a minimum includes raw materials and direct labor costs.

Current Assets. Assets that are most easily converted to cash: cash, cash equivalents such as certificates of deposit and U.S. Treasury bills, receivables, and inventory. Under generally accepted accounting principles, current assets are those that can be converted into cash within one year.

Current Liabilities. Liabilities that must be paid in a year or less; these typically include short-term loans, salaries, income taxes, and accounts payable.

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Glossary

Current Ratio. Current assets divided by current liabilities. This ratio is often used as a measure of a company’s ability to meet currently maturing obligations.

Days Receivables Outstanding. The average time it takes to collect on sales.

Debt Ratio. The ratio of debt to either assets or equity in a company’s financial structure.

Depreciation. A noncash charge that effectively reduces the balance sheet value of an asset over its useful life.

Direct Costs. Cost incurred as a direct consequence of producing a good or service—as opposed to overhead, or indirect costs.

Discounted Cash Flow (DCF). A method based on timevalue-of-money concepts that calculates value by finding the present value of a business’s future cash flows.

Discount Rate. The annual rate, expressed as a percentage, at which a future payment or series of payments is reduced to its present value.

Dividend. A distribution of after-tax corporate earnings to shareholders.

Earnings Before Interest and Taxes (EBIT). See operating earnings.

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Glossary

Earnings Per Share (EPS). A company’s net earnings divided by the total number of shares outstanding.

Economic Value Added (EVA). A measure of real economic profit calculated as net operating income after tax less the cost of the capital employed to obtain it.

Equity Book Value. The value of total assets less total liabilities.

Financial Leverage. The degree to which borrowed money is used in acquiring assets. A corporation is said to be highly leveraged when its balance-sheet debt is much greater than its owners’ equity.

Fixed Assets. Assets that are difficult to convert to cash— for example, buildings and equipment. Sometimes called plant assets.

Future Value (FV). The amount to which a present value, or series of payments, will increase over a specific period at a specific compounding rate.

Generally Accepted Accounting Principles (GAAP). In the United States, a body of conventions, rules, and procedures sanctioned by the Financial Accounting Standards Board, an independent, self-regulating body. All entities must follow GAAP in accounting for transactions and representing their results in financial statements.

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Glossary

Goodwill. If a company has purchased another company for a price in excess of the fair market value of its assets, that “goodwill” is recorded on the balance sheet as an asset. Goodwill may represent intangible things such as the acquired company’s reputation, its customer list, its brand names, and its patents.

Gross Profit Margin. Sales revenue less cost of goods sold, expressed as a percentage of revenue. The roughest measure of profitability. Also referred to as gross margin.

Hurdle Rate. The minimal rate of return that all investments for a particular enterprise must achieve.

Income Statement. A financial statement that indicates the cumulative financial results of operations over a specified period. Also referred to as the profit-and-loss statement, or P&L.

Indirect Costs. Costs that cannot be attributed to the production of any particular unit of output. Often referred to as overhead, allocations, or burden.

Interest Coverage Ratio. Earnings before interest and taxes divided by interest expense. Creditors use this ratio to gauge a company’s ability to make future interest payments in the face of fluctuating operating results.

Internal Rate of Return (IRR). The discount rate at which the net present value of an investment equals zero.

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Glossary

Inventory. The supplies, raw materials, components, and so forth, that a company uses in its operations. It also includes work in process—goods in various stages of production—as well as finished goods waiting to be sold and/or shipped.

Inventory Turnover. Cost of goods sold divided by average inventory.

Liability. A claim against a company’s assets. Liquidity. The extent to which a company’s assets can readily be turned into cash for meeting incoming obligations.

Net Earnings. See net income. Net Income. The “bottom line” of the income statement. Net income is revenues less expenses less taxes. Also referred to as net earnings or net profits.

Net Present Value (NPV). The present value of one or more future cash flows less any initial investment costs.

Net Profits. See net income. Net Working Capital. Current assets less current liabilities; the amount of money a company has tied up in short-term operating activities.

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Glossary

Operating Budget. A projected target for performance in revenues, expenses, and operating income.

Operating Earnings. On the income statement, gross margin less operating expenses and depreciation. Often called earnings before interest and taxes, or EBIT.

Operating Expense. On the income statement, a category that includes administrative expenses, employee salaries, rents, sales and marketing costs, and other costs of business not directly attributed to the cost of manufacturing a product.

Operating Leverage. The extent to which a company’s operating costs are fixed versus variable. For example, a company that relies heavily on machinery and uses very few workers to produce its goods has a high operating leverage.

Operating Margin. A financial ratio used by many analysts to gauge the profitability of a company’s operating activities. It is calculated as earnings before interest and taxes (EBIT) divided by net sales.

Overhead. See indirect costs. Owners’ Equity. What, if anything, is left over after total liabilities are deducted from total assets. Owners’ equity is the sum of capital contributed by owners plus the company’s total retained earnings over time. Also known as shareholders’ equity.

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Glossary

Payback Period. The length of time it will take a particular investment to pay for itself.

Plant Assets. See fixed assets. Present Value (PV). The monetary value today of a future payment discounted at some annual compound interest rate.

Profit-and-Loss Statement (P&L). See income statement. Profit Margin. The percentage of every dollar of sales that makes it to the bottom line. Profit margin is net income after tax divided by net sales. Sometimes called return on sales, or ROS.

Retained Earnings. Annual net profits left after payment of dividends that accumulate on a company’s balance sheet.

Return on Assets (ROA). Relates net income to the company’s total asset base and is calculated as net income divided by total assets.

Return on Equity (ROE). Relates net income to the amount invested by shareholders (both initially and through retained earnings). It is a measure of the productivity of the shareholders’ stake in the business and is calculated as net income divided by shareholders’ equity.

Return on Sales (ROS). See profit margin.

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Glossary

Revenue. The amount of money that results from selling products or services to customers.

Shareholders’ Equity. See owners’ equity. Solvency. A situation in which a company’s assets outweigh its liabilities—that is, owners’ equity is positive.

Statement of Financial Position. See balance sheet. Variance. The difference between actual and expected results in the budget. A variance can be favorable, when the actual results are better than expected, or unfavorable, when the actual results are worse than expected.

Working Capital. See net working capital.

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Index

AAA ratings, 150 ABB, 134–135 accounting practices, 129–130 accounting return on investment, 115–117 accounts payable, 10, 36 accounts receivable, 10, 35–36, 84, 87–90 accumulated depreciation, 12 acid test, 47–48 Addleshaw Booth, 149 Alcoa Packaging Machinery, 38–39 annual reports, 29 Apple, 17, 138 assets, 10–13 current, 12, 96 fixed, 12 human, 15 value of, 131 velocity of, 36–37 asset turnover, 46, 64 auto industry, 137 Avon Products, 142 Baghai, Mehrdad, 147 Bain & Company, 65, 134 balance sheets, 9, 10–20, 30, 41, 133 assets on, 10–13

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historical cost and, 13, 15–16 liabilities on, 10, 11, 13 owner’s equity on, 13 sample, 14 use of, 16–20 Bank of America, 129 Barron’s, 97, 100, 101 benchmarks, 141 benefits, nonquantifiable, 122–123 Berman, Karen, 2 big-picture perspective, 35, 37–39 Blenko, Marcia, 134 book value, 10, 12, 132 BP, 128, 133–134 brands, 59–60 breakeven analysis, 105, 109, 118–120 budgets, management of, 24 Business Literacy Institute, 2, 5 Canon, 137–138 capital contributed, 13 human, 15 paid-in, 13 working, 16–17, 87–88, 92–93, 95–103 capital expenditures, 74

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Index

cash change in, 28 importance of, 83–86 net, 73 profit and, 73–82 cash flow, 34–36, 73–86 discounted, 105, 109–110 modeling, 106–111 cash flow statements, 9, 25–29, 30, 41, 133 components of, 26–28 importance of understanding, 83–86 sample, 26 use of, 29 cash generation, 34–36 Charan, Ram, 33–39 chief executive officers (CEOs), 143 Christensen, Clayton M., 138 Clifford Chance, 146, 147 competitive advantage, 49 competitors, 136–137, 141 consolidation, of production, 60–61 contributed capital, 13 contribution margin, 119–120 cost/benefit analysis, 114–115 cost of goods sold (COGS), 21 costs fixed, 118 nonquantifiable, 122–123 shared, 58 variable, 118–119 credit, 85 credit managers, 89–90 current assets, 12, 96 current liabilities, 13, 96 current ratio, 47 customer attitudes, 135–136, 141–142, 149

customer credit, 85, 89–90 customer focus, 64–65, 68–71 customer segmentation, 65 customer service, 88–89 days in inventory (DII), 47, 51 days payable outstanding (DPO), 46–47 days sales outstanding (DSO), 46, 87–90 DCF. See discounted cash flow (DCF) debt-to-equity ratio, 19–20, 48–49 decision making, 82, 143 Dell Computer, 17, 37 depreciation, 12, 22, 27, 130 DII. See days in inventory (DII) discounted cash flow (DCF), 105, 109–110 disruptive innovation, 138 Dow Corning, 65 Dow Jones & Company, 96–103 Dow Jones Financial Information Services, 99 DowVision, 98–99 DPO. See days payable outstanding (DPO) earnings net, 21 operating, 22 retained, 13 earnings before interest and taxes (EBIT), 22, 45 earnings per share (EPS), 53–54 economic order quantity (EOQ), 91 economic value added (EVA), 54 Effron, Marc, 142 employee engagement, 134

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Index

employee satisfaction, 145 engineers, 92 Enterprise Rent-A-Car, 141 EPS. See earnings per share (EPS) equal risk, 117 EVA. See economic value added (EVA) expenses, 21 deferring, 84 operating, 22, 24 revenue and, 74 Factiva, 99, 100, 101 Finance Quiz, 5–7, 153–157 financial health, measures of, 43–55 financial leverage, 18–19 financial ratios, 43 earnings per share (EPS), 53–54 leverage ratios, 48–49, 51 limits of, 144–146 liquidity ratios, 47–49, 51 operating ratios, 45–47, 50–51 price-to-earnings (P/E) ratio, 54 profitability ratios, 44–45, 50 financial statements, 9–31 analysis of, 43–55 balance sheet, 9, 10–20, 30, 41 cash flow statement, 9, 25–29, 30, 41 income statement, 9, 20–25, 30, 41 limits of, 125, 127–138 manipulation of, 129–130 translating into words, 53 where to find, 29, 31 financial structure, 19–20

financing activities, 26–28 firms comparison of, 52 financial structure of, 19–20 nonfinancial health of, 133–135 solvent, 28 upstarts, 136–137 valuation of, 51–54 fixed assets, 12 fixed costs, 118 Form 10-K, 31 fraud, 129 fundamental accounting equation, 11 General Electric (GE), 37, 131–132 goodwill, 12–13, 15 Goodyear Tire & Rubber Company, 68–71 Gottfredson, Mark, 65 gross profit, 21 gross profit margin, 45 Groupe Danone, 66–68 growth, 34 growth indicators, 54 Harper, Garry, 38–39 historical cost, 13, 15–16 Humana, 142–143 human capital, 15 income See also profit net, 20, 21 income statements, 9, 20–25, 30, 41, 133 components of, 20–22 multiyear comparisons, 22–23, 25

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Index

income statements (continued) vs. ROI analysis, 106, 108 sample, 21 use of, 23–25 intangibles, 12–13, 15, 132 interest, 22 interest coverage, 48 internal rate of return (IRR), 105, 110–111 inventory, 16–17, 84 inventory days, 47, 51 inventory management, 90–93 inventory turns, 37 investing activities, 26, 28 IRR. See internal rate of return (IRR) just-in-time inventory management, 91 Knight, Joe, 2 Kremer, Chuck, 36, 37 Kroeger, Thomas, 38 laws of business, 33–39 lean manufacturing, 90–91 LEGO, 136 leverage financial, 18–19 operating, 18, 120–121 leverage ratios, 48–49, 51 liabilities, 10, 11, 13, 96 current, 13, 96 long-term, 13 liquidity ratios, 47–48, 49, 51 long-term liabilities, 13 managerial decision making, 143 Mankins, Michael, 134

market capitalization (market cap), 131–132 market value, 15–16 MarketWatch.com, 99–100 “mark to market” accounting, 131 Merrill Lynch, 127, 131 Meyer, Danny, 142 moneymaking, measures of, 34–37 Morgan Stanley, 147 multiperiod income statement, 22–23, 25 Murdoch, Rupert, 101–102 Navistar, 68 negative working capital, 96–103 net cash, 73 net earnings, 21 net income, 20, 21 net income per employee, 55 net present value (NPV), 110 net profit, 21, 27, 36, 41, 73 net profit margin, 44–45 Net Promoter Score (NPS), 144–145 net value, 54 net working capital, 16 net worth, 10 NewsPlus, 99 New Talent Management Network, 142 New York Times, 102 Nokia, 138 nonfinancial health, 133–135 nonquantifiable benefits/costs, 122–123 North American Tire (NAT), 69–71

172

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Index

NPV. See net present value (NPV) Office Depot, 38 operating activities, 26–28 operating cash flow, 73 operating earnings, 22 operating expenses, 22, 24 operating leverage, 18, 120–121 operating margin, 45 operating profit, 22 operating ratios, 45–47, 50–51 operations, 26 operations managers, 88 owner, thinking like an, 37–39 owner’s equity, 10, 11, 13, 131, 132 paid-in capital, 13 Parmalat, 129 past-year comparisons, 142–144 payback period, 109, 117 P/E ratio, 54 performance measurement, 139–151 performance tracking, 123–124 performance trends, 49–50 personal computers (PCs), 17 plant managers, 93 price-to-earnings ratio (P/E), 54 production, consolidation of, 60–61 production departments, 92 productivity measures, 55 product mix, 59–60, 64 profit cash and, 73–82 gross, 21 net, 21, 27, 36, 41, 73 operating, 22

profitability, 44 analysis of, 58–59 employee satisfaction and, 145 increasing, 57–61 profitability ratios, 44–45, 50 profit and loss (P&L), management of, 24–25 profit and loss statement (P&L). See income statements profit margin, 20, 35 gross, 45 net, 44–45 property, plant, and equipment, 12 The Publications Library (Dow Jones), 99 quarterly reports, 29 quick ratio, 47–48 ratio analysis, 43–51 ratios. See financial ratios receivable days, 46 research and development (R&D) managers, 88 retained earnings, 13 return on assets (ROA), 36– 37, 44 return on equity (ROE), 44 return on invested capital (ROIC), 63–64 return on investment (ROI), 105–111, 115–117, 145–146 return on sales (ROS), 44– 45, 50 revenues, 20 generation of, 23 recording of, 73–74 risk, 117

173

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Index

ROA. See return on assets (ROA) ROE. See return on equity (ROE) Rogers, Paul, 134 ROI. See return on investment (ROI) ROIC. See return on invested capital (ROIC) ROS. See return on sales (ROS) Royal Dutch Shell, 147 safety issues, 133–134 sales, 20 growth, 34 recording of, 73–74 sales, expenses, and assets (SEA), 36, 37 salespeople, 91–92 sales per employee, 55 Schaubert, Steve, 65 Sears, 145 Securities and Exchange Commission (SEC), 29 shared costs, 58 Slim, Carlos, 102 SoftBank, 147–148

solvency, 28 Sorkin, Andrew Ross, 2 stock-keeping units (SKUs), 58–60, 64 streamlining, 57–61 supply chain management, 63–71 taxes, 22 10-K reports, 31 top executives, 143 trends, 52 upstarts, 137–138 valuation, 51–54, 131–132 variable costs, 118–119 velocity, 36–37 Wall Street Journal, 96–99, 101 Welch, Jack, 33 working capital, 16–17, 87–88, 92–93, 95–103 Xerox, 137–138 Zannino, Rich, 100

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Smarter than the average guide

Hbr Guide to Project Management

Motivate your team Avoid scope creep Deliver results

HBR Guide to Project Management

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Harvard Business Review Guides Arm yourself with the advice you need to succeed on the job, from the most trusted brand in business. Packed with how-to essentials from leading experts, the HBR Guides provide smart answers to your most pressing work challenges.

The titles include: HBR Guide to Better Business Writing HBR Guide to Finance Basics for Managers HBR Guide to Getting the Mentoring You Need HBR Guide to Getting the Right Job HBR Guide to Getting the Right Work Done HBR Guide to Giving Effective Feedback HBR Guide to Making Every Meeting Matter HBR Guide to Managing Stress HBR Guide to Managing Up and Across HBR Guide to Persuasive Presentations HBR Guide to Project Management

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HBR Guide to Project Management

HARVARD BUSINESS REVIEW PRESS Boston, Massachusetts

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Copyright 2012 Harvard Business School Publishing Corporation All rights reserved No part of this publication may be reproduced, stored in or introduced into a retrieval system, or transmitted, in any form, or by any means (electronic, mechanical, photocopying, recording, or otherwise), without the prior permission of the publisher. Requests for permission should be directed to [email protected], or mailed to Permissions, Harvard Business School Publishing, 60 Harvard Way, Boston, Massachusetts 02163. Library of Congress Cataloging-in-Publication Data HBR’s guide to project management. p. cm. ISBN 978-1-4221-8729-6 (alk. paper) 1. Project management. I. Harvard business review. II. Title: Guide to project management. HD69.P75H394 2013 658.4′04—dc23 2012026957

Find more digital content or join the discussion on www.hbr.org. The web addresses referenced and linked in this book were live and correct at the time of the book’s publication but may be subject to change.

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What You’ll Learn

You’ve been asked to lead a project. You appreciate the vote of confidence, but are you panicking because you haven’t a clue where to begin? Do you worry that stakeholders will tug you in a million directions, making it impossible to set clear goals, let alone deliver the goods on time and on budget? How will you know when to stick to your original plan and when to be flexible? And how will you keep all your team members excited about this project—when they have so many other pressures on them? This guide will give you the confidence and tools you need to manage projects effectively. You’ll get better at: • Choosing the right team and keeping it humming • Avoiding “scope creep” • Zeroing in on critical tasks and mapping out a logical sequence • Making heads or tails of Gantt and PERT charts • Getting disruptive team members on board

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What You’ll Learn

• Keeping stakeholders in the loop • Gauging your project’s success • Deciding when to cut bait • Capturing—and using—lessons learned

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Contents

Overview 1. The Four Phases of Project Management

3

What’s involved in planning, build-up, implementation, and closeout—and how these processes overlap

2. The Cast of Characters

31

Who’s who in project management

Phase 1: PLANNING 3. A Written Charter

41

Your marching orders

4. Dealing with a Project’s “Fuzzy Front End”

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You can’t eliminate uncertainty in the early stages of a complex project—but you can manage it. BY LOREN GARY

5. Performing a Project Premortem

53

Learn from your project while it’s still alive and well. BY GARY KLEIN

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6. Will Project Creep Cost You—or Create Value?

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Set strict limits on scope, but be flexible when major opportunities arise. BY LOREN GARY

Phase 2: BUILD-UP 7. Setting Priorities Before Starting Your Project

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Three steps for staying on track BY RON ASHKENAS

8. Boost Productivity with Time-Boxing

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Tips for getting your team’s calendars—and yours—under control BY MELISSA RAFFONI

9. Scheduling the Work

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Put the horse before the cart.

10. HBR Case Study: A Rush to Failure?

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When does speed trump quality? BY TOM CROSS

11. Getting Your Project Off on the Right Foot

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Set your project up for success with a wellplanned launch.

12. The Discipline of Teams

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Mutual accountability leads to astonishing results. BY JON R. KATZENBACH AND DOUGLAS K. SMITH

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Phase 3: IMPLEMENTATION 13. Effective Project Meetings

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Run your meetings well, and infuse your project with energy and direction.

14. The Adaptive Approach to Project Management 117 What to do when your usual decision tools cease to be useful in the face of uncertainty

15. Why Good Projects Fail Anyway

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The risks that come with big projects—and how to manage them BY NADIM F. MATTA AND RONALD N. ASHKENAS

16. Monitoring and Controlling Your Project

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Don’t be afraid to revise your plan. BY RAY SHEEN

17. Managing People Problems on Your Team

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Make sure people stay on task, pull their weight, work together, and meet quality standards.

18. The Tools of Cooperation and Change

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What to do when people disagree on goals, how to achieve them, or both BY CLAYTON M. CHRISTENSEN, MATT MARX, AND HOWARD H. STEVENSON

19. Don’t Throw Good Money (or Time) After Bad

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How to avoid chasing after sunk costs BY JIMMY GUTERMAN

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Phase 4: CLOSEOUT 20. Handing off Authority and Control

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Gauge your success before wrapping things up. BY RAY SHEEN

21. Capturing Lessons Learned

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Four steps to an effective after-action review BY RAY SHEEN

Glossary

163

Index

167

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Overview

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Chapter 1

The Four Phases of Project Management Whether you’re in charge of developing a website, designing a car, moving a department to a new facility, updating an information system, or just about any other project (large or small), you’ll go through the same four phases: planning, build-up, implementation, and closeout. Even though the phases have distinct qualities, they overlap. For example, you’ll typically begin planning with a ballpark budget figure and an estimated completion date. Once you’re in the build-up and implementation phases, you’ll define and begin to execute the details of the project plan. That will give you new information, so you’ll revise your budget and end date—in other words, do more planning—according to your clearer understanding of the big picture.

Adapted from Pocket Mentor: Managing Projects (product #1878), Harvard Business Review Press, 2006

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Overview

Here’s a chart that outlines the activities of each phase, plus the skills and tools you may need for doing the work: PROJECT PHASES Planning

Build-up

Implementation

Closeout

Determine the real problem to solve

Assemble your team

Monitor and control process and budget

Evaluate project performance

Identify stakeholders

Plan assignments

Report progress

Close the project

Define project objectives

Create the schedule

Hold weekly team meetings

Debrief with the team

Determine scope, resources, and major tasks

Hold a kickoff meeting

Manage problems

Develop a postevaluation report

Prepare for tradeoffs

Develop a budget

ACTIVITIES

KEY SKILLS Task analysis

Process analysis

Supervising

Follow-through

Planning

Team building

Leading and motivating

Planning

Cost-benefit analysis of options

Delegating

Communication

Communication

Negotiating

Conflict management

Recruiting and hiring

Problem solving

Communication

TOOLS Work Breakdown Structure

Scheduling tools (CPM, PERT, Gantt)

Post-evaluation report: analysis and lessons learned

Planning: How to Map Out a Project When people think of project planning, their minds tend to jump immediately to scheduling—but you won’t even

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get to that part until the build-up phase. Planning is really about defining fundamentals: what problem needs solving, who will be involved, and what will be done.

Determine the real problem to solve Before you begin, take time to pinpoint what issue the project is actually supposed to fix. It’s not always obvious. Say the CIO at your company has asked you, an IT manager, to develop a new database and data entry system. You may be eager to jump right into the project to tackle problems you have struggled with firsthand. But will that solve the company’s problem? To increase the project’s chances of success, you must look beyond the symptoms you have observed—“We can’t get the data out fast enough” and “I have to sift through four different reports just to compile an update on my clients’ recent activity”—to find the underlying issues the organization is trying to address. Before designing the database, you should ask what type of data is required, what will be done with it, how soon a fix is needed, and so on. If you don’t, you’ll run the risk of wasting time and money by creating a solution that is too simplistic, too complicated, or too late—or one that doesn’t do what users need it to do.

Identify the stakeholders The real problem will become even clearer once you figure out who all your stakeholders are—that is, which functions or people might be affected by the project’s activities or outcomes, who will contribute resources (people, space, time, tools, and money), and who will use and

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Overview

benefit from the project’s output. They will work with you to spell out exactly what success on the project means. Have them sign off on what they expect at the end of the project and what they are willing to contribute to it. And if the stakeholders change midstream, be prepared not only to respond to the new players but also to include all the others in any decision to redirect the project. Whether you’re managing a project in a corporation or working as an independent consultant, it’s critical to have the support of the people you’re working for. They may take a blue-sky view and demand an enormous amount of work within an unrealistic time period or expect you to perform miracles with inadequate resources or staffing. As the project manager, you’ll need to make sure the requirements and resources line up fairly evenly, or you will set yourself up for failure.

Define project objectives One of your most challenging planning tasks is to meld stakeholders’ various expectations into a coherent and manageable set of goals. The project’s success will be measured by how well you meet those goals. The more explicitly you state them at the outset, the less disagreement you will face later about whether you have met expectations. In the planning phase, however, much is still in flux, so you’ll revise your objectives later on, as you gather information about what you need to achieve. When defining objectives, think SMART. They should be: • Specific • Measurable 6

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• Action-oriented • Realistic • Time-limited Suppose your HR department has been tasked with identifying potential new providers for your company’s health benefits plan because the current ones aren’t delivering the level of service they should given how much money employees have to pay for them. The project’s SMART objectives may be to: 1. Survey at least six providers that meet the department’s minimum threshold criteria for service quality. 2. Recommend , at the June board of directors’ meeting, the three that offer the best and broadest coverage at a cost that is at least 10% less than the company’s current per-employee contribution. Keep the following factors in mind as you define your project’s objectives: • Quality. Identify quality standards, and determine how to measure and satisfy them. • Organization. Calibrate goals depending on the people and other resources you have available. • Communication. Determine what information each stakeholder needs and how to deliver it. 7

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Overview

Determine scope, resources, and major tasks Many projects fail either because they bite off more than they can chew and thus grossly underestimate time and money or because a significant part of the work has been overlooked. One tool that can help you avoid these problems is the Work Breakdown Structure (WBS), which aids in the process of determining scope and tasks and developing estimates. (See the sample later in this chapter.) The underlying concept is to subdivide complex activities into their most manageable units. To create a WBS: • Ask, “What will have to be done in order to accomplish X?” • Continue to ask this question until your answer is broken down into tasks that cannot be subdivided further. • Estimate how long it will take to complete these tasks and how much they will cost in terms of dollars and person-hours. A WBS typically consists of three to six levels of subdivided activities. The more complex the project, the more levels it will have. As a general rule, you shouldn’t have more than 20—and only an enormous project would require that many. Here in the planning phase, don’t worry about the sequence of activities. You will take care of scheduling in

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the build-up phase. Rather, use the WBS to create the framework that you’ll fill in once you have a better sense of your staff, budget, and time constraints. Padding estimates is an acceptable way to reduce risk, but do it openly and communicate your reasons to the stakeholders. As a result of your thoughtful planning, you’ll be able to rough out an estimate of how many people—with what skills—you’ll need for the project. You’ll also have a good idea of how long the project will take.

Prepare for trade-offs Time, cost, and quality are the three related variables that typically dictate what you can achieve.

Quality = Time + Cost Change any of these variables, and you change your outcome. Of course, such alterations often occur in the middle of a project. If your time frame for developing a new database management system is suddenly cut in half, for instance, you will need to either employ twice the number of people or be satisfied with a system that isn’t as robust as originally planned. Don’t let bells and whistles get in the way of mission-critical activities. The key is to establish a level of quality that meets your stakeholders’ needs. Knowing from the start which variable is most important to each stakeholder will help you make the right changes along the way. It’s your responsibility to keep everyone informed of any tweaks and tell them what the consequences will be in terms of time, cost, and quality.

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Overview

WORK BREAKDOWN STRUCTURE Sample Planning Document Develop a Work Breakdown Structure (WBS) to ensure that you do not overlook a significant part of a complex activity or underestimate the time and money needed to complete the work. Use multiple pages as needed. DESCRIBE THE OVERALL PROJECT: The overall project will migrate 3 Web servers and databases to a new physical data center. The project requires that 5 new servers be provisioned in the new data center: these servers will mirror the production servers existing in the old data center. The new servers will be built to the same specifications as the old ones; they will run the same application and have the same content. Once implemented, the new equipment will be tested to confirm functionality. The sites will have a cutover and “go live” date. Finally, the old equipment will be decommissioned and reabsorbed into inventory.

MAJOR TASK Obtain equipment.

Level 1 Sub Tasks Purchase 3 Web servers and 2 databases. Ship equipment to new data center.

Level 2 Sub Tasks Cut P.O. and order servers. Alert data center that equipment is slated for arrival.

Sub Task Duration 7 days

MAJOR TASK Provision and implement equipment.

Level 1 Sub Tasks Physically install hardware. Load operating systems.

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The Four Phases of Project Management

Load applications. Mirror content to new servers.

Level 2 Sub Tasks Rack and cable new equipment in data center and ensure physical and network connectivity. Load base-level operating systems for Web and database servers. Load application level software, including Web server software, database applications, and any required dependencies. Copy configurations from production sites, transfer to new servers, and load appropriately.

Sub Task Duration 8 days

MAJOR TASK Test equipment.

Level 1 Sub Tasks Test machines.

Level 2 Sub Tasks Ensure network connectivity, as well as Web and database access functionality and integrity.

Sub Task Duration 2 days

MAJOR TASK Go live with new equipment.

Level 1 Sub Tasks Cutover to new production site. Data and content integrity check.

(continued)

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Overview

MAJOR TASK (CONTINUED) Level 2 Sub Tasks Switch Web and database access to new sites. Run a series of predetermined tests to ensure that data is accurate and that any updates since mirroring have been captured and applied as necessary.

Sub Task Duration 2 days

MAJOR TASK Test again.

Level 1 Sub Tasks Let sites burn in for 24 hours and check integrity once again.

Level 2 Sub Tasks Run series of tests once more to ensure that updates and logging are functioning correctly.

Sub Task Duration 1 day

MAJOR TASK Decommission old equipment.

Level 1 Sub Tasks Remove equipment from data center. Reabsorb equipment for future use.

Level 2 Sub Tasks De-install equipment; erase software and content. Ship equipment back to inventory.

Sub Task Duration 2 days

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The Four Phases of Project Management

Build-Up: How to Get the Project Going In the build-up phase, you bring your team together. Time estimates become schedules. Cost estimates become budgets. You gather your resources. You get commitments, and you make them.

Assemble your team Your first task in this phase is to assess the skills needed for the project so you can get the right people on board. This assessment flows directly from the Work Breakdown Structure you did during the planning phase, in which you developed your best estimate of the necessary tasks and activities. You may need to bring in people— either temporary workers or employees from other parts of the organization—who have certain skills. Don’t forget to budget time and money for training to cover any gaps you can’t fill with people who are already up to speed.

Plan assignments If you’ve built your own team, you’ve probably already decided who will do what. Or, if you’ve inherited a team but worked with the members before, you can still make the assignments yourself. But if a new, unfamiliar group is assigned to you, list the people on the team, list the skills required, and talk to each team member about her own skill set before you match people to tasks. This approach starts the process of team communication and cohesion. For example, if the project calls for a skill no one on the team possesses, members may know someone else

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Overview

who has it—or they may express interest in being trained themselves. Clearly, you can’t do everything yourself, even if you want to. After you’ve decided how you will assign tasks to team members, give each person the information and resources needed to succeed—and then back off and let your team members do their jobs. You may, as the project proceeds, have to delegate more tasks than originally anticipated. Be flexible enough to do so—without forgetting that you, as project manager, are the one who’s accountable for results. (See the sidebar “Tips for Delegating Effectively.)

Create the schedule It would be nice if you could tally up the to-dos and say, “With the resources we have, we will need this much time”—and then get exactly what you’ve asked for. But the reality is, most projects come with fixed beginning and end dates, regardless of available resources. To create a realistic schedule within those constraints, work backward from any drop-dead deadlines you know about—that is, dates that cannot be changed—to see when your deliverables must be ready. For instance, if an annual report is due for a shareholder’s meeting and you know it takes the printer two weeks, then all the final art and copy for the report must be ready to go to the printer two weeks before the meeting. Depending on the complexity of your project, you may also rely on tools such as the Critical Path Method and a Performance Evaluation and Review Technique (PERT) chart to help with the sequencing of tasks and

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a Gantt chart to map out their chronological order and duration. You’ll learn how to use these tools elsewhere in this guide. For now, though, keep in mind the “working backward” rule of thumb and these basic steps for scheduling: 1. Use the Work Breakdown Structure or a similar outline to develop a list of activities or tasks, and

TIPS FOR DELEGATING EFFECTIVELY • Recognize the capabilities of your team members. • Trust your team’s ability to get the job done. • Focus on results, and let go of your need to get involved in how tasks are accomplished. • Consider delegation as a way to develop the skills of your team. • Always delegate to the lowest possible level to make the best use of staff resources. • Explain assignments clearly and provide resources needed for successful completion. • Deflect reverse delegation. Do not automatically solve problems or make decisions for your staff members. Focus on generating alternatives together.

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Overview

plot out their sequence by determining which ones are critical to achieving the desired final outcome. 2. Assign each task a deliverable—for instance, “compose rough draft of survey questions.” 3. Use deliverables to create a schedule with realistic due dates. 4. Identify bottlenecks that could upset the schedule. 5. Determine ways to remove bottlenecks, or build in extra time to get around them. 6. Establish control and communication systems for updating and revising the schedule. 7. Keep all stakeholders involved in and informed of the project’s progress and any schedule modifications.

Hold a kickoff meeting As soon as you’ve chosen your players and set the schedule, bring everyone together for a kickoff meeting. Go over the project’s plan and objectives with the group in as much detail as possible, and review the proposed time frame. Be sure to clarify roles and responsibilities. Encourage people to point out spots where problems may occur and where improvements could be made. Take all suggestions seriously—especially in areas where the team members have more experience than you do—and adjust your estimates and activities accordingly.

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Develop a budget The first question to ask when developing a budget is, “What will it take to actually do the work?” To determine your costs, break down the project into the following categories: • Personnel. Have you included all costs, both ongoing and extra, for employees and contract workers? (This is typically the largest part of a budget.) • Travel. Is everyone onsite, or will employees be brought in from other locations? • Training. Does everyone know how to use all the necessary equipment and software? Do the members of your team possess all the required skills? Will training involve travel? Will you need to teach users how to implement your project when it’s completed? • Supplies. Will your team need anything in addition to the usual computers, software, and so on? • Space. Do people have to be relocated? How much room will be required in the new space, and at what cost? Will there be ongoing maintenance expenses? • Research. Will you have to buy studies or data to support this project? How much research will your team have to perform itself? At what cost? • Capital expenditures. What expensive equipment or technical upgrades will be necessary to do the

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Overview

job? Will any capital expenditures pay for themselves? If so, how? • Overhead. What is your projected overhead expense? Is it in line with your company’s standard overhead percentage? After you’ve entered the figures from these standard categories into the budget, ask a trusted adviser what you forgot. Did you overlook insurance? Licensing fees? Costs for legal or accounting support? A budget, no matter how carefully planned, is just your best guess. Expect actual numbers to deviate from original estimates, and stay as flexible as possible within your limitations of time, quality demands, and total money available.

Implementation: How to Execute the Project It’s time to put the plan into action. The implementation phase is often the most gratifying, because work actually gets done, but it can also be the most frustrating. The details can be tedious and, at times, overwhelming.

Monitor and control process and budget Whether you have a formal project control system in place or you do your own regular check-ups, try to maintain a big-picture perspective so that you don’t become engulfed by details and petty problems. Project-monitoring software systems can help you measure your progress. No single approach works for all projects. A system that’s right for a large project can easily swamp a small one

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with paperwork, whereas a system that works for small projects won’t have enough muscle for a big one. Respond quickly to changes in data or information as they come in, and look for early signs of problems so you can initiate corrective action. Otherwise, all you are doing is monitoring, not exercising control. Make it clear to your team that your responses to problems that arise won’t do any good if you don’t receive timely information. (In most cases, the weekly updates are fine.) But don’t jump in to fix things too quickly—allow your team members to work out small problems on their own. Watch the real numbers as they roll in to ensure that they are matching the budgeted amounts. Be ready to explain why extra costs are unavoidable. Common ones that sneak up on projects include increased overtime to keep things on schedule, consultant fees to resolve unforeseen problems, and fluctuations in currency exchange rates.

Report progress Stakeholders will generally want regular updates and status reports. Consult with them to see how much information they’d like and in what format. Don’t hide or downplay problems as they come up, or you can easily transform them into crises. If you keep your stakeholders informed, they may turn out to be good resources when issues do arise.

Hold weekly team meetings When you’re immersed in project details, it’s easy to be diverted from critical activities to side paths that waste time. You and your team can stay focused by meeting

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TIPS ON CONTROLLING PROJECT SLOWDOWNS Try these approaches before accepting the inevitability of a delay in project completion: • Renegotiate with stakeholders. Discuss the possibility of increasing the budget or extending the deadline. • Use later steps to recover. Reexamine budgets and schedules to see if you can make up the time elsewhere. • Narrow the project’s scope. Can nonessential elements of the project be dropped to reduce costs and save time? • Deploy more resources. Can you put more people or machines to work? Weigh the costs against the importance of the deadline.

once a week and periodically asking yourselves what’s essential to the project’s success. Set clear agendas for your meetings. Try structuring them around production numbers, revenue goals, or whatever other metrics you’ve chosen to gauge performance. Many of your agenda items will naturally stem from targets the project has missed, met, or exceeded: For instance, you may need to discuss as a group whether to incorporate more travel into the project because you’ve

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• Accept substitution. Can you go with a less expensive or more readily available item? • Seek alternative sources. Can you get the missing item elsewhere? • Accept partial delivery. Can you keep work going if you take the items that are ready now and receive the rest of the delivery later? • Offer incentives. Can you provide bonuses or other enticements to facilitate on-time delivery? • Demand compliance. Will insisting that people do what they said they would get the desired result? This may require support from upper management. Use this tactic selectively; be careful not to damage important relationships in pursuit of your goal.

noticed a decline in productivity at a satellite office. Or you might ask the product designers on your team to continue gathering among themselves on a biweekly basis because they’ve doubled their creative output since they’ve begun doing so. Keep the momentum going by following up each week on any to-dos and connecting them with the metrics for overall performance. Also, celebrate small successes along the way—that will rekindle the team’s enthusiasm as you make progress toward your larger objectives.

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Overview

Manage problems Some problems have such far-reaching consequences that they can threaten the success of the entire project. Here are four of the biggest you’ll face: 1. Time slippage. The most common problem in project management is falling behind schedule. Delays may be unavoidable, but you can usually at least improve the situation. The first step is to recognize that you’re behind. If you’ve been monitoring the project’s progress carefully, you’ll quickly notice when schedules are being readjusted to accommodate delays or unexpected bottlenecks. 2. Scope creep. Time slippage can result from internal pressure to alter the scope of the project. When stakeholders ask for changes, it’s your job to communicate clearly to them how those changes will affect cost, time, or quality. On some projects, scope creep is an ongoing battle for the project manager. After specific milestones and budgets have been agreed upon, people may begin to see more that could be achieved. Don’t get caught up in trying to solve problems that lie beyond the established scope of your project—even ones that your company urgently needs to address. 3. Quality issues. Quality assurance plays a major role in any project’s success. Unfortunately, it sometimes gives way to deadline pressure. Don’t rush essential quality checks for the sake of the 22

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schedule. And when you examine deliverables, use the most appropriate tools—such as detailed inspections, checklists, or statistical sampling—to accept or reject them. Return or rework rejected deliverables, depending on costs. 4. People problems. These are often the most difficult challenges a project manager must confront. They can generally be avoided or handled early on if you communicate frequently with each team member. Weekly staff meetings may not be enough; daily interaction—with individual team members or with the team as a whole—may be necessary. Pay attention to small signs of emerging problems, such as a team member’s increased tension and irritability, loss of enthusiasm, or inability to make decisions. When you see signs like these, get to the heart of the problem quickly and deal with it. Don’t let it grow from a small irritant into a disaster.

Closeout: How to Handle End Matters Though some projects feel endless, they all, eventually, come to a close. How do you, as project manager, know when to make that happen? And how do you go about it?

Evaluate project performance Before closing out your project, your team needs to meet its goals (or determine, along with key stakeholders, that those goals no longer apply). Compare your progress with the scope everyone agreed on at the beginning. That 23

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POST-EVALUATION REPORT Sample Analysis and Lessons Learned Project name: Project Phoenix

Date: 5/29/200X

Present at this session: Rafael, Phil, and Carmen

PROJECT PHASE/TASK Equipment acquisition

What Worked Obtained the Web servers on time and on budget.

What Didn’t Work Logistical problems with availability of database servers—caused a delay. Expedited order that introduced additional expense.

Ways to Improve Need to order equipment earlier.

PROJECT PHASE/TASK Provision and implement equipment

What Worked Two days were recovered through the efforts of Rafael and Carmen during provisioning phase.

PROJECT PHASE/TASK Test equipment

What Worked Testing phase was successful; during testing, a bug in the database content was discovered and corrected prior to cutover.

PROJECT PHASE/TASK Go live with new equipment

What Worked Smooth cutover with minimal downtime.

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What Didn’t Work Some users were unaware that there would be a brief outage.

Ways to Improve Publicize work window to user base more aggressively.

PROJECT PHASE/TASK Test again

What Worked Tested fine.

PROJECT PHASE/TASK Decommission old equipment

What Worked Decommissioned sites and erased content successfully; reabsorbed stock into inventory.

What Didn’t Work Some confusion over serial numbers and inventory, but straightened out in the end.

Ways to Improve Check serial numbers at an earlier phase to minimize problems at the end of project.

TARGET ANALYSIS How well did the project/team do...

In achieving goals and meeting project objectives? Success: all goals were achieved.

At meeting deadlines and the final completion date? Success: met our target date.

At monitoring and staying within budget? Success: slight overrun was unavoidable.

(continued)

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TARGET ANALYSIS (CONTINUED) How well did the project/team do...

At communicating with stakeholders? Partial success: we could have done better at communicating requirements earlier to individuals involved in the phases of the project.

RESOURCES ASSESSMENT Were the allocated resources appropriate, sufficient, and efficiently used? (i.e., time, people, money) Generally, the resource allocations were appropriate. The project went slightly over budget, but was not inappropriate. The people involved had the expertise necessary to carry out the highly technical phases of the project. The time resources were appropriate as the project was completed on time with no room to spare.

LESSONS LEARNED What are the key lessons learned that can be applied to future projects? At each phase of the project, it is crucial to anticipate the next steps and to alert groups or individuals of resource requirements as early as possible in the process. By so doing, we probably could have acquired the equipment in a more timely manner and would not have had to scramble so much in the later phases to meet our target dates.

will tell you how well the project has performed—and if there’s still work to do. When you discuss your findings with your stakeholders, make sure you reach consensus with them on how “finished” the project is. Keep your scope front and center so everyone uses the same yardstick to measure success.

Close the project The steps you take to wrap things up will depend on whether your team assumes ownership of its own deliv-

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The Four Phases of Project Management

erables, hands them off to others in the organization, or must terminate the project altogether. Later in this guide, you’ll learn about these three types of closeouts and some techniques you can use to make them go smoothly. If all has gone as planned with your project, then it’s time for celebration. Even if, as is more likely, there are some rough spots along the way—the project takes longer than expected, the result is less than hoped for, or the costs overtake your estimates—it’s still important to recognize the team’s efforts and accomplishments.

Debrief with the team No matter what the outcome, make sure you have scheduled a post-evaluation—time to debrief and document the process so that the full benefits of lessons learned can be shared. The post-evaluation is an opportunity for discovery, not for criticism and blame. Team members who fear they’ll be punished for past problems may try to hide them rather than help find better ways of handling them in the future.

Develop a post-evaluation report The post-evaluation report documents all information that will be useful not only for the current team and stakeholders but also for future project managers who may use it to plan their own projects. (See the sample report in this chapter.) It should include: • Insights from the team. Which lessons identified during the debrief should be applied going forward?

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A NOTE ABOUT PROJECT MANAGEMENT OFFICES Large companies often have what’s called a Project Management Office (PMO), which does some combination of the following: • Establishes processes and templates to guide project managers in planning and execution. • Provides coaching and assistance to business leaders, project managers, and team members trying to apply the processes and templates. • Directly manages projects to achieve desired objectives. (PMOs in heavily matrixed organizations don’t usually take on this responsibility.) A PMO that’s well run helps each project team develop an appropriate plan, conduct a reasonable risk estimate, and track progress—and it allows teams room to deviate from standard procedure when it makes sense to do so.

• Future status. What will happen to the project now that it has been completed? Was it part of a larger project, or was it a self-contained entity that completed its goals? • Status of ongoing critical tasks. What is the current state of ongoing tasks that contain a high level of technical risk or are being performed by outside vendors or subcontractors?

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• Risk assessment. Could or did any risks cause financial loss, project failure, or other liabilities? • Limitations of the audit. Do you have any reason to question the validity of the post-evaluation? Is any information missing or suspect? Did anyone in the group seem to resist providing details? Even after you’ve completed your project, you can draw on the knowledge you’ve gained, the skills you’ve learned, and the relationships you’ve formed. You’ve accumulated valuable assets. The trick is to keep using them as you begin new projects.

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Chapter 2

The Cast of Characters To meet your project objectives, you need the right people on board—and they must have a clear understanding of their roles. Here’s a breakdown of who does what.

Sponsor The sponsor champions the project at the highest level in the company and gets rid of organizational obstructions. She should have the clout to communicate effectively with the CEO and key stakeholders, provide necessary resources, and approve or reject outcomes. It’s also important that she have “skin in the game”—in other words, accountability for the project’s performance.

Project Manager The project manager identifies the central problem to solve and determines, with input from the sponsor and

Adapted from Harvard Business Essentials: Managing Projects Large and Small (product #6198BC), Harvard Business Review Press, 2004

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Overview

stakeholders, how to tackle it: what the project’s objectives and scope will be and which activities will deliver the desired results. He then plans and schedules tasks, oversees day-to-day execution, and monitors progress until he evaluates performance, brings the project to a close, and captures the lessons learned. The project manager receives authority from the sponsor. In many respects, he’s like a traditional manager because he must: • Provide a framework for the project’s activities • Identify needed resources • Negotiate with higher authorities • Recruit effective participants • Set milestones • Coordinate activities • Keep the vision clear and the work on track • Make sure everyone on the team contributes and benefits • Mediate conflicts • Make sure project goals are delivered on time and on budget

Team Leader Large projects may include a team leader, who reports directly to the project manager. In small projects, the

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The Cast of Characters

project manager wears both hats. The team leader cannot act like the boss and still obtain the benefits of teambased work. Instead, he must adopt the following important roles: • Initiator. Rather than tell people what to do, the leader draws attention to actions that must be taken for team goals to be met. • Model. He uses his own behavior to shape others’ performance—by starting meetings on time, for example, and following through on betweenmeeting assignments. Leaders often rely heavily on this tactic, since they typically cannot use promotions, compensation, or threats of dismissal to influence team members. • Negotiator. He gets what he needs from resource providers by framing the project as mutually beneficial. • Listener. He gathers from the environment signals of impending trouble, employee discontent, and opportunities for gain. • Coach. He finds ways to help team members maximize their potential and achieve agreed-upon goals. Coaching opportunities are abundant within teams because the skills members eventually need are often ones they don’t already have. • Working member. In addition to providing direction, the leader must do a share of the work,

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Overview

particularly in areas where he has special competence. Ideally, he should also take on one or two of the unpleasant or unexciting jobs that no one else wants to do.

Team Members The heart of any project, and the true engine of its work, is its membership. That’s why bringing together the right people is extremely important.

Criteria for membership Although the skills needed to accomplish the work should govern team selection, keep in mind that you’re unlikely to get all the know-how you need without providing some training. Consider the following areas of proficiency: • Technical skills in a specific discipline, such as market research, finance, or software programming • Problem-solving skills enabling individuals to analyze difficult situations or impasses and to craft solutions • Interpersonal skills, particularly the ability to collaborate effectively with others—a critical aspect of team-based work • Organizational skills, including networking, communicating well with other parts of the company, and navigating the political landscape, all of which help the team get things done and avoid conflicts with operating units and their personnel

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When forming project teams, people tend to focus too narrowly on technical skills and overlook interpersonal and organizational skills, which are just as important. For instance, a brilliant programmer may thwart team progress if she is unwilling to collaborate. By contrast, an organizationally savvy person with average technical skills may be the team’s most valuable member, thanks to his ability to gather resources and enlist help from operating units. Individuals who are strong on all four skill measures are few and far between. Make the most of the talent available, and take steps to neutralize weaknesses in your group. Look for people not just with valued skills but with the potential to learn new ones. Once you identify a candidate for membership, discuss her potential contribution with the sponsor. Consult her supervisor as well, since team membership absorbs time that would otherwise go toward regular assignments. You may have to add new members and possibly bid thanks and good-bye to others over time, as tasks and needs change. One note of caution: Team members gradually develop effective patterns for working together, making decisions, and communicating. Cohesion is undermined when too many people join or exit the team.

Contributions and benefits Free riders—team members who obtain the benefits of membership without doing their share—cannot be tolerated. However, not every member has to put in the same amount of time. For example, a senior manager who must direct much of his attention to other duties may

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still add value to the project by securing resources or by building support within the organization. Just as each member must contribute to the team’s work, each should receive clear benefits: a learning experience that will pay career dividends, for instance, or a fatter paycheck or bonus. Otherwise, individuals will not participate at a high level—at least not for long. The benefits they derive from their regular jobs will absorb their attention and make your project a secondary priority.

THE PROJECT STEERING COMMITTEE Some projects have a steering committee, which consists of the sponsor and all key stakeholders. The committee’s role is to approve the charter, secure resources, and adjudicate all requests to change key project elements, such as deliverables, the schedule, and the budget. A steering committee is a good idea when different partnering companies, units, or individuals have a strong stake in the project. Because it represents these various interests, it is well positioned to sort out complicated interfirm or interdepartmental project problems. Likewise, it can be helpful if you anticipate many change requests. The downside to having a steering committee? It involves another level of oversight, and its meetings take up the time of some of the company’s most expensive employees. So don’t have a committee if you don’t need one.

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Alignment The goals of the project team and those of its individual members must align with organizational objectives. For that reason, everyone’s efforts should be coordinated through the company’s rewards system. This kind of reinforcement begins at the top, with the sponsor. Since she is accountable for the team’s success, some part of her compensation should be linked to the team’s performance. Moving down the line, the project manager and team members should likewise see their compensation affected by team outcomes. Such alignment gets everyone moving in the same direction.

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Phase 1

Planning

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Chapter 3

A Written Charter Every project should have a charter that spells out the nature and scope of the work and management’s expectations for results. A charter is a concise written document containing some or all of the following: • Name of the project’s sponsor • Project’s benefits to the organization • Brief description of the objectives • Expected time frame • Budget and resources available • Project manager’s authority • Sponsor’s signature Creating a charter forces senior managers to clearly articulate what the project should do. Consider this example:

Adapted from Harvard Business Essentials: Managing Projects Large and Small (product #6211BC), Harvard Business Review Press, 2004

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Phil was the sponsor of his company’s effort to reengineer its order fulfillment and customer service operations. As an outspoken critic of these functions, he was the right person for the job. He had long been dissatisfied with the time it took to fill orders and with the company’s mediocre customer service, and he thought the costs of these operations were too high. So he put Lila in charge of a project to improve them. What sorts of cost cutting was Phil anticipating? What exactly were his complaints about the current system? What would success look like? Lila attempted to pin down Phil on those questions, but without success. He was too busy to think it all through and too eager to delegate responsibility for the project’s outcome. Other company executives were also anxious to see improvements but, like Phil, had no clear ideas about the outcomes they wanted. So when Lila quizzed senior managers about the subject, they cited no specific goals. Lacking guidance, Lila and her team members developed their own goals and criteria for success. The team pushed forward, and Lila reported progress to Phil over the course of the 10-month effort. Resources were always a problem, particularly since Lila was never sure how much money she could spend and how many people she could add to the team at key stages. Every request for resources had to be negotiated on a case-by-case basis with Phil. The team eventually completed its tasks, meeting all of its self-declared goals. It had cut orderfulfillment time by one-third and the overall costs of fulfillment and customer service by 12%. And 90%

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A Written Charter

of customers could now get all their issues resolved with a single phone call. The team celebrated with a splendid dinner, and members went back to their regular duties. Senior management, however, was not entirely pleased with the outcome. “You did a pretty good job,” Phil told Lila. “The improvements you’ve made are significant, but we were looking for a more sweeping reorganization and larger cost savings.” Lila was stunned and more than slightly angry. “If he wanted these things,” she thought, “why didn’t he say so?”

Situations like this are common but can be avoided with a charter that clarifies the project’s objectives, time frame, and scope.

Objectives As Lila’s case demonstrates, project managers need more than a broad-brush description of the objectives for which they will be responsible. Ambiguous goals can lead to misunderstandings, disappointment, and expensive rework. Take, for instance, the following statement: “Develop a website that’s capable of providing fast, accurate product information and fulfillment to our customers in a cost-effective way.” What exactly does that mean? What is “fast”? How should accuracy be defined? Is one error in 1,000 transactions acceptable? One in 10,000? To what degree must the site be cost-effective? Each of those questions should be answered in consultation with the project’s sponsor and key stakeholders.

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A thoughtful charter specifies the ends, but the means should be left to the project manager and team members. Telling the team what it should do and how to do it would undermine the benefits of having recruited a competent group. As J. Richard Hackman writes in Leading Teams: “When ends are specified but means are not, team members are able to—indeed, are implicitly encouraged to—draw on their full complement of knowledge, skill, and experience in devising and executing a way of operating that is well tuned to the team’s purpose and circumstances.”

Time Frame In addition to setting specific, measurable objectives, you’ll need to establish a time frame for achieving them. The project cannot be open-ended. In some cases, the deadline must be firm, and the scope becomes variable. Suppose a software company promises to deliver a new release every three months. The project team must make adjustments to the scope of its new releases—adding or dropping product features—to meet each deadline. By contrast, if the project’s scope is fixed, then a logical deadline can be established only after the project manager and team break down the objectives into sets of tasks and estimate the duration of each task. Nevertheless, the charter should contain a reasonable deadline— one that can be amended as the project team learns more about what it must do.

Scope Of course, options are always more plentiful than time and resources. One useful technique for making the 44

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right choices is to have key stakeholders and project participants join in a brainstorming exercise to define what should be within scope and what should not. Think of the sponsor’s expectations (the ends to be sought) as part one of the charter and the project plan (the means) as part two. The project manager typically creates the plan, but it’s important to get the sponsor’s approval on it so you don’t run into the same problems Lila faced with Phil. Ideally, it represents the best ideas from many or all team members. It’s especially valuable for large, complex endeavors because it provides details about tasks, deliverables, risks, and timetables. It serves as a road map for the team.

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Chapter 4

Dealing with a Project’s “Fuzzy Front End” by Loren Gary

Project management used to be about driving out uncertainty. You nailed down all the deliverables at the outset and fine-tuned your specs so implementation could be as routine as possible. Sure, there were always a few surprises, but overall you had a pretty good idea of what to expect. In many of today’s complex projects, however— whether they involve new-product development, IT installation, or internal process improvement—uncertainty simply can’t be eliminated. If you were retooling a shoe company’s manufacturing plant, says David Schmaltz, a Washington-based project management consultant, “perhaps only 10% of the

Adapted from Harvard Management Update (product #U0306C), June 2003

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work would be devoted to building the new production line, but 50% would have to do with the uncertainty surrounding which shoe style will sell best in the next quarter. . . . Thus, instead of trying to cut its time to market by building production lines faster, the company focuses on building production lines that can more easily accommodate changing shoe styles.” Studies of exceptional project managers in fast timeto-market industries show that the initial phase of a complex project, often referred to as the fuzzy front end, has a disproportionately large impact on end results. So it’s important to tread carefully. Resist the urge to dive right into implementation. “Defining the problem first gives you greater degrees of freedom in solving it,” says Bob Gill, president of the Product Development and Management Association, a New Jersey–based nonprofit. “Instead of assuming that your riveting equipment is operating too slowly, if you step back and say, ‘The real issue is that my cost of manufacturing the product is too high,’ you enable other possible alternatives to solving the problem—for example, redesigning the process so that the product requires fewer rivets.”

Build Your Community Early You’ll need input from key stakeholders before you can reach a robust understanding of the nature and scope of what needs to be done. Ask people in various groups likely to be affected by your project to help explore the opportunities, advises Peter Koen, a professor at the Stevens Institute of Technology, also in New Jersey. “Asking

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up front the questions about the unmet needs and the value of what you’re doing can help prevent unsatisfactory results down the road—for example, bringing out products to a mature and declining market.” As you invite others into the work of defining the problem, you’ll soon realize that your project’s community is much larger than you originally imagined. And it will shift over time, points out Chuck Kolstad, CEO of Antara, a high-tech firm in California. “Stakeholders who have only informational input into the early phases of the project may wield decision-making power later on.” If you make it clear in those early days that you value their insights and will incorporate them, your stakeholders will be much more inclined to give you the buy-in you need. Here’s where your recruitment skills come into play: As you share your developing vision for the project with a colleague whose assistance you’ll need, ask her what’s in it for her. Help her find her project within yours. Assuming a typical complex project, which lasts less than a year, “the week or two you spend at the outset just having conversations with people is far from useless, despite its appearance,” says Schmaltz. When plans slip or new requirements are added, he continues, the relationships you’ve built during this initial phase will “constitute a benevolent conspiracy of people committed to figuring out how to make the project work.”

Work Backward Research about cognitive bias has shown that decision makers are unduly influenced by how they initially frame

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their thoughts about a topic. Once you’ve defined the problem, don’t focus yet on the current process or product you want to improve. Instead, says Jim Goughenhour, vice president of information technology at Sealy, “imagine what the ideal end state would look like, then work back to put in as much of it as you can given the time, budget, and political realities.” The traditional approach to one of the projects Goughenhour oversees—creating a consistent sales reporting system—would have been to revisit the purpose of all the existing reports used by sales and marketing people throughout the company and explore ways of combining them. “If we’d done that,” he says, “we’d have spent most of our money making minor improvements that didn’t come close to the ideal.”

Be the Voice of Reason By the end of the project’s initial phase, you’ll produce a general plan that sets expectations within the project community and the company at large. That’s certainly no small task, but it can be an even bigger challenge to manage the expectations of your sponsor—the project champion three or four levels above you who insists that the work be completed in four weeks. Remember your “sacred responsibility to disappoint,” says Schmaltz. You know that unsettling hunch you’ve got, now that the fuzzy-front-end conversations are winding down, that the project will take much longer than expected and will cost a lot more, too? “Only by disappointing the project champion with this news in the beginning can you delight him in the end,” Schmaltz says.

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“Otherwise you end up being a slave to his unrealistic expectations, and instead of guaranteeing success, you’re almost certain to produce failure.”

Loren Gary was the editor of Harvard Management Update.

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Chapter 5

Performing a Project Premortem by Gary Klein

Projects fail at a spectacular rate. One reason is that too many people are reluctant to speak up about their reservations during the all-important planning phase. By making it safe for dissenters who are knowledgeable about the undertaking and worried about its weaknesses to speak up, you can improve a project’s chances of success. Research conducted in 1989 by Deborah J. Mitchell, of the Wharton School; Jay Russo, of Cornell; and Nancy Pennington, of the University of Colorado, found that prospective hindsight—imagining that an event has already occurred—increases the ability to correctly identify reasons for future outcomes by 30%. We have used prospective hindsight to devise a method called a premortem, which helps project teams identify risks at the outset. Reprint #F0709A. To order, visit hbr.org.

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A premortem is the hypothetical opposite of a postmortem. A postmortem in a medical setting allows health professionals and the family to learn what caused a patient’s death. Everyone benefits except, of course, the patient. A premortem in a business setting comes at the beginning of a project rather than the end, so that the project can be improved rather than autopsied. Unlike a typical critiquing session, in which project team members are asked what might go wrong, the premortem operates on the assumption that the “patient” has died, and so asks what did go wrong. The team members’ task is to generate plausible reasons for the project’s failure. A typical premortem begins after the team has been briefed on the plan. The leader starts the exercise by informing everyone that the project has failed spectacularly. Over the next few minutes those in the room independently write down every reason they can think of for the failure—especially the kinds of things they ordinarily wouldn’t mention as potential problems, for fear of being impolitic. For example, in a session held at one Fortune 50–size company, an executive suggested that a billiondollar environmental sustainability project had “failed” because interest waned when the CEO retired. Another pinned the failure on a dilution of the business case after a government agency revised its policies. Next the leader asks each team member, starting with the project manager, to read one reason from his or her list; everyone states a different reason until all have been recorded. After the session is over, the project manager reviews the list, looking for ways to strengthen the plan.

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In a session regarding a project to make state-ofthe-art computer algorithms available to military aircampaign planners, a team member who had been silent during the previous lengthy kickoff meeting volunteered that one of the algorithms wouldn’t easily fit on certain laptop computers being used in the field. Accordingly, the software would take hours to run when users needed quick results. Unless the team could find a workaround, he argued, the project was impractical. It turned out that the algorithm developers had already created a powerful shortcut, which they had been reluctant to mention. Their shortcut was substituted, and the project went on to be highly successful. In a session assessing a research project in a different organization, a senior executive suggested that the project’s “failure” occurred because there had been insufficient time to prepare a business case prior to an upcoming corporate review of product initiatives. During the entire 90-minute kickoff meeting, no one had even mentioned any time constraints. The project manager quickly revised the plan to take the corporate decision cycle into account. Although many project teams engage in prelaunch risk analysis, the premortem’s prospective hindsight approach offers benefits that other methods don’t. Indeed, the premortem doesn’t just help teams to identify potential problems early on. It also reduces the kind of damnthe-torpedoes attitude often assumed by people who are overinvested in a project. Moreover, in describing weaknesses that no one else has mentioned, team members

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feel valued for their intelligence and experience, and others learn from them. The exercise also sensitizes the team to pick up early signs of trouble once the project gets under way. In the end, a premortem may be the best way to circumvent any need for a painful postmortem.

Gary Klein is a senior scientist at MacroCognition, in Yellow Springs, Ohio.

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Chapter 6

Will Project Creep Cost You— or Create Value? by Loren Gary

Allow the wrong changes to your project, and you can veer off course, run over budget, and miss key deadlines. Reject the right change, and you may fail to capitalize on a major opportunity. Hence the dilemma: How do you stay open to improvements without succumbing to “creep,” in which small tweaks add up to budget- or schedulebusting modifications? By making sure the project’s boundaries are sharply delineated and the impact of potential alterations or slippage can be quickly calculated.

The Planning Phase A surprising number of projects get under way without a thorough attempt to define parameters. Haste is the chief

Adapted from Harvard Management Update (product #U0501C), January 2005

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culprit here, says Dave Moffatt, who brings 40 years of industry project-management experience to his role as senior operations adviser at Harvard Business School (HBS). As you plan your project, clarify it in the following important ways:

Differentiate scope from purpose “A project’s purpose is the general benefit it will provide to the organization,” explains Alex Walton, a Floridabased project consultant. “Its scope comprises the particular elements (or product attributes) that the project team can control and has agreed to deliver.” For example, a project’s purpose may be to create a new electronic game that will increase a toy company’s holiday sales by 40%. But the team developing the product needs to know what features it must have and what the budget for producing it will be. The scope statement provides this kind of information; it spells out, in a few sentences, how the team intends to achieve success and, thus, the criteria on which it will be evaluated. Get input on scope from your key stakeholders to align their expectations with the project’s actual trajectory.

Plan in the aggregate Defining scope isn’t enough to ensure clear boundaries, however. “Organizations also need to do aggregate project planning,” says HBS professor Steven Wheelwright, “in which they develop a strategy that lays out a pattern and rhythm for when subsequent projects will occur.” This is especially important for product development.

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Lacking a schedule for future projects, a product engineer with a new idea may grow concerned that it will never be implemented and thus try to slip it into the product that’s now in development—regardless of the impact on the cost and schedule. Analysis of prior projects serves as a valuable adjunct to aggregate planning. Study the past several internal IT projects your company has undertaken. What patterns emerge? Your findings can help you identify and better prepare for potential trouble spots in IT projects on the docket for the coming years.

Set the rules Another way to minimize creep is to require conscious discussion and approval before significant changes can occur. For instance: • Set up a change control board. In highly structured project environments, such a group is responsible for “gathering information about the impact that a proposed change will have on the schedule, budget, or scope; voting on the proposed change; and then sending a request-for-change document on for the project sponsors’ signature,” says Bob Tarne, a senior consultant who specializes in IT and telecommunications projects for PM Solutions in Pennsylvania. For an IT project affecting the sales, marketing, and logistics departments, your change control board would contain senior managers from those

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units. Smaller projects—costing less than $1 million and lasting less than 12 months—can effectively function without a formal board, says Tarne. The project manager can simply solicit the advice of key stakeholders as needed. • Establish thresholds for additional work. Michele Reed, an independent project management consultant in Washington, says, “Any change entailing more than 5% of the original cost or hours budgeted for that particular line item in the project should trigger a formal request for a scope change.” • Limit the number of new features. Set guidelines for how many new major and minor features can be included in a project of a certain size. This helps the project team control the inherent fuzziness of front-end planning by forcing it to choose only the ones that are most important to customers right now.

The Execution Phase When it’s time to implement the project, break it into small components with short time frames and focus first on the tasks with the least uncertainty and variability. For example, a software development team working on a product with four new features—the fourth of which it is not yet sure the market really wants—might choose to create the other three first because it is confident that the market wants them. The launch date for the fourth feature would be set to occur later, after the team has

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gathered enough additional customer input to confirm that it is critical. But don’t wait until all subprojects are complete before checking on whether the whole project (or product) is going to be a success, says Wheelwright. He recommends an approach known as periodic system prototyping: “At regular intervals during the execution phase, link up all the subprojects for a system test. This helps ensure that the subprojects you’ve created are coming together as planned.”

Should This Add-On Be Approved? During construction of McArthur Hall, HBS’s residence for students in executive education programs (some of which last as long as eight weeks), a scope-change decision was made to create 10 rooms so guests of attendees could visit for a few days at a time. Reducing the number of rooms for students by 10 would have cut into the program’s long-term revenue potential by reducing the available space for registrants. Better to build 10 additional rooms to accommodate guests, the project’s executive sponsor argued, and to pay for the additional cost over several years out of the larger income stream that would result from keeping the number of exec-ed suites as originally planned. Careful ROI analysis, in other words, helped the project’s overseers find the optimal way of dealing with the proposed add-on. By following the recommendations outlined here for your project’s planning and execution phases, you can eliminate scope changes that don’t merit such analysis. If

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you define clear boundaries up front, the change requests that come through are much more likely to be worth serious consideration. When considering a scope change, make sure your stakeholders fully understand the purpose of the change. For example, have market conditions made it important to accelerate the schedule so that the product can ship earlier than originally planned? Do new industry standards, adopted since the planning phase, need to be accommodated? Or is a new technological solution required, because the one initially chosen hasn’t panned out? Next, explain how the proposed change affects everything: the scope statement and project plan, the available resources, the total cost, and the schedule. Finally, encourage stakeholders to consider what will happen if the change is not made. In these deliberations, says HBS’s Moffatt, the opinions of people who represent the end users should be given the greatest weight. As the project manager, if you’re lobbying for a change, you’ve got to have a plan for funding it. If the future revenue generated by the add-on won’t cover the cost, find other places in the project where you can save money, and focus on things you can directly control within the next 30 to 90 days in the schedule, advises Reed.

Loren Gary was the editor of Harvard Management Update.

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Phase 2

Build-Up

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Chapter 7

Setting Priorities Before Starting Your Project by Ron Ashkenas

In a rush to demonstrate initiative and take action, new project managers often launch activities without first getting a sense of which ones are the most critical and what the sequence should be. As a result, they unwittingly slow things down. Take this example: Plant managers at a global manufacturing company kept getting peppered with unnecessary, often redundant, data requests from corporate headquarters. To reduce this burden, the head of manufacturing asked a senior engineer to lead a project team to streamline data sharing. Upon receiving the assignment, the engineer enthusiastically (1) fired off an e-mail requesting that all heads of corporate functions nominate team members and send lists of the data they wanted from the plants; and (2) sent a note to a dozen

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plant managers asking for their views about which reports to eliminate. Within hours, the new project manager was overwhelmed and confused: Some of the corporate executives balked at her requests because this was the first they’d even heard of the project; others said they needed more details about the problem before they could respond; and still others sent long lists of required reports. The plant managers, too, came back with an odd mix of questions and requests. So instead of getting off to a fast start, the project manager stirred up resistance, created extra work for herself and others, and ended up with a pile of information that wasn’t very useful. It’s not as difficult as you might think to avoid a situation like this. Here are three simple steps you can take to get your priorities right before you set your project in motion:

1. Clarify the assignment Do not start any activities until your stakeholders have blessed your charter. You can easily spin your wheels on all sorts of misguided tasks if you’re not clear on the overall objectives of the project and how success will be measured (what); the business context for it (why); the resources available (who); the timing (when); and any key constraints or interdependencies (how). Though it would be nice if your boss or project sponsor had sorted out these issues before giving you the assignment, the reality is that most projects are not commissioned with this level of specificity and clarity—so it will be up to you to get it. In the example above, if the project manager had done this before sending e-mails, she would have

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discovered that the head of manufacturing had talked only in general terms to the other corporate functional leaders about the data-overload problem—and had not told them he was starting a specific project with a defined goal and timetable.

2. Organize your troops Once you’ve figured out what needs to be accomplished and recruited team members, get people engaged quickly so they feel ownership of the project. Ask for their reactions to the charter and their experiences regarding the issues, and treat them as partners rather than temporary subordinates. Work with them to develop a “modus operandi” for your team—how often you will meet, how you will communicate with one another, when you will review progress with the sponsor, and so on. If you don’t get organized from the beginning, you’ll waste time later chasing down people, coordinating calendars, and repeating key messages. The same goes for identifying and reaching out to stakeholders. Have your team help you create a “map” of the people who will be affected in some way by the project. Sketch out how they relate to one another and to the project—and then do a political analysis of the key players. Which individuals or groups will be supportive and enthusiastic about your project? Which ones might be anxious or even resistant? Who will need to be won over or given special attention? Such analysis would have revealed to the project manager in our manufacturing example that some (or all) of the corporate functional leaders—who would have to

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SAMPLE CHARTER FOR DATA-STREAMLINING PROJECT What: Reduce corporate’s requests for data from plants by 50%—and free up at least four hours per week for the plant managers and staff. Why: The plants need to focus on increasing equipment utilization while managing a greater mix of products. This means spending more time planning and leading and less time reporting. Currently, every corporate function is asking for information from the plants—often the same information in different forms at different times. Who: The project manager will recruit team members from plant operations, corporate finance, quality assurance, and human resources. Others may be called upon as necessary. All members will

change their way of collecting data to comply with her requests—would not be supportive of her project and may in fact be hostile. And with that insight, she might have approached them differently.

3. Pull your project plan together You’re now ready to develop a project plan, or at least a good working draft, given what you know about your objectives and your stakeholders. Conduct a brainstorming session with your team to identify all the activities that

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be part-time but may have to dedicate 25% of their time to this effort. When: The project should commence immediately. Develop an inventory of current reporting requirements within 30 days and recommendations for consolidation and streamlining within 60 days. Start eliminating redundant reports within 90 days. Complete implementation within 120 days. How: The corporate functions must reach consensus about which common data requests can be met with existing systems and standardized reports. Data requests that are unique for particular plants should be exceptions, not the rule, and should involve minimal customization.

might be required to complete the project—including data collection, completion of “quick wins,” stakeholder meetings, and presentations. Encourage your team to be creative and not to worry at this point about timing. Write each item on a sticky note, and post the notes on the wall. Once all the activities are up there, organize them into categories and put the groupings in sequence. Some of the categories will “run” in parallel and represent separate (but probably related) work streams.

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The notes on the wall, taken together, represent your project plan. Now take a hard look at that total picture. Give each team member 100 “units” to allocate to the various activities (without discussion); ask them to pay close attention to which ones must be done successfully to achieve the project’s objectives. Then compare the allocations and see which activities are considered critical as opposed to “nice to do.” This should lead you to the tough discussion of which ones to drop or delay so the highest priorities will get the focus and the resources they require. After you’ve completed this exercise, go back to the overall project plan and make the necessary adjustments: Remove the low-value steps, and load the high-value ones for success.

Clearly, it’s counterproductive to get things moving without prioritizing tasks. But controlling the all-toonatural impulse to jump the gun only at the beginning of your project is not sufficient. New opportunities, issues, ideas, and threats will continue to materialize, as will new steps and work streams—often without anyone understanding how these items even made their way onto the table. You’ll need to keep setting and resetting priorities to make sure you and your people are always on target. To do this, bring your team together at least once a month to step back and reassess the project plan. At each of these meetings, ask your team two questions: First, “Has anything changed that should make us rethink our priorities?” And second, “If we were just given

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this assignment now, would we approach it differently?” This will help you keep your priorities clear—and your project on track.

Ron Ashkenas is a senior partner at Schaffer Consulting in Stamford, Connecticut, and the author of Simply Effective: How to Cut Through Complexity in Your Organization and Get Things Done (Harvard Business Review Press, 2009). He is a regular blogger for hbr.org.

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Chapter 8

Boost Productivity with Time-Boxing by Melissa Raffoni

Editor’s note: To keep your project on schedule, you’ll need team members who are focused and productive. Here are some tips for getting their calendars—and your own—under control. Everybody needs more time—but since no one gets more than 24 hours a day, the only choice is to use those hours more effectively. One proven technique, time-boxing, involves just three steps. First, list everything you and your team members want to accomplish in a given week, month, or quarter. Include project goals and the tasks necessary to achieve them. It may help to group activities by job function, such as strategy, business development, daily operations,

Adapted from Harvard Management Update (product #U99120), December 1999

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and people management. With that kind of framework, you can see whether the team is spending its time in the right places. Second, estimate how much time each item will require. Think carefully about the steps for completing the tasks. This is the part that “keeps me honest,” says Beran Peter, CEO of Instruction Set, an educational consulting company in Massachusetts. “If I realize I’m not going to hit my estimate, I’m able to assess why and evaluate how I might make a change to get back on track.” Third, block off the appropriate amount of time for each item. If you think writing a business plan will take 32 hours, try setting aside four hours for every Tuesday and Thursday over the next four weeks. The challenge, of course, is prioritizing and fitting the time in where it makes sense. Don’t forget to allow some leeway. Change is inevitable, and you may need to add tasks midstream. Once you get started on time-boxing, you’ll find it has several benefits: • It forces you to think through project goals and figure out how much time you really need to make them happen. • It provides a framework for setting expectations and boundaries. If a team member’s calendar is full, she’ll have to say no to extra requests—or you’ll have to work with her to consciously reassess priorities. • It improves your ability to estimate time demands.

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• It enables you to assess—and pull the plug on— unproductive initiatives that suck up too much time. Your team will feel better about the work it’s doing. Everyone will be more focused. You’ll all accomplish more. And—no small matter—people will avoid burnout from taking on more than they can handle.

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Chapter 9

Scheduling the Work Now that you’ve used the Work Breakdown Structure to identify and define your project’s tasks and estimate how long each will take, you’re ready to put them in sequence. That involves three steps: • Examining relationships between tasks • Creating a draft schedule • Optimizing the schedule

Examining Relationships Between Tasks Task relationships dictate the order of activities in a project. Suppose ABC Auto Company plans to introduce a new passenger car and has asked a team to design and test it. The team needs to build and test both external

Adapted from Harvard Business Essentials: Managing Projects Large and Small (product #6242BC), Harvard Business Review Press, 2004, and Pocket Mentor: Managing Projects (product #1878), Harvard Business Review Press, 2006

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and internal components before it can test the whole car. Because of those dependencies, the project’s tasks must be scheduled in this sequence: (1) design the vehicle, (2) build and test both external and internal components, and (3) test the vehicle built from those components. (See figure 1.) Component building and testing, however, can simultaneously follow parallel tracks—one for external components, another for internal ones. Why? Because those two sets of build-and-test activities depend on vehicle design but not on each other. By recognizing opportunities to perform different activities in parallel, as in this example, you can reduce the amount of time your overall project takes. Once you’ve evaluated the relationships between tasks, brainstorm with your team to come up with a rough sequence that makes sense in light of the dependencies you’ve identified.

FIGURE 1

Project network diagram: task relationships Sample automobile project 3/13–4/11

4/11–4/21

3/1–3/12

Build External Components

External Test

4/22–4/30

Vehicle Design

3/13–4/5

4/6–4/19

Vehicle Test

Build Internal Components

Internal Test

Source: Harvard ManageMentor® on Project Management (Boston: Harvard Business Publishing, 2002). Used with permission.

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Creating a Draft Schedule At this point, you’re ready to create a draft schedule, which involves assigning a deliverable to each task (for instance, “build prototype for market testing”); setting realistic due dates; identifying bottlenecks so you can eliminate them, develop workarounds, or add time to accommodate them; and establishing a protocol for updating or revising the schedule. In your draft schedule, indicate start and end dates for all activities and recognize task relationships. Remember, this is just your first stab at scheduling—you’ll make adjustments later, after the team has had a chance to review it. Project managers rely on several tools for scheduling their teams’ work. Here are a few useful ones to have at your disposal.

The Critical Path Method As its name suggests, the Critical Path Method (CPM) helps you identify which tasks are critical—those that must be completed on time for the project to meet its deadlines—so you can allocate resources efficiently. Project managers often use CPM to plot the sequence of activities. Consider a project involving six tasks with the following requirements and time expectations: Activity

Requirement

Time to Complete

A

5 days

B

3 days (continued)

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Activity

Requirement

Time to Complete

C

A and B completed

4 days

D

B completed

7 days

E

A completed

6 days

F

C completed

4 days

You can diagram the critical path as shown in figure 2. This chart tells you that at the earliest, you can complete the project in 11 days. It also shows that activities A and E are critical to your overall deadline. Given this information, you may want to readjust your resources and put more toward these tasks. Let’s revisit the ABC Auto Company project and the accompanying network diagram, discussed earlier. The diagram not only illustrates dependencies between tasks but also reveals the critical path: (1) vehicle design, (2) build external components, (3) external test, and (4) vehicle test. Why does this progression of tasks define the critical path? Because it’s the longest path in the diagram. The other path—which passes through (1) build

FIGURE 2

Critical Path Method Days 0 A Estimated Start: 0 days

1

2

3 5 days 5 da ys

4

5

B

7

8

9

10

11

12

6 days

E C

ys 3 da 3 days D

6

Estimated Finish: 11 days

4 day s

7 days

F

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internal components and (2) internal test—is shorter by two days. Team members working on those activities could spend two extra days on them and still not throw the vehicle test off schedule. And they wouldn’t shorten the overall schedule if they completed their work on noncritical-path activities ahead of time. The reason? Tasks on the critical path determine total project duration.

Gantt chart If all you need is a way to show when activities should begin and when they should end, try making a Gantt chart. You can easily create one with spreadsheet or projectmanagement software. (See figure 3.) This is a popular scheduling tool because it’s simple and it allows people to see the project at a glance. But it does not spell out relationships between tasks, as CPM does, so you may want to make note of dependencies inside the time blocks.

PERT charts Some project managers use Performance Evaluation and Review Technique (PERT) as an alternative to the Gantt method for scheduling. Because it illustrates the critical path (it’s essentially a network diagram) and lays out the project milestones, it’s a handy tool for communicating the big picture to your team members. (See figure 4.) A PERT chart may have many parallel or interconnecting networks of tasks, so periodic reviews are essential for complex projects. As you’re tracking your project’s progress later on, you may need to come back and revise the chart. For example, if the time between dependent tasks exceeds your estimates, and those 81

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4/8–4/14

4/15–4/21

4/22–4/28

4/29–5/5

5/6–5/12

Source: Harvard ManageMentor® on Project Management (Boston: Harvard Business Publishing, 2002), 26. Used with permission.

Activities Install new servers Obtain equipment Implement equipment Test equipment Go live with new equipment Repeat testing Decommission old equipment Evaluate process

Gantt chart

FIGURE 3

5/13–5/19

5/20–5/26

Scheduling the Work

FIGURE 4

PERT chart Copy configuration Test Load connectivity applications

Set-up Order equipment 2

2

4

2

5

3

2

6

2

1

1

3

Load OS

Alert data center

3

7

5 Start 1

Run tests

Retest 9

1

18 Days

8

Switch web 1

Numbered boxes represent milestones Arrows represent task duration, show sequential and concurrent tasks Dotted lines indicate downtime while concurrent task is in process

Source: Harvard ManageMentor® on Project Management (Boston: Harvard Business Publishing, 2002), 25. Used with permission.

tasks are on the critical path, you’ll have to make up for lost time elsewhere in the schedule to avoid missing the project’s overall deadline. Which scheduling tools are best for your purposes? Whichever ones fit how you like to work, allow you to keep all team members informed, and remind people that they are part of a larger effort.

Optimizing the Schedule After you’ve created the draft schedule, work with your team to improve it. Have the group help you look for: • Errors. Are all time estimates realistic? Pay particular attention to tasks on the critical path

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because if any of these cannot be completed on time, the entire schedule will be off. Also, review the relationships between tasks. Does your schedule reflect the fact that some tasks can’t start until others are completed? • Oversights. Have any tasks been left out? Have you allowed time for training? • Overcommitments. In reviewing the schedule, you may discover that some employees would have to work 10 to 12 hours per day for months on end to complete the tasks assigned to them, for instance, or that a piece of equipment is booked to deliver above and beyond its capacity. If you find such problems, redistribute the load. • Bottlenecks. Any task that causes the work feeding it to pile up must be identified and dealt with. Think of an auto assembly line that stops periodically because the people who install the seats cannot keep up with the pace of the line. The usual way to handle this problem is to speed up the work process used in that task or add resources to it (for example, more people or better machinery). • Imbalances in the workload. Are some team members being asked to do more than their share while others do very little? Rebalancing the load could reduce the overall schedule. • Slack time that can be filled. You may be able to shorten the whole schedule by shifting resources

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away from noncritical-path activities. For example, if you have four people working on a noncritical task that has four to five days of slack time, shift some or all of those people to a critical task for several days. Even if you’re using project-planning software to keep track of tasks and times, do this kind of thorough reality check with your team members. Any software you consider buying should make it easy to develop and change charts, calculate critical paths, produce schedules and budgets, factor in weekends and holidays, create different scenarios for contingency planning, and check for overscheduling of individuals and groups.

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Chapter 10

HBR Case Study: A Rush to Failure? by Tom Cross Editor’s note: HBR’s case studies present fictionalized accounts of actual dilemmas faced by leaders, and offer solutions from experts. “There is absolutely no reason why the contractors shouldn’t be able to give us rapid product development and flawless products—speed and quality both,” David MacDonagle said as he tried to light a cigarette. The warm wind, portending rain, kept blowing out his matches. Finally he gave up and slipped the cigarette back in his pocket. MacDonagle, the head of the Canadian Aeronautics Administration, was nervous. Everyone at CAA headquarters was nervous. Very shortly, the project that many of them had devoted the past four years to would have its first real-world test, 350 kilometers above the earth.

Reprint #R1104N. Reprint Case only #R1104X. Reprint Commentary only #R1104Z

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Feeling cooped up in the executive offices and oppressed by the presence of the media, MacDonagle had gone outside to breathe some air—actually, some tobacco smoke— and had invited the sharp young program manager Samantha Van Sant to join him. Van Sant, a former Canadian army major, had a lot of skin in the project too. Since 2006 she’d been managing the two contractors the CAA had commissioned to build the $1.2 billion set of giant robotic arms known as Retractable Extended-Arms Compatible Holder, or REACH, for the International Space Station. “So how do you deal with nerves?” MacDonagle asked. “I usually go out for a run,” Van Sant said, looking down the road that led from CAA headquarters through the cornfields, on which she’d logged many miles. They turned to look back at the agency’s buildings, which despite their grandeur looked small in the empty Quebec landscape. The sight reminded Van Sant of one of MacDonagle’s catchphrases: “We are a small spacefaring nation. . . .” Canada was indeed a small player in space compared with the U.S., Russia, Europe, and Japan. Always at risk of being marginalized, the CAA had done everything possible to get the REACH contractors, Hollenbeck Aircraft and Eskina Software Systems, to complete the first phase of the project in time to get it to the space station this year, when the orbiting lab would officially be complete. And, amazingly, they had made the deadline—and come in on budget. REACH was now attached to the station, though there was still much more to come, including an

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even more sophisticated set of “hands” that would fit on the ends of the robotic arms for extremely delicate work. The additions were to continue for two more years. The contractors had been great about speed; the problem was quality. Glitches with the software, motors, and circuits had kept turning up. The fact was, not a single test in four years had gone flawlessly. “Yeah, yeah, we can fix that,” the contractors’ reps always said, dismissing the CAA’s concerns. “Hey, this is life in the fast lane,” a rep told Van Sant after one of REACH’s arms had failed to retract on command. “Remember, we told you that the compressed schedule would increase the risk.” The contract that she managed called for parallel development, meaning that the project’s phases—R&D, prototyping, testing, production, and quality control— overlapped, with each one beginning while the previous one was as much as 50% incomplete. That was sacrilege in some aerospace circles. But owing to the space station’s construction deadline and the everpresent threat of cuts to the CAA’s budget, the agency was aiming to do a decade’s worth of work in six years. Computer simulations had to take the place of some real-world testing. Component quality control was less thorough. Because of all the unknowns in the project, the CAA had agreed to a cost-plus-fixed-fee contract, under which the contractors were paid a specified amount over their costs for labor, materials, and overhead. MacDonagle’s insistence on a rapid approach to development had been one of the main reasons Van Sant had been hired as a program manager. During her years in

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the army, she had established a bulletproof reputation for being aggressive and goal oriented. She and MacDonagle saw eye-to-eye. She knew speed was critical. “We’d better go, I guess,” MacDonagle said. “The media hounds are waiting. I told them I’d do quickie interviews once I got back. I know what they’ll ask me: Is REACH going to work this time?” As they headed toward the building, the rain started. He looked at Van Sant. “So is it?”

Trouble in the Air Red marker in hand, MacDonagle held forth before a group of reporters, asking whether they were aware that 50 years ago, the U.S. had blasted half a billion inchlong copper needles into orbit to reflect radio waves and thereby facilitate communications. Those needles were still floating around, and some had torn through one of the space station’s solar collectors. “The solar arrays are the big bird’s big red wings,” he said, turning to the whiteboard and drawing the collectors. He drew a gash in one of them. “A hole here means less electricity,” he said, tapping the board. “Ever since the solar array got that hole from those flying needles, the space station has been operating on less power. Fixing it is tricky, because it’s very far from the modules where the astronauts work and because of the risk of electrocution. Once an array is in place, you can’t turn it off. It keeps generating power from sunlight. So if a spacewalker were to try to go out there and fix it, he’d be liable to get 100 volts of direct current through his body. That’s where REACH comes in.”

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He took a moment to draw the Canadian creation, then stepped back to admire his sketch. The machine’s two long arms stretched out toward the solar array in a nurturing embrace. “Fixing solar arrays isn’t what REACH was designed for,” MacDonagle said. “It’s meant to do the mundane work of replacing battery units on the exterior of the space station. But since REACH is up there, it’s being pressed into service for the repair. It will stitch together the solar array while the astronauts control it from the safety of their module.” He put the cap back on the marker and began fielding questions. As Van Sant watched, someone tapped her on the arm. It was Alfred Siroy, the head of a CAA panel that had been trying to find out why there were so many quality issues with equipment from the Hollenbeck-Eskina venture. “How long before they deploy it?” he asked. “Soon—later—I’m not sure,” she said. Siroy always made Van Sant defensive. He’d made no secret of his disapproval of the way the REACH program was being managed, and of the parallel approach in particular. She knew that this viewpoint would figure in his forthcoming report. Fortunately, he was an overly meticulous writer, so the draft was taking forever. She asked him how the writing was going. “Slow,” he said, shaking his head. “But we do have a title: ‘The Rush to Failure.’” This gave her a start. “What failure?” she asked. “REACH is about to perform a critical repair task.” He shot her a skeptical look. “Rapid ramp-up was a laudable goal,” he said. “But you have to give a contractor

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adequate time for QA. And you have to have a contract that gets the incentives right.” He continued: “We did an analysis. Your compressed schedule forces Hollenbeck-Eskina to cut corners, resulting in prototypes that fail. Substituting computer simulations for rigorous ground testing is a recipe for disaster. There isn’t an electronic data management system that would allow the contractors and the CAA to access current test data for analysis. The prototypes aren’t equipped with the instruments that would provide adequate test data. And the contractors have no incentive to push back: The cost-plus contract puts all the risk on the CAA. The agency and the contractors have different goals and objectives.” Van Sant couldn’t disagree about the contract; its weaknesses had become increasingly evident to her. But if speed was the priority, they were unavoidable. “The contract language is ancient history,” she said dismissively. “You can rewrite history,” Siroy said. “Any contract can be altered as long as both sides agree—you know that.” Suddenly, Van Sant saw, one of the staff members who’d been monitoring the goings-on at the space station began ushering MacDonagle away from the reporters, who, smelling blood, tried to follow. MacDonagle caught her eye, and Van Sant didn’t like the look she saw on his face. Something bad had happened. She slipped inside the communications room, where journalists weren’t allowed, just before the door was shut. Over the speakers she could hear the astronauts at the space station talking about the power switching unit

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and using the word “failure.” She heard someone say, “We have to go to Plan B.” REACH was probably experiencing the same problem that had come up during its last on-ground test. A system failure notification had gone off, but the contractors had dismissed it as a “reporting error,” meaning it hadn’t reflected a true mechanical breakdown. Still, no one wanted to deploy REACH while red lights were flashing. There was too great a risk that the robotic arms would fail at a critical moment. “What’s Plan B?” Van Sant asked MacDonagle. “I don’t know,” he said quietly, “but whatever it is, it won’t involve anything that came from us. REACH is Canada’s only contribution to the space station.”

Support from on High “We’ve got video!” someone shouted, and there on the screens were multiple images of a man in a space suit dangling at the end of a loading crane. It was well past midnight, but the reporters were still at CAA headquarters. They gathered around the screens. MacDonagle and Van Sant had long since given up trying to avoid them and were mingling with them as the repair attempt unfolded high above West Africa. Everyone watched in silence as the crane, jury-rigged for the purpose, carried a spacewalker toward the space station’s torn solar array. REACH couldn’t even be seen— it was docked somewhere else. “Harris Webb,” MacDonagle said ruefully as he watched the figure in the shiny suit. “It’s so fitting.” Years

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ago, MacDonagle and Webb had been pilots on the same shuttle mission, and Webb, though much younger, had been chosen to lead it. A U.S. physician, mountaineer, author, pilot, and gourmet cook, as well as an astronaut, he was the ultimate go-to guy, brilliant and fearless—almost to the point of being foolhardy. The reporters were excitedly discussing his stunt. Because REACH had failed, Webb was going out on the end of the crane to repair the array by hand. In one gloved hand he held what looked like an oversized hockey stick wrapped in insulation, so that he could stop himself from bumping into the arrays. In the other he carried several two-meter lengths of plastic cable that would be used to “stitch” the pliable solar array back together. “Wow,” a reporter gasped as Webb, reaching awkwardly, began threading one of the cables through the openings in the array. “Cowboy,” MacDonagle hissed under his breath. He put his hands on his head and looked at the ceiling. Van Sant spotted Charlie Truss, one of the reps from Hollenbeck, sitting in a corner, his tie loose. He looked miserable. But she didn’t feel pity for him—just annoyance. She went over to him. “Whatever happens up there tonight,” she said, “things are going to change down here. Our only way forward from this fiasco is to show that we’ve taken concrete steps to improve QA and finally get some positive results.” “I’m all for that,” Truss said. “But anything you do to increase QA is going to slow things down. Once that happens, the costs start increasing and you become vulnerable to budget cuts. If we turn our existing contract into

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a traditional aerospace contract with all those sequential steps and inevitable delays, we might as well say good-bye to the improvements to REACH that are in the pipeline.” “If speed has to be sacrificed for a more reliable REACH, then so be it,” Van Sant said. “The contract has major flaws. You’re accountable for speed but not performance. We have to share the risk. We need a contract with performance-based incentives and penalties so that we can balance speed, quality, and results. Our goal is reliable components and systems that perform— and that should be your goal, too. We need to work as a unified team willing to push back on each other to get results.” Behind her the reporters gasped. She rushed to a screen and was relieved to see only that Webb, as he had finished his repair, had accidentally let go of a set of pliers, which was now drifting off into space. But then Webb did something incredible. He turned to his Earth audience and began making a statement defending the failed REACH. “Everyone’s going to blame REACH, but they shouldn’t,” he said. “It’s a great piece of technology. I want to commend David MacDonagle and the CAA for overcoming a lot of technical obstacles in a big hurry and getting REACH up here on time. It’s going to be a vital part of our operations. One little powerunit problem doesn’t mean anything. Complex machines fail—that’s just the way it is. We’ll fix it, just like we fixed the solar array. I understand that the CAA has a great upgrade coming in the next couple of months—a new set of robot hands that are so nimble they can peel a hardboiled egg. I say, Get it ready and shoot it up here. We’ll

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start using it right away. I’ve got a few eggs that need peeling.” Van Sant was stunned, and she could see that Truss was, too. Then, giving her a small smile, he asked: “What were you saying about the contract?”

Tom Cross is a senior director in executive education at the University of Virginia’s Darden School of Business, where he develops executive-learning programs for Department of Defense leaders. Previously he was a senior executive at such firms as KFC and Office Depot.

Should Van Sant push for a renegotiated contract for REACH? See commentaries that follow.

Commentary #1 by Gary L. Moe Whenever you hear about large, complex, costly government-sponsored tech initiatives that fail to meet expectations, the blame almost always falls on the “hurry up” schedule. If only the public agency hadn’t pushed the contractors so hard, if only the developers had been given more time to refine the design, if only a few more months or years had been built into the production schedule, the technology would have worked perfectly. But it’s not true. Government sponsors can give contractors all the time and money in the world to complete a detailed requirements analysis and perfect a project design, and the

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finished product still probably won’t work flawlessly. Socalled big-bang design, in which developers labor mightily to get every last detail correct, is incapable of yielding a fully functioning, error-free product, because human beings, no matter how brilliant they are, cannot foresee all the issues that might arise in a complex technology. What’s needed instead is an iterative development process, whereby you build a prototype or even a fully fledged product and then put it out there, test it, and learn from its weaknesses, most of which you couldn’t have seen on the drawing board or in a 3-D simulation. In the next iteration, you enhance the product. Then you run another round and another and another until finally you have something that works. The more complex a technology is, the more iterative the development needs to be. This is how products are developed in the nongovernment sector. Take the auto industry. Cars are so complex that a manufacturer will put a model through a number of builds and a lot of testing before starting full production. In software, this process is called agile development. Developers write code for a week, test it to find out how to improve it, and then write some more code. An interactive approach also works best when it comes to organizational change. No matter how hard you work on designing a reorganization, you will get it only 60% right, so you have to keep working at it, and finally you’ll get to 90% right. (It never gets any better than that.) Iterative development can work both for big longterm projects and for big one-offs, which is what many components of the International Space Station are. You

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break the development into pieces and apply the buildtest, build-test method to the parts. So why do government organizations, especially those that are defense- or space-related, favor the big-bang approach? There are a number of reasons, some involving the way procurement is handled. But the root of the problem is that iterative development entails experimentation, and experimentation entails failure. Government agencies don’t like failure because it ruins political careers. So they try to avoid experimentation. But usually what they end up with is an even bigger failure—and no clue about why it happened. My advice for Samantha Van Sant, then, is to restructure the contract to break further development of REACH into small chunks and require the contractors to practice iterative improvement, instead of striving for full initial functionality. Cutting down on the functionality delivered in each phase might help too, since 80% of cost and schedule overruns are usually due to the last 10% to 20% of requested functionality.

Gary L. Moe is a director in McKinsey’s Business Technology Office and is based in Silicon Valley.

Commentary #2 by Tom Quinly In the world of cutting-edge product development, the struggle between speed and quality is over. Speed has won—decisively. In today’s highly competitive global

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markets, getting innovations out quickly can mean the difference between success and failure. But it’s also a given that the quality must be high. Quality has become table stakes. A lot of research has been published on the holy grail of lightning-speed development. Concurrent engineering programs, agile teams, risk mitigation programs, spiral development, outsourcing, harmonizing tools, and advanced simulation and modeling tools all can help you attain it, but your own people, processes, and market demands will determine the right recipe. What works best for us is forming small, seasoned, highly talented teams; being clear about time-to-market expectations; making sure developers have the right set of tools; and keeping our technical teams engaged, customer focused, and happy. Bureaucracy, however, is an innovation killer. It’s inevitable that as a business grows, things that don’t add value creep into processes. With each slipup there’s a tendency to add another process check. In isolation, each makes perfect sense, but in the aggregate, innovation is choked, and the team can’t move nimbly. I recall an experience early in my career, when a major development project had gone poorly. At an executive review, I was prepared to explain what had happened, what we’d learned, and what we’d done to stop the bleeding. Our CEO looked around at the others in attendance and said that he was disappointed—not in the group that had failed (mine), but in the other groups, because they hadn’t failed. They weren’t being as aggressive as he expected. That story lives on in the lore of the company, and it says a lot about our culture.

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It’s not that we encourage failure—we use it as a tool. Complex development programs rarely (if ever) come out of the gate perfectly; something unanticipated often happens. A lot can be learned from reviewing failures and looking at processes, expectations, people, and tools. Were our requirements too ambitious or ill defined? Did we not map the highest-risk areas and have well-designed mitigation plans? This relentless focus on learning improves predictability, reduces cycle time, and helps us get a high-quality offering to market ahead of the competition. That’s why I would advise Van Sant to give up the dinosaur perspective that speed means having to sacrifice quality. She should engage the entire team in examining the failures and exploring ways to achieve quality without upsetting the schedule. If REACH has few qualified alternative partners, then disrupting a long-standing contract with a highly experienced and specialized partner would be counterproductive. If Hollenbeck-Eskina is the best option, I would avoid having to reopen the contract and potentially lose the partner’s deep project knowledge. However, if Hollenbeck-Eskina was not totally engaged and forthcoming in helping understand and correct the failures, it may be time to involve other potential partners or to stand firm on a contract renegotiation.

Tom Quinly is president of the motion control segment at Curtiss-Wright Controls, based in Charlotte, North Carolina, which develops products for aerospace, defense, and industrial markets.

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Chapter 11

Getting Your Project Off on the Right Foot With your project team formed, your charter delivered, and the team’s tasks scheduled, you’ve still got a few critical matters to take care of before work commences. First, your project needs a launch—a special event that marks its official beginning. Second, you must set up activities and provide tools that foster team building. And third, you must institute behavioral norms that make collaborative work possible and communicate them to all participants.

Why Launch Meetings Matter The launch represents the very first project milestone. If conducted properly, it has substantial symbolic value. The best way to kick off a project is through an allteam meeting, one with appropriate levels of gravity and

Adapted from Harvard Business Essentials: Managing Projects Large and Small (product #6280BC), Harvard Business Review Press, 2004

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fanfare. You’ll have already held many planning sessions with key individuals—but those informal get-togethers are no substitute for a face-to-face meeting attended by all team members, the sponsor, your stakeholders, and, if appropriate, the organization’s highest-ranking official. Physical presence at this meeting has great psychological significance, particularly for geographically dispersed teams, whose members may have few future opportunities to convene as a group. Being together at the beginning of their long journey and getting to know one another on a personal level will build commitment and bolster participants’ sense that this team and project are important. If certain people cannot attend the launch meeting because of their geographic location, they should participate virtually, through videoconferencing or, at the very least, speakerphone. The sponsor’s presence and demeanor at the launch speak volumes about the importance—or unimportance—ascribed to the project’s mission. As Jon Katzenbach and Douglas Smith write in “The Discipline of Teams” (HBR March–April 1993): When potential teams first gather, everyone monitors the signals given by others to confirm, suspend, or dispel assumptions and concerns. They pay particular attention to those in authority: the team leader and any executives who set up, oversee, or otherwise influence the team. And, as always, what such leaders do is more important than what they say. If a senior executive leaves the team kickoff to take a phone call ten minutes

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after the session has begun and he never returns, people get the message.

Here are your main tasks for the launch: • Welcome everyone aboard. Acknowledge and thank all those who will contribute to the project. Mention each person by name. Many attendees will be core team members, and others will be peripheral members who participate for a limited time or in a limited way. But all are members. • Ask your sponsor to say a few words. Have him articulate why the project’s work is important and how its goals are aligned with larger organizational objectives. Otherwise, people won’t see consequences for themselves and the company, and they won’t make their best effort. • Make introductions. Unless people are already familiar with one another, they probably won’t know who has which skills. If the group isn’t too large, ask participants to introduce themselves, to say something about their background and expertise, and to explain what they hope to contribute to and get from the project. • Share the charter. Explain the goals, deliverables, and timetables you’ve documented. • Seek consensus. Get everyone to agree on what the charter means.

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• Describe the resources available. Although you’ll certainly want to stoke the team’s enthusiasm at the launch, it’s equally important to set realistic expectations about the amount of support (both workers and budget) you’ll have. • Describe incentives. What will members receive, beyond their normal compensation, if the team meets or exceeds its goals? Though participants will develop a sense of belonging and common goals only with time and through shared experiences, you’ll have planted the seeds at the launch meeting. People should now begin to think of themselves as members of a real team.

Provide Activities and Tools for Working Together Giving people collective goals and handing out free T-shirts with a team logo creates a team in name only. Project teams gel through joint work, idea sharing, and give-and-take in decision making and information exchange. A project manager can facilitate that kind of collaboration through regularly scheduled meetings, communication tools such as project newsletters and websites, and the physical colocation of team members. Off-site social events may also be valuable, since they can help groups cohere. You’ll want to encourage people to forge the bonds of trust and friendship that make team-based work stimulating and productive.

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Establish Norms of Behavior It takes time to build an effective project team. Individuals come to the effort with personal agendas. Some may view their new teammates as competitors for promotions, recognition, and rewards. Others may harbor grudges against one or more of those with whom they have been thrown together. And there’s always a member or two lacking in social skills. Such problems can undermine your project if they’re not contained or neutralized. One of the best ways to manage them is to set up unambiguous norms of behavior that apply equally to all. As Jon Katzenbach and Douglas Smith point out in The Wisdom of Teams, the most critical rules pertain to: • Attendance. The team cannot make decisions and accomplish its work if members fail to show up for meetings or joint work sessions. If you, the leader, are chronically late or absent, people will follow your example. • Interruptions. Turn cell phones off during meetings and work sessions. Also, make it clear that people are not to interrupt others. Everyone has a right to speak. • Sacred cows. Agree that no issues will be offlimits. For example, if a process-reengineering team knows that a change will upset a particular executive, its members should not be reluctant to discuss it.

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• Disagreements. Team players are bound to come up with competing solutions as they tackle problems. Encourage them to vent disagreements in constructive ways. • Confidentiality. Some team issues may be sensitive. Members will discuss them freely only if what is said within the team stays within the team. • Action orientation. The purpose of teams is not to meet and discuss. It’s to act and produce results. Make that clear from the beginning. What behavioral norms should your group observe? That depends on the purpose of the group and the personalities of its members. But the basics include mutual respect, a commitment to active listening, and an understanding of how to voice concerns and handle conflict. To guarantee the free flow of ideas, some groups may want to adopt specific guidelines that support calculated risk taking, for instance, or spell out procedures for acknowledging and handling failure. Whatever norms your group follows, make sure all members have a hand in establishing them—and that everyone agrees to abide by them. Members’ participation and acceptance will head off many future problems.

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Chapter 12

The Discipline of Teams A summary of the full-length HBR article by Jon R. Katzenbach and Douglas K. Smith, highlighting key ideas.

THE IDEA IN BRIEF The word team gets bandied about so loosely that many managers are oblivious to its real meaning—or its true potential. With a run-of-the-mill working group, performance is a function of what the members do as individuals. A team’s performance, by contrast, calls for both individual and mutual accountability. Though it may not seem like anything special, mutual accountability can lead to astonishing results. It enables a team to achieve performance levels that are far greater than the individual bests of the team’s members. Excerpted from Harvard Business Review, July–August 2005 (republished from 1993), Reprint #R0507P. To buy the full-length article, visit www.hbr.org.

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To achieve these benefits, team members must do more than listen, respond constructively, and provide support to one another. In addition to sharing these teambuilding values, they must share an essential discipline.

THE IDEA IN PRACTICE A team’s essential discipline comprises five characteristics: 1. A meaningful common purpose that the team has

helped shape. Most teams are responding to an initial mandate from outside the team. But to be successful, the team must “own” this purpose, develop its own spin on it. 2. Specific performance goals that flow from the

common purpose. For example, getting a new product to market in less than half the normal time. Compelling goals inspire and challenge a team, give it a sense of urgency. They also have a leveling effect, requiring members to focus on the collective effort necessary rather than any differences in title or status. 3. A mix of complementary skills. These include technical or functional expertise, problem-solving and decision-making skills, and interpersonal skills. Successful teams rarely have all the needed skills at the outset—they develop them as they learn what the challenge requires.

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4. A strong commitment to how the work gets

done. Teams must agree on who will do what jobs, how schedules will be established and honored, and how decisions will be made and modified. On a genuine team, each member does equivalent amounts of real work; all members, the leader included, contribute in concrete ways to the team’s collective work-products. 5. Mutual accountability. Trust and commitment cannot be coerced. The process of agreeing upon appropriate goals serves as the crucible in which members forge their accountability to each other—not just to the leader. Once the essential discipline has been established, a team is free to concentrate on the critical challenges it faces: • For a team whose purpose is to make recommendations, that means making a fast and constructive start and providing a clean handoff to those who will implement the recommendations. • For a team that makes or does things, it’s keeping the specific performance goals in sharp focus. • For a team that runs things, the primary task is distinguishing the challenges that require a real team approach from those that don’t. If a task doesn’t demand joint work-products, a working group can be the more effective option. Team opportunities are usually those in which hierarchy or organizational

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boundaries inhibit the skills and perspectives needed for optimal results. Little wonder, then, that teams have become the primary units of productivity in highperformance organizations.

Jon R. Katzenbach is a senior partner at Booz & Company and a former director of McKinsey & Company. Doug-

las K. Smith is an organizational consultant and a former partner at McKinsey & Company.

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Chapter 13

Effective Project Meetings Run your meetings well, and you’ll infuse your project with energy, momentum, and direction. How do you make them productive? Follow these simple guidelines.

Setting the Stage for the Meeting • Make sure a meeting is even necessary. If you can accomplish your goal efficiently without calling one (via e-mail, for example), do so—and avoid eating up everyone’s time. • Clarify the meeting’s objective. If it is to make a decision, explain that and give participants the time and materials needed to prepare. • Sound out key participants on important agenda items ahead of time. What you discover may suggest that alterations are in order. Adapted from Harvard Business Essentials: Managing Projects Large and Small (product #6198BC), Harvard Business Review Press, 2004, and Harvard ManageMentor, an online product of Harvard Business Publishing

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• Invite only people who have something to contribute or who can learn from the discussion. • Provide an agenda in advance that clearly supports the objective. • Insist that people get up to speed on the issues before they arrive, bring relevant materials with them, and show up ready to contribute to the discussion.

Running the Meeting • Restate the meeting’s purpose. This will sharpen the group’s focus. • Let everyone have a say. If one or two individuals are dominating the conversation or if certain attendees are shy about leaping in, say, “Thanks for those ideas, Phil. What are your thoughts about this problem, Charlotte?” • Keep the discussion centered on the key issues. • End with confirmation and an action plan that includes a clear time frame: “OK, we’ve decided to hire DataWhack to install the new servers. And, as agreed, I will obtain the purchase order today, Bill will phone the salesperson later this week and set up the schedule, and Janet will begin looking for someone to take the old equipment off our hands. We’ll regroup at the usual time next week to see where things stand.”

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Following Up • Send out a note summarizing the meeting’s outcomes. People will be encouraged by it because it’s evidence that the team is one step closer to its goal. • Remind individuals of their tasks and deadlines. • Offer support to anyone who may be overwhelmed with other work or may struggle with a task. People are often reluctant to ask for assistance, even when they recognize that they need it.

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Chapter 14

The Adaptive Approach to Project Management Does your project involve an unfamiliar technology or material? Is it substantially larger than others you’ve overseen? Are the tasks different from those your team has handled in the past? If you answered yes to one or more of those questions, the traditional approach to project management may not work. That’s because it takes for granted that you can pinpoint what needs to be done, what it will cost, and how much time you’ll need. In situations with higher levels of uncertainty—if you face unanticipated risks,

Adapted from “Project Adaptation: Dealing with What You Cannot Anticipate,” Harvard Business Essentials: Managing Projects Large and Small (product #6273BC), Harvard Business Review Press, 2004

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A NEW MODEL FOR SPONSORS The adaptive model of project management creates a new role for project sponsors, one that Robert Austin likened to venture capitalism in the 2002 Science article “Project Management and Discovery.” Rather than give teams a big pile of resources at the beginning, they support projects in stages, as results roll in. Like VCs, sponsors advance resources to purchase information and reduce uncertainty—and each investment gives them the option of remaining in the game. Task 1

Experiment Learn Task 2

Resources $$$$

Experiment Learn Task 3

Experiment Learn Task 4

for instance, or if the range of potential outcomes is very wide—decision tools such as return on investment, net present value, and internal rate of return (which assume predictability of future cash flows) cease to be useful. You may have to consider a more adaptive approach. In their research on large IT implementation projects, Lynda Applegate, Robert Austin, and Warren McFarlan (the authors of Corporate Information Strategy and Management) found that companies such as Cisco Systems

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have enjoyed success with adaptive project-management models that: • Approach tasks iteratively. Teams engage in small incremental tasks, evaluate the outcomes of those tasks, and make adjustments as they move forward. • Have fast cycles. Short lead times allow an iterative approach. • Emphasize early value delivery. Small, early deliverables encourage feedback and the incorporation of learning into subsequent activities. • Staff the project with people who can adapt. Some people are faster learners than others and are more amenable to change. Cisco refers to its approach as “rapid iterative prototyping.” Many tasks serve as probes—that is, as learning experiences for later steps. This tactic is analogous to the notion of the “cheap kills” that research and development organizations use to sort through many possibilities quickly and at low cost. When the right solution is not apparent, they try a number of simple experiments to separate promising and unpromising options. Even failed experiments provide insights into what will work.

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WHAT-IF PLANNING AND CHUNKING To enhance their ability to adapt to shifting conditions, some firms rely on the techniques that Cathleen Benko and F. Warren McFarlan call “what-if planning and chunking” in their book Connecting the Dots: Aligning Projects with Objectives in Unpredictable Times. Sweden-based software firm Ellipsus Systems used what-if planning to decide which programming standard—wireless application protocol (WAP) or Java—it would choose for its software. Since it was unclear which standard would dominate, cofounder Rikard Kjellberg designed projects based on both and then took early prototypes to a trade show to test participants’ preferences. His contingency planning led to a successful partnership with Java-maker Sun Microsystems. Minnesota hotel-management company Carlson Hospitality Worldwide uses chunking to break big, expensive projects into smaller, more manageable ones, thereby boosting their chances of receiving approval and

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funding. After the board of directors rejected a $15 million request to overhaul the company’s central reservation system, managers broke the project into work units that each had stand-alone benefits and minimal mutual dependencies. That is, if one chunk was canceled, others could still move ahead. The board soon approved the first chunk. Ultimately, Carlson’s new reservation system was voted best in the industry; its voice-reservation chunk alone generated $40 million in annual revenue by 2003. “Chunking helps us learn constantly and perpetually reassess our priorities,” says CIO Scott Heintzeman. “It also reduces risk and focuses people’s efforts on each work unit. And because the work on each chunk extends for no more than three to six months, people maintain their energy and enthusiasm.” Adapted from “Close the Gap Between Projects and Strategy,” Harvard Management Update (product #U0406A), June 2004

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Chapter 15

Why Good Projects Fail Anyway A summary of the full-length HBR article by Nadim F. Matta and Ronald N. Ashkenas, highlighting key ideas.

THE IDEA IN BRIEF Big projects fail at an astonishing rate—well over half, by some estimates. Why are efforts involving many people working over extended periods of time so problematic? Traditional project planning carries three serious risks: • White space: Planners leave gaps in the project plan by failing to anticipate all the project’s required activities and work streams. • Execution: Project team members fail to carry out designated activities properly. Excerpted from Harvard Business Review, September 2003, reprint #R0309H. To buy the full-length article, visit www.hbr.org.

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• Integration: Team members execute all tasks flawlessly—on time and within budget—but don’t knit all the project pieces together at the end. The project doesn’t deliver the intended results. Manage these risks with rapid-results initiatives: small projects designed to quickly deliver mini-versions of the big project’s end results. Through rapid-results initiatives, project team members iron out kinks early and on a small scale. Rapid-results teams serve as models for subsequent teams who can roll out the initiative on a larger scale with greater confidence. The teams feel the satisfaction of delivering real value, and their company gets early payback on its investments.

THE IDEA IN PRACTICE Rapid-results initiatives have several defining characteristics: • Results oriented: The initiatives produce measurable payoffs on a small scale. Example: The World Bank wanted to improve the productivity of 120,000 small-scale farmers in Nicaragua by 30% in 16 years. Its rapid-results initiatives included “increase pig weight on 30 farms by 30% in 100 days using enhanced corn seed.” • Vertical: The initiatives include people from different parts of the organization—or even different

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organizations—who work in tandem within a very short time frame to implement slices of several horizontal—or parallel-track—activities. The traditional emphasis on disintegrated, horizontal, longterm activities gives way to the integrated, vertical, and short-term. The teams uncover activities falling in the white space between horizontal project streams, and properly integrate all the activities. Example: Take a companywide CRM project. Traditionally, one team might analyze customers, another select the software, a third develop training programs. When the project’s finally complete, though, it may turn out that the salespeople won’t enter the requisite data because they don’t understand why they need to. Using rapid-results initiatives, a single team might be charged with increasing the revenues of one sales group in one region within four months. To reach that goal, team members would have to draw on the work of all the parallel teams. And they would quickly discover the salespeople’s resistance and other unforeseen issues. • Fast: The initiatives strive for results and lessons in less than 100 days. Designed to deliver quick wins, they more importantly change the way teams work. How? The short time frame establishes a sense of urgency from the start, poses personal challenges, and leaves no time to waste on interorganizational bickering. It also stimulates creativity

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and encourages team members to experiment with new ideas that deliver concrete results.

Balancing Vertical and Horizontal Activities Vertical, rapid-results initiatives offer many benefits. But that doesn’t mean you should eliminate all horizontal activities. Such activities offer cost-effective economies of scale. The key is to balance vertical and horizontal, spread insights among teams, and blend all activities into an overall implementation strategy. Example: Dissatisfied with its 8% revenue increase in two years, office-products company Avery Dennison launched 15 rapid-results teams in three North American divisions. After only three months, the teams were meeting their goals—e.g., securing one new order for an enhanced product with one large customer within 100 days. Top management extended the rapid-results process throughout the company, reinforcing it with an extensive employee communication program. As horizontal activities continued, dozens more teams started rapidresults initiatives. Results? $8 million+ in new sales, and $50 million in sales forecast by year-end.

Nadim F. Matta is a managing partner, and Ronald N. Ashkenas is a senior partner, of Schaffer Consulting in Stamford, Connecticut. 126

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Chapter 16

Monitoring and Controlling Your Project by Ray Sheen

Unlike processes—where the same people repeatedly perform the same activities—projects often involve unique activities (such as using new technologies, building new buildings, or writing new software) carried out by individuals who may be working together for the first time. So as a project leader, you’ll need to actively monitor progress to figure out whether your plan is really bringing the team closer to its objectives. When monitoring and controlling a project, you’ll follow five basic steps:

1. Track project activities It’s important to check in with team members regularly to make sure they’re completing their tasks and meeting quality standards. You can do this most effectively

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through team meetings if everyone works at the same location. However, given how common distributed teams are in today’s business environment, it can be difficult to get the entire group together. When that’s the case, I conduct separate working sessions with individuals or small groups needed for particular activities. For example, I recently participated in a “live meeting” conference call where engineers from three locations helped prepare a product-development proposal for a customer. If I had created a draft, sent it around for comments, and then tried to integrate all the feedback, it could easily have taken weeks to complete the document. Instead, I had the right engineers reviewing it over the phone for about three hours, until everybody agreed on the wording. After a working session like this, I loop the rest of the team in at a larger group meeting or through e-mail. I also use “buddy checks” to verify that tasks are done properly. When someone completes an activity, another team member looks at the results. This is not an in-depth technical analysis; it’s a quick check to confirm that the person who did the work hasn’t accidentally overlooked something or misunderstood the requirements. A team member checking a training plan for a new system, for example, would make certain that all departments in need of training have been included. If possible, have someone who will use the results of the activity do the buddy check. When I worked with a medical device company on developing a new product, I had its regulatory department review the design documentation and test data to flag any missing information that would be re-

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quired later for regulatory submittal. If a team member with a stake in the activity’s result is not available, you can do the buddy check yourself—but make it clear that it’s not a performance appraisal. It’s just one team member looking out for another.

2. Collect performance data A few companies have project management information systems that automatically generate reports. If you have access to one, by all means use it—but also seek out performance data through short pulse meetings, where team members share status updates on activities and assess risks, either face-to-face or virtually. I limit these to 10 minutes and discuss only the tasks started or finished since the last meeting. The purpose is to get a quick sense of where things are, not to roll up sleeves. If the team identifies any problems or risks, I resolve them in a separate working session with the appropriate individuals. I normally pulse projects on a weekly basis, which allows me to track progress adequately and identify problems in time to respond to them. However, when a project is in crisis mode, the “pulse rate” quickens. I once managed a project in which the power system for a new facility failed three days before the building needed to be up and running. An important business objective hinged on that deadline. The team worked around the clock to identify the cause of the failure, replace the destroyed component, and bring the facility back on line. All that would normally have taken two to three months, but we had three days, so I pulsed the project every three hours.

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3. Analyze performance to determine whether the plan still holds Activities seldom go precisely as anticipated. They may take more or less time; they may overrun or underrun the budget. A departure from your plan isn’t a problem unless it’s likely to compromise the team’s objectives. On one project, I had an engineer report at a pulse meeting that a new mold would be two weeks late. But since the mold wasn’t on our critical path and we had nearly six weeks of slack time in that portion of the schedule, the team didn’t need to take special action. If the late deliverable had put us in danger of missing an important goal, I would have called a meeting with the appropriate team members to figure out a solution. This is the time when careful project planning pays dividends. Knowing the critical path will help you decide which issues warrant a schedule change. If you’ve identified risks up front that could undermine your objectives, you can more easily recognize which snags are threats to the project’s success. Having estimated each activity’s duration and costs and carefully noted any uncertainties, you’ll be able to distinguish between variances that aren’t a big deal and those that suggest larger underlying problems. When a plan does need revising, you may have to extend the end date, apply budget reserves, remove deliverables from the project’s scope, or even cancel the project. On one software development project I oversaw, we had an excessively “buggy” first release. Before trying to fix the software, I quickly checked the requirements docu-

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ment and realized that the developers were using an outof-date version. We had to reschedule the software development task for that module, causing us to delay project completion by about a month, but the change clearly needed to be made.

4. Report progress to your stakeholders Some project managers and team members perceive stakeholder reviews—which involve preparing reports and conducting progress meetings—as wasted effort because they take time away from other activities. However, if managed properly, these reviews propel a project toward success. There are three types: management reviews, tollgate reviews, and technical reviews. For all three, record and circulate action items, and keep meeting minutes in the project file for future reference. The purpose of the management review is to manage risk. Stakeholders may examine several projects at a time to see if the portfolio as a whole will generate the desired business performance and to identify systemic weaknesses. They’ll look at individual projects on their own merits as well. Such reviews are normally held at regular intervals—monthly, for instance. When conducting them, keep in mind that your stakeholders care about reaching business goals, not about following the team’s day-to-day activities. I recently attended a review where the project leader spent nearly 30 minutes describing technical designs the team was considering and testing, which only bored and frustrated the stakeholders. Instead, he should have spent five minutes telling them the project was on schedule (it was), that the team had

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made progress on its technical analysis (it had), and that no new risks had been identified. Creating a project dashboard is a great way to summarize your objectives and show stakeholders whether the project, as currently planned and managed, will achieve them. (You can break it down into components such as schedule, cost, and performance.) This is often called a stoplight chart, since it usually indicates activity statuses in red, yellow, and green. Most companies have a standard format to help senior managers quickly and efficiently assess progress and risks on many projects. When using color coding, make sure everyone understands exactly what each color means. For example, do you list all incomplete tasks in red? Or are some of them green, because the plan for completion is approved and under way? When you need to report bad news in a management review, always couch it in terms of risks to project objectives. Explain how certain task delays will prevent the team from realizing project goals on time, for instance, or how a resource shortage will reduce the rigor of an activity and thus the quality of its deliverable. When you present problems, also give options for responding to them and discuss the risks associated with each solution. The stakeholders will decide which risks they want the business to take. The tollgate review (also called the stage-gate review, or phase-gate review) is a decision meeting, not a status check. It’s used when a business plans and executes projects in discrete phases. In it, the project team summarizes the results of the preceding phase and pre-

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sents a plan for the next phase. The stakeholders assess the plan, options, and risks, and then decide whether to approve, redirect, or cancel the project. If they say to proceed to the next phase, they also provide the team with the necessary resources, including funding. At a technical review (sometimes referred to as a peer review), an independent team of experts—internal or external consultants, say, or representatives from a regulatory agency—provides an in-depth analysis of project results. The purpose is to ensure that team members did the work accurately, completely, and to the right quality standard. Stakeholders may give a stamp of approval at this time: If the team has successfully completed one phase of the project, it can now proceed to a tollgate review for approval to begin the next phase.

5. Manage changes to the plan When revising a plan, you may make major changes or just minor tweaks that will allow the team to meet its objectives. If you propose major changes to your stakeholders, spell out the costs and risks of adopting them and those of sticking with the original plan. A defense contractor that I work with was asked by the Air Force to improve performance of a weapon-system component. After the Air Force reviewed the proposed options (which included costs, risks, and schedules) and selected one, the contractor synchronized updates to design documentation, manufacturing processes, supplier contracts, the project schedule, and the budget so the transition would be as seamless as possible. When making such large-scale

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revisions, record them (along with the rationale) on some type of change log in the project records. You can use your normal project-planning processes and techniques to revise your plan. Send the new plan to your team members, and explain any changes that affect them. Minor changes may come up as you’re implementing a contingency plan or working out details of a portion of the project that was planned only at a high level. The project team can usually manage these on its own, without seeking stakeholder approval, unless the changes will directly affect stakeholders or their departments.

As you’re monitoring your project, remember that meeting your objectives trumps everything else. Don’t get hung up on compliance with the original plan. In my experience, almost every project plan must be revised at some point—especially when you’re developing new products or systems, because what you learn in the early stages sheds light on how later-stage tasks should take shape. Don’t be afraid to change course if it will bring you within reach of your goals.

Ray Sheen teaches and consults on project and process management. He has more than 25 years of experience leading projects in defense, product development, manufacturing, IT, and other areas, and has run a project management office in GE’s Electrical Distribution business.

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Chapter 17

Managing People Problems on Your Team Your most important resource is your people. After you’ve done the hard work of selecting the right team members and getting them revved up for the project, you need to make sure they stay on task, pull their weight, work collaboratively, and reach the quality standards you’ve established with your stakeholders. If you don’t, you’re highly unlikely to meet your goals, let alone your deadlines and budget targets. Here’s how to recognize and deal with various people problems you may encounter as a project manager.

Adapted from Pocket Mentor: Managing Projects (product #1878), Harvard Business Review Press, 2006

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Team structure problems

Problem • Your team lacks necessary skills.

Possible causes

Potential impact

Recommended action

• You overlooked certain skill requirements during planning.

• The project doesn’t move forward as fast as it should, or it stalls.

• Arrange for a team member to be trained in the skills needed.

Possible causes

Potential impact

Recommended action

• This could happen for many reasons, ranging from sudden illness to departure from the organization.

• Severity depends on the skills and knowledge lost:

• Have backup team members at the ready.

• You discovered a need for new skills in the midst of the project.

Problem • A team member leaves.

• If you can easily redistribute the work or hire someone with the same expertise, the impact may be slight.

• Hire outside consultants or contractors who have the skills.

• Cross-train people so they can fill in for one another. • Make one person’s departure an opportunity to bring an even more skilled team member on board.

• If not, the loss could create a crisis.

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Interpersonal problems

Problem • Team members are too friendly.

Possible causes

Potential impact

Recommended action

• They spend excessive amounts of time chatting or discussing personal problems.

• Overall productivity decreases.

• Emphasize that social gatherings need to be planned for after work.

• Time is wasted, and the project slows down. • Hard-working team members resent those who work less efficiently.

Problem • Conflicts exist within the team.

• Reorganize team subgroups to disrupt cliques.

Possible causes

Potential impact

Recommended action

• People have a hard time reconciling different personalities, working styles, or areas of expertise.

• The schedule, quality of work, overall productivity, and team cohesiveness could all suffer.

• Focus team members on the project’s goals, not on personal feelings. • Separate the underlying causes from the surface disturbances, so you can solve problems at the root. • Propose solutions, not blame. (continued)

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Productivity problems (continued)

Problem • Time is spent on the wrong tasks.

Possible causes

Potential impact

Recommended action

• People manage their time poorly.

• Work on critical tasks is delayed.

• Clarify which tasks are most important.

• A team member prefers some tasks over others, regardless of relative importance.

• The overall project is delayed.

• Assign tasks to pairs of team members to work on together so they can keep each other in check. • Provide resources to help members improve time management skills.

• You’ve sent the wrong message about priorities.

Problem • The quality of the work is poor.

Possible causes

Potential impact

Recommended action

• A team member misunderstands the requirements of the job.

• Work must be redone, costing money and time.

• Be clear from the start about quality expectations and standards of measure.

• Different people measure the work by different standards. • Someone doesn’t have adequate skills to complete a task.

• The project fails.

• Develop an action plan for improving the quality of the team member’s work. • Provide training and support to develop skills.

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Chapter 18

The Tools of Cooperation and Change A summary of the full-length HBR article by Clayton M. Christensen, Matt Marx, and Howard H. Stevenson, highlighting key ideas.

Editor’s note: Sometimes you need to manage change within projects. Other times the projects themselves are agents of change in a company, and you have to overcome organizational resistance. Arm yourself with the right tools, and you can elicit cooperation rather than entrenchment.

THE IDEA IN BRIEF Why do managers struggle so hard to get employees’ cooperation on change initiatives? Even charismatic leaders Excerpted from Harvard Business Review, October 2006, reprint #R0610D. To buy the full-length article, visit www.hbr.org.

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have spotty records—winning commitment to change in some cases but failing dismally in others. According to Christensen, Marx, and Stevenson, too many leaders use the wrong change tools at the wrong time—wasting energy and risking their credibility. For example, a vision statement helps get people on board if they already agree on where their organization should go. Without that consensus, vision statements won’t change behavior—aside from provoking a collective rolling of eyes. How to wield the right change tools, at the right time? Gauge how strongly your people agree on 1) where they want to go and 2) how to get there. Then select tools based on the nature of employees’ agreement. For instance, if people disagree about goals and ways to achieve them (common during mergers), use power tools—such as threatening to make key decisions yourself. If employees have goals that differ from your company’s but agree on how work should be done (think independent contractors), use management tools—including training and performance measurement systems. Choose the correct tools, and you spur the changes your firm needs to stay ahead of rivals.

THE IDEA IN PRACTICE

Selecting the Right Change Tools Scenario #1: If employees agree on goals but disagree on how to achieve them, use leadership tools: vision, charisma, salesmanship, and role modeling.

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Example: In December 1995, Microsoft’s Bill Gates published his visionary “Internet Tidal Wave” memo. The memo persuaded employees that the World Wide Web would become integral to computing (which countered most employees’ beliefs). Employees responded with products that crippled Internet rival Netscape and maintained Microsoft’s dominance in the software industry (which employees and the company wanted). Scenario #2: If employees disagree on both goals and how to get there, use power tools: threats, hiring and promotion, control systems, and coercion. Example: To merge JP Morgan with BankOne, CEO Jamie Dimon slashed hundreds of executives’ salaries 20% to 50%. He threatened to select a single IT platform to replace the firm’s myriad systems if the IT staff didn’t pick one themselves in six weeks. And he told branch managers they’d lose their jobs if they failed to meet sales quotas. Scenario #3: If employees agree on both goals and how to get there, use culture tools to counter complacence. In particular, use “disaggregation” (separating the organization into entities that each have their own agreed-upon goals and plans for achieving them) to disrupt high-level agreement about goals and methods that could otherwise preserve the status quo.

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Example: Hewlett-Packard recognized that its new inkjet printer business—with its unique technology and economics—could thrive only if it was protected from the cultural expectations of its traditional laser printing business. Disaggregating the two businesses eliminated the need for cooperation between them and enabled the groups to operate on very different profit models. Scenario #4: If employees disagree on goals but agree on how work should be done, use management tools: measurement systems, standard operating procedures, and training. Example: In many companies, the reasons unionized manufacturing workers come to work differ markedly from those of senior managers. But as long as workers accept management’s assertion that following certain manufacturing procedures will help them make products with desired quality and cost, they will follow those procedures.

Clayton M. Christensen is the Kim B. Clark Professor of Business Administration at Harvard Business School in Boston. Matt Marx was a doctoral student at HBS. How-

ard H. Stevenson is HBS’s Sarofim-Rock Baker Foundation Professor of Business Administration, Emeritus, and the chairman of the board at Harvard Business Publishing.

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Chapter 19

Don’t Throw Good Money (or Time) After Bad by Jimmy Guterman

You approved the development of a high-profile new product for your company a year ago—but now things aren’t going well. Despite previous forecasts that customers needed your product, the market has changed, and the response is uncertain at best. But you’re not going to give up and throw away $10 million, are you? Actually, spending another dime on a doomed product is the wrong decision. Yet chasing after sunk costs (investments that are no longer recoverable) is a common error. Just another couple hundred thousand dollars, you say to yourself, and we’ll be able to recoup our investment.

Adapted from Harvard Management Update (product #U0205D), May 2002

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Don’t fall for that line of reasoning. True managerial wisdom lies in a kind of forgetfulness—the ability to ignore prior investments, costs, and benefits, and to focus instead on the situation at hand. When faced with insufficient information and tight time constraints, managers regularly use simplifying strategies, known as judgment heuristics, as decision-making shortcuts. Problem is, human psychology always enters into the process, leading to cognitive biases—conclusions based on misperceptions or faulty inferences. The sunk-cost trap is a type of cognitive bias. Harvard Business School professor Max H. Bazerman, author of Judgment in Managerial Decision Making, likens this “nonrational escalation of commitment” to standing at a bus stop for hour after hour. At some point, you have to admit that the bus is not coming. You can avoid escalating your company’s commitment to a product, person, or strategy beyond a reasonable point. These guidelines will help.

Don’t make choices merely to justify past decisions Should you retain an underperforming, abusive contractor simply because you hired him and don’t want to be accused of flip-flopping? Should you continue to extend credit to a company that has consistently failed to meet its obligations, since it promises that just one more loan will turn everything around? In the abstract, the answer to both questions is clearly no. But it’s easy to let context obscure your better judgment. Avoid this problem by gathering external evidence to support your choices. When deciding whether to move 144

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forward on a project, consult as many outside sources and devil’s advocates as you can, so you’re sure to consider how people other than your supervisor might view your quandary. Failure to see the big picture often results in overly cautious decision making, which in turn can lead to the sunk-cost trap.

Focus on the quality of the decision, not the quality of the outcome Many people fall into the sunk-cost trap because they fear being judged for the unfortunate consequences of their good-at-the-time decisions. When things go sour, HBS professor emeritus Howard Raiffa explains, decision makers become “more worried about acts of commission, like changing course, than acts of omission, like continuing to take the company down the wrong road. If I just go along as things are now, the thinking goes, things might change. If I commit an act of commission and admit that the current course is wrongheaded, that may trigger a review. . . . There are huge internal and external pressures to keep going even if all parties realize it’s wrong and it’s going to stay wrong.” If you’re managing a decision maker, you can prevent unnecessary escalations of commitment by making it clear that no one will be punished for not owning a crystal ball.

The more you equate time with money, the more susceptible you are to the sunk-cost trap That’s the conclusion Hong Kong University of Science and Technology marketing professor Dilip Soman 145

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reached after conducting a series of sunk-cost experiments. As he noted in a 2001 article in the Journal of Behavioral Decision Making, sunk costs don’t usually trip us up when our main investment is time. But they do present a problem when we become more adept at converting that investment into a monetary equivalent.

Use decision rules to prevent cloudy thinking In Judgment in Managerial Decision Making, Bazerman lays out a common scenario: “You personally decided to hire a new middle-level manager to work for you. Although you had expected excellent performance, early reports suggest that she is not performing as you had hoped. Should you fire her? Perhaps you really can’t afford her current level of performance. On the other hand, you have invested a fair amount in her training. Furthermore, she may just be in the process of learning the ropes. So you decide to invest in her a bit longer and provide additional resources so that she can succeed. But still she does not perform as expected. Although you have more reason to ‘cut your losses,’ you now have even more invested in this employee.” Precise targets can help you avoid such rounds of rationalizing. Establish in advance how much time and money you’re willing to pour into a project or person before you need to see specific results. As the investment sage Warren Buffett once said, “When you find yourself in a hole, the best thing you can do is stop digging.” Targets tell you when to put down the shovel. They enable

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you to discriminate, says Bazerman, “between situations in which persistence will pay off and situations in which it will not.”

Jimmy Guterman was a senior editor at hbr.org.

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Closeout

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Chapter 20

Handing Off Authority and Control by Ray Sheen

Now that you’ve executed your project, it’s time to gauge your success and then finalize activities, ranging from transferring control of new systems or facilities to presenting deliverables to stakeholders. Why not finalize activities first? Because you can’t know when to close up shop until you’ve determined whether you’ve met your objectives. In other words, success means achieving the goals in your charter and scope statement—not necessarily finishing all the tasks on your Gantt chart. Whether your team is releasing a product, adopting a new system, opening a facility, or improving a process, you’ll need to validate that those goals, if still relevant, have been reached. Since stakeholders care far more about realizing business ben-

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efits than they do about adhering to the plan’s “critical path,” the team needs to get out of the weeds and sharpen its focus on those benefits as it completes the project. Awhile back, I bumped into someone I had worked with years ago on a product-development initiative, and he mentioned that it was one of the best projects our organization had done. After we parted ways, I tried to reconstruct what was so good about it, because it was not well planned or executed. I realized it was the closeout phase that saved us. In our plan, we had overlooked some business systems that had to be changed to accommodate the new product; we were late getting staff assigned, so we soon fell behind schedule; and we had to replan the project on several occasions as a result of estimating errors and technical problems. Scrambling to recover from the delays, we went over budget by about 10%. In the endgame, however, we made up for those earlier problems by meeting market needs. We made sure that when the product launched, it worked well, it was easy for customers to order and for us to build, and our business systems could support it without difficulty. All that paid off—sales exceeded expectations. That’s why stakeholders viewed the project as a success, despite the stumbles in planning and execution. Once you’ve achieved your objectives—or determined that they’re no longer relevant—you’ll take one of three approaches to winding down your project:

The team hands off the project to itself In such cases, team members become the primary users and maintainers of their own deliverables. When I was

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at GE, for example, we had a project team that designed and oversaw the installation of a new high-voltage power test facility. Once that was up and running, the head of the team and several other members went on to manage the facility. If your team inherits its own deliverables, it will need to close any administrative accounts or files (such as supplier contracts and purchase orders) associated with development and open new ones for operational deployment.

The team terminates the project Here, all activities come to a halt, and the organization either releases or redeploys the resources. This can happen when a project has problems, such as a massive overrun, but sometimes it’s due to forces outside the team’s control. For instance, I once worked with several project teams on coordinating financial processes for two companies planning to merge. The teams had been in place for months and had made great progress when an unexpected government ruling barred the merger at the last minute. The teams disbanded within 24 hours. This type of closeout is administratively straightforward (the end is indisputable, after all), but it can be emotionally difficult because people often lose their assignments—or their jobs—without warning.

The team integrates the project When using this approach—by far the most common and the most challenging—your team must ensure that others embrace its deliverables and apply them appropriately. In the dozens of new-product initiatives I’ve helped

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manage, it has taken as much or more time and work to hand off the product design to the manufacturing and quality organizations and to ensure the training of sales, marketing, and service staff as it has to design, develop, and validate the products themselves. As you integrate your project, you may face organizational resistance to change. If you think that will happen, you can add a transition phase to the project that includes pilot runs, beta tests, and any other activities that will make adoption easier. Clearly, your closeout method will depend largely on business conditions—and so will the tools and techniques you’ll apply within it. Here are a few I’ve found especially helpful in managing expectations as projects near completion:

The punchlist This is used mainly in construction projects, but it works well for any type of project where people may try to slide in extra requests—for example, additional features—at the end. The team meets with the stakeholders and reviews the results of project activities. During that review, everyone helps identify remaining tasks, which you put on a “punchlist” of final action items. The team then tackles each item, and when everything on the punchlist is finished, so is the project. Because stakeholders have already agreed on your final to-dos, they’ll be much less likely to ask for “just one more thing” at this stage. The punchlist is a good fit when you need to terminate a project, because the team may have a hard time letting go, and this focuses the group on closure. While working with a contract manufacturer of plastic parts several 154

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years ago, I helped a team use this tool to ensure that all the tests, inspections, and pilot runs needed to certify a new mold were done and that the mold was brought on line in a timely manner.

The “stakeholder handshake” Projects that have a fuzzy scope statement—as many research initiatives and small, informal projects do—benefit from this technique because it keeps the work from going too far beyond the plan’s boundaries. Meet with your key stakeholders to compare the project’s accomplishments with the contract or scope statement, and ask them to agree on whether the project is indeed finished. Have them set an end point or elect to close the project now and, if necessary, open a new one. Such meetings tend to include wide-ranging discussions of options, so it’s good to come prepared with several proposals. Following the meeting, document the stakeholders’ decision and circulate it so there’s no confusion. When I conduct a project-management assessment for an organization, I often close it in this fashion. Many times, I’ve been asked to “see what we need to improve.” After I complete my review, I meet with the executive who hired me. Usually we agree that the assessment is over, discuss the findings, and then determine if I’m needed to help implement them.

The “scope creep parking lot” During project execution, eager stakeholders may have proposed additional ideas, or team members may have been tempted to add bells and whistles. Ideally, you’ve captured those items in a list that some project managers call the “scope creep parking lot,” so they’re not lost— 155

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but they also haven’t derailed the plan by introducing new activities or changing boundaries. Now that you’re closing the project, it’s time to review this list so you can create follow-on proposals for your stakeholders. This technique can be effective when a team prepares to hand off a project to itself because stakeholders may be more likely to accept the deliverables if they know they’ll have the opportunity to tweak them later. I’ve used the scope creep parking lot on several software-development projects. In each case, although minor issues were found during user-acceptance testing, the projects could close because we worked them into the scope for the next release. Whichever closeout approach and tools you use, don’t forget to celebrate your team’s achievements. Success breeds success. Even on projects that weren’t perfectly planned or executed, team members have worked hard to meet the business objectives and should be rewarded if they’ve done so. This will encourage them to do good work for you in the future—and the positive example will prompt other teams to achieve their project goals as well. Hold off on discussing opportunities for improvement. It’s best to do that in a separate lessons-learned session that’s focused on improving the way you manage the next project. For now, take a moment to “bask in the glow” of your current project.

Ray Sheen teaches and consults on project and process management. He has more than 25 years of experience leading projects in defense, product development, manufacturing, IT, and other areas, and has run a project management office in GE’s Electrical Distribution business. 156

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Chapter 21

Capturing Lessons Learned by Ray Sheen

Though every project is different, you can and should always learn from what you’ve just done. Companies with a project management office (PMO) conduct a lessonslearned session—sometimes called a postmortem or an after-action review—as a formal part of each project’s closeout. Those without a PMO typically share insights informally, as team members reminisce. Either way, it’s important to capture learning while the experience is still fresh. For example, I recently led a small project that lasted only a few months, and the team gathered for a dinner immediately after we wrapped things up to talk about what went right and what went wrong. It was a great conversation, and the next project we do will be better because of it. Since the project had a short time frame and the team was intact for the whole thing, it was relatively

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easy to discuss all aspects, from early planning through completion. When we returned from the dinner, one of the other team members and I updated the project folder with notes about our lessons learned. By contrast, when I managed an engineering department at a Fortune 500 company, some of our projects lasted three years, and the core teams inevitably changed over time. I remember conducting a lessons-learned session with a product development team right after it had launched a new offering. Unfortunately, only one person in the room had been on board back when the project began—and she had moved into a different role by the time it was winding down. With the benefit of hindsight, we could spot errors that the original team had made in the project plan. But we could not identify the events or explain the thinking that led to those errors, since most of us had not been there. From then on, I took a different approach to long-term projects: I started gathering lessons after each phase rather than waiting until the project’s end, so the team could clearly recall and accurately analyze what happened. This had the added bonus of allowing us to incorporate the lessons sooner. When I conduct lessons-learned sessions, I follow a four-step process:

1. Evaluate the business case The first question I ask is, “Has the project delivered on its promised result?” This isn’t meant to help you judge how well the team did the work; it’s to gauge whether the project has met senior management’s expectations

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Capturing Lessons Learned

as clarified in the project selection and approval process—and whether those goals were really within reach. Projects are approved on the basis of forecasted business benefits, such as sales growth, cost reduction, cycle-time improvement, defect reduction, or increased capacity. Whatever the forecasted benefit, has it been realized? If not, were the original assumptions and project justifications inaccurate? By carefully examining these issues and sharing the findings with the project’s sponsor, a team can improve its organization’s ability to select projects and to establish realistic objectives in project charters. If you have a PMO, it will normally take responsibility for incorporating such lessons into projectinitiation processes.

2. Evaluate the project plan Next I ask, “Was the project plan reasonable and appropriate for the project goal and business conditions?” I consider whether it excluded any necessary activities or included any unnecessary ones. I also look at the cost and schedule estimates for each activity. These should reflect the business and technology conditions at the time the project began and provide sensible buffers. Then I review the initial risk assessment to determine which risks were not anticipated, which ones were improperly rated, and which response approaches were inadequate. Finally, I consider the practices established for both team and stakeholder communication. Did the plan allow enough opportunities for updates and information exchange? Did conversations take place at the right times,

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Closeout

with the right people? Were decisions made in a timely fashion?

3. Evaluate the project-management methodology The third question I ask is, “Were the organization’s project-management procedures and systems beneficial?” To answer it, I focus on whether the company even has procedures, templates, or checklists; how current and relevant they are (if they do exist); how appropriate the mandated reviews and control points were for the project; and how useful the project-management information system was in communicating the project’s plans and status to all the players. Lessons learned are often embodied in companies’ project-management procedures and systems. When I served as a consultant to a midsize contract manufacturer, I was surprised to find that it had no centralized projectmanagement procedures, even though all of its work was project based. The firm simply hired experienced project managers and allowed them free rein. This led to a “rock star” mentality among project managers and no consistency in approach. Anyone assigned to a new project team had to learn new scheduling, budgeting, and reporting techniques. The duplication of systems and resulting inefficiency in project execution took a high toll on the organization. Individuals participating on multiple projects had to support multiple, often conflicting, meetings and report formats, leading to numerous “re-dos.” The company established a PMO, and over the

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Capturing Lessons Learned

next three to four months we created the procedures and systems that allowed for coordinated, simplified project planning and execution.

4. Evaluate individuals’ performance Last, I ask, “What feedback do I need to give team members on their performance (good or bad), and what should I tell their supervisors?” I recommend following this step, even if it’s not officially required, for all core team members. I typically ask the full team to help identify the “superheroes” among them. This both publicly reinforces the importance of contributing your best and minimizes the impression that the project leader is playing favorites. The members with poor performance I address individually. Of course, specific methods for conducting any performance appraisals must be in accordance with local human resource practices.

An effective lessons-learned process encourages continuous improvement. However, in my experience, the reports from these sessions are seldom read by anyone—so don’t pin all your hopes on the documentation you’ve tucked away in the project file. Instead, turn the lessons into a list of action items for the PMO or for your team members to ensure that they are incorporated into the next project. Apply the insights right away by updating checklists, tweaking review processes, and making any other necessary adjustments before the next project launches.

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Closeout

Ray Sheen teaches and consults on project and process management. He has more than 25 years of experience leading projects in defense, product development, manufacturing, IT, and other areas, and has run a project management office in GE’s Electrical Distribution business.

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Glossary

Charter. A concise written description of the project’s intended work. The charter may contain the name of the sponsor, the project’s benefits to the organization, a description of the objectives, the expected time frame, and a budget.

Critical Path Method. A planning technique used for complex projects that consist of several activities. Any activities that need to be completed before others can move forward are considered “critical”—in other words, necessary for the on-time success of the project. The total duration of the project is defined by the critical path.

Gantt chart. A bar chart showing when project tasks should begin and when they should end.

Launch. A special meeting or event that marks a project’s official beginning.

Adapted from Harvard Business Essentials: Managing Projects Large and Small (product #3213), Harvard Business Review Press, 2004.

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Glossary

Management review. A meeting where stakeholders may examine several projects together, as well as individually, to see if the portfolio as a whole will generate the desired business results and to identify weaknesses.

Network diagram. A scheduling chart that indicates all the relationships between tasks and reveals the critical path. Generally synonymous with a PERT chart (below).

Performance Evaluation and Review Technique (PERT).  A scheduling method that, when charted, represents every task as a node that connects with other nodes required to complete the project. A PERT chart may have many parallel or interconnecting networks of tasks, so periodic reviews are encouraged for complex projects. Unlike the Gantt chart, it indicates all the important task relationships and project milestones.

Post-evaluation. A meeting where the project team debriefs and documents its process for the purpose of learning and sharing lessons and making improvements. Also called a lessons-learned session, a postmortem, or an after-action review.

Project management office. A corporate office (typically in a large company) that establishes processes and templates to guide an organization’s project managers in planning and execution, provides assistance to individuals trying to apply those processes, and sometimes manages individual projects.

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Glossary

Project Steering Committee. A group that approves the project charter, secures resources, and adjudicates all requests to change key project elements, including deliverables, the schedule, and the budget.

Punchlist. The project team’s final list of action items, approved by key stakeholders.

Scope creep. The tendency (often as a result of pressure from stakeholders) to permit changes that exceed a project’s scope and may wreak havoc on the schedule, the quality of the work, or the budget.

Scope creep parking lot. A list of additional ideas or bells and whistles proposed during a project. The idea is to “park” them so they can be revisited later, without danger of derailing the current project.

Stoplight chart. A project-monitoring tool that uses red, yellow, and green color coding to indicate the status of each project activity.

Sunk costs. Project investments that are no longer recoverable.

Technical review. A meeting where an independent team of experts provides an in-depth analysis of project results to ensure that team members did the work accurately, completely, and to the right quality standard. Sometimes called a peer review.

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Glossary

Tollgate review. A meeting where the project team summarizes the results of the preceding phase and presents a plan for the next phase so stakeholders can decide whether to approve, redirect, or cancel the project. Also called a stage-gate review, or a phase-gate review.

Variance. The difference (positive or negative) between actual and expected results in the budget. Managers use variance to spot sources of trouble and areas of exceptional performance.

Work Breakdown Structure (WBS). A planning routine that breaks down a project’s goal into the many tasks required to achieve it. The time and money needed to complete those tasks are then estimated.

166

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Index

accountability, 109 action orientation, 106 adaptive approach, to project management, 117–121 after-action review, 157–162 agenda, for team meetings, 20–21 aggregate planning, 58–59 assignments, planning, 13–14 behavioral norms, 101, 105–106 bottlenecks, 16, 84 brainstorming, 68–69 budget developing a, 17–18 monitoring, 18–19 build-up phase, 4–5, 13–18, 65–110 assignment planning in, 13–14 budget development in, 17–18 establishing behavioral norms in, 105–106 launch meetings in, 16, 101–104 priority setting in, 65–71 schedule creation in, 14–16, 77–85 team assembly in, 13 team building in, 104 team discipline in, 107–110 time-boxing in, 73–75

H6081.indb 167

capital expenditures, 17–18 change control board, 59–60 change management, 133–134, 139–142 change tools, 139–142 charter, 41–45 definition of, 163 elements of, 41 example of, 42–43 explaining, at launch meeting, 103 objectives clearly stated in, 43–44 sample, 68–69 scope of, 45 time frame in, 44 charts Gantt, 15, 81, 82, 163 PERT, 14, 81, 83, 164 stoplight, 132 chunking, 120–121 closeout phase, 4, 23–29, 151–162 debrief with team in, 27 performance evaluation in, 23–26, 151–152 post-evaluation in, 157–162 post-evaluation report in, 27–29

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Index

closeout phase (continued) project closure in, 26–27, 151–156 cognitive bias, 49–50 communication, among stakeholders, 7 confidentiality, 106 consensus, 103 costs determining, 17–18 extra, 19 sunk, 143–146, 165 critical path, 130 Critical Path Method (CPM), 14, 79–81, 163 deadlines pressure of, 22–23 setting, 44 working backward from, 14–16 debriefing, 27 decision rules, 146–147 delays, tips for dealing with, 20–21 delegation of assignments, 14 reverse, 15 tips for effective, 15 deliverables early, 119 handoff of, 152–153 integration of, 153–154 draft schedule, 79–83

reasons for, 123–126 rush to, 87–100 “fuzzy front end,” 47–51, 60 Gantt chart, 15, 81, 82, 163 goal setting, 6–7 horizontal initiatives, 126 implementation phase, 4, 18–23, 113–147 budget monitoring in, 18–19 change management in, 133–134, 139–142 controlling scope creep in, 60–62 failure in, 123 people problems in, 135–138 problem management in, 22–23 progress reporting in, 19, 131–133 project monitoring in, 18–19, 127–134 team meetings in, 19–22, 113–115 incentives describing, 104 for on-time delivery, 21 integration failure, 124 interpersonal problems, 137 interpersonal skills, 34, 35 iterative development, 97–98, 119

execution phase. See implementation phase expectations, setting realistic, 50–51, 104

judgment heuristics, 144

failure rates, 53, 123

launch, 163 lessons-learned session, 157–162

kickoff/launch meetings, 16, 101–104

168

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Index

management review, 131–132, 164 meetings attendance at, 105 following up after, 115 interruptions during, 105 kickoff/launch, 16, 101–104, 163 pulse, 129 running, 114 setting stage for, 113–114 team, 19–22, 113–115 mutual accountability, 109 network diagram, 78, 80–81, 164 ongoing tasks, 28 organization, 7 organizational objectives, alignment with, 37 organizational skills, 34 overcommitments, 84 overhead, 18 oversights, 84 overtime, 19 peer review, 133, 165 people problems, 23, 135–138 performance data, 129 performance evaluation, 23–26, 130–131, 151–152 Performance Evaluation and Review Technique (PERT) chart, 14, 81, 83, 164 periodic system prototyping, 61 personnel costs, 17 personnel problems, 23, 135–138 phase-gate review, 132–133, 166 planning phase, 3–12, 41–62 aggregate planning in, 58–59 charter and, 41–45 defining objectives in, 6–7

determining scope, resources, and tasks in, 8–12, 57–60 failure in, 123 “fuzzy front end” and, 47–51 preparing for trade-offs in, 9 problem definition in, 5, 48, 49 project premortem in, 53–56 setting realistic expectations in, 50–51 stakeholder identification in, 5–6 post-evaluation, 27, 157–162, 164 post-evaluation report, 27–29 postmortem, 157–162 premortem, 53–56 priority setting, 65–71 problem definition, 5, 48, 49 problem management, 22–23 problem-solving skills, 34 product development, 58–59, 87–100 productivity, 73–75, 138 progress reporting, 19, 131–133 project creep, 57–62 project dashboard, 132 project management adaptive approach to, 117–121 build-up phase, 4, 13–18, 65–110 closeout phase, 4, 23–29, 151–162 implementation phase, 4, 18–23, 113–147 methodology, evaluation of, 160–161 people involved in, 31–37 planning phase, 3–12, 41–62 tools, 10–12, 14, 24–26 project management office (PMO), 28, 157, 164 project manager, 31–32, 45

169

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Index

project monitoring, 18–19, 127–134 project network diagram, 78, 80–81, 164 project objectives alignment with, 37 in charter, 43–44 clarifying, 66–67 defining, 6–7 team member alignment with, 37 project plan, 68–70, 130–131, 159–160 project premortem, 53–56 project slowdowns, 20–21 project steering committee, 36, 165 project termination, 153 prospective hindsight, 53–56 pulse meetings, 129 punchlist, 154–155, 165 quality issues, 22–23 versus cost and time, 9 versus speed, 87–100 standards, 7 rapid development approach, 87–100 rapid iterative prototyping, 119 rapid-results initiatives, 124–126 reports, post-evaluation, 27–29 research costs, 17 resources available, 104 deploying additional, 20 determining, 8–9 reverse delegation, 15 risk assessment, 29 rush to failure, 87–100

sacred cows, 105 schedule creating, 14–16, 77–85 draft, 79–83 errors in, 83–84 optimizing, 83–85 rushed, 87–100 scope, 8–9, 20, 45, 58 scope creep, 22, 57–62, 165 “scope creep parking lot,” 155–156, 165 scope statement, 58 slack time, 84–85 SMART objectives, 6–7 software, project monitoring, 18–19 space costs, 17 sponsors, 31, 45, 50–51, 102, 118 stage-gate review, 132–133, 166 “stakeholder handshake,” 155 stakeholder reviews, 131 stakeholders clarifying objectives with, 66–67 identifying, 5–6 input from, 48–49 renegotiating with, 20 steering committee, 36, 165 stoplight chart, 132, 165 sunk costs, 143–146, 165 supply costs, 17 tasks approaching iteratively, 119 determining major, 8–12 examining relationships between, 77–78 ongoing, 28 prioritizing, 65–71 scheduling, 77–85 tracking, 127–129

170

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Index

team assembling your, 13 discipline, 107–110 productivity problems, 138 structure problems, 136 team building, 104 team leader, 32–34 team meetings, 19–22, 113–115 team members alignment of, with objectives, 37 behavioral norms for, 105–106 conflicts among, 106, 137 contributions and benefits, 35–36 criteria for, 34–35 debriefing, 27 entering and exiting of, 35 evaluating performance of, 161 monitoring and control of, 127–134 organizing, 67–68 planning assignments for, 13–14 problems with, 23, 135–138

technical review, 133, 165 technical skills, 34, 35 time, versus quality and cost, 9 time-boxing, 73–75 time frame, 44 time slippage, 22 tollgate review, 132–133, 166 trade-offs, 9 training, 13 training costs, 17 travel costs, 17 uncertainty, 47–48, 117–118 variance, 166 vertical initiatives, 124–125, 126 what-if planning, 120 white space, 123 Work Breakdown Structure (WBS), 8–12, 13, 166 “working backward,” 14–15, 49–50 workload imbalances, 84

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Notes

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Notes

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Notes

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Smarter than the average guide

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HBR Guide to Managing Up and Across

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Harvard Business Review Guides Arm yourself with the advice you need to succeed on the job, from the most trusted brand in business. Packed with how-to essentials from leading experts, the HBR Guides provide smart answers to your most pressing work challenges.

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HBR Guide to Managing Up and Across

HARVARD BUSINESS REVIEW PRESS Boston, Massachusetts

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Find more digital content or join the discussion on www.hbr.org. The web addresses referenced and linked in this book were live and correct at the time of the book’s publication but may be subject to change. Copyright 2013 Harvard Business School Publishing Corporation All rights reserved No part of this publication may be reproduced, stored in or introduced into a retrieval system, or transmitted, in any form, or by any means (electronic, mechanical, photocopying, recording, or otherwise), without the prior permission of the publisher. Requests for permission should be directed to [email protected], or mailed to Permissions, Harvard Business School Publishing, 60 Harvard Way, Boston, Massachusetts 02163. Library of Congress Cataloging-in-Publication Data Guide to managing up and across. p. cm. — (Harvard business review guides) Includes index. isbn 978-1-4221-8760-9 (alk. paper) 1. Managing your boss. 2. Management—Psychological aspects. 3. Interpersonal relations. hf5548.83.g85 2012 650.1'3—dc23 2012025301

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What You’ll Learn

Does your boss make you want to scream? Do you have more than one boss? Do you spend your day herding cats? Working across departmental silos? Corralling contractors? Then you know that managing up and across your company is critical to doing your job well. It’s all about understanding your boss’s and colleagues’ priorities, pressures, and work styles. You need to manage up and across not just because you may have a problem boss, incompetent colleagues, or projects that involve stakeholders flung far and wide. You need to manage up and across, for example, to get your marketing and sales folks to see that your project will help them meet their goals, too; to establish authority with higher-ups so they’ll bless your new product ideas; to secure people’s time for a new team when they’re already feeling overextended. Managing up and across will help you get the information and resources you need to solve your complex problems, increase your effectiveness, and make your work more enjoyable.

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What You’ll Learn

You’ll get better at: • Getting what you need from people who don’t report to you • Coping with micromanaging, conflict-aversive, or generally incompetent bosses • Discovering what drives colleagues of all ages • Partnering with your boss—and her boss • Selling your ideas up and across your company • Making the most of your boss’s influence • Establishing a shared vision and commitment • Juggling multiple bosses’ priorities • Tailoring your pitch to your audience • Collaborating with remote colleagues • Working with a new boss • Navigating office politics

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Contents

Section 1: MANAGING UP Managing Your Boss

3

Build a strong partnership with your boss by clarifying her priorities and your needs. BY LINDA A. HILL AND KENT LINEBACK

Winning Over Your New Boss

17

Make yourself indispensable. BY LEW MCCREARY

Steps for Presenting Problems or Opportunities to Your Boss

25

Get the support and resources you need to advance your agenda.

Manage Up with Your Mentor’s Guidance

31

Your mentor can help you build a better relationship with your boss. BY JEANNE C. MEISTER

Change the Way You Persuade

35

Tailor your idea to your audience. BY GARY A. WILLIAMS AND ROBERT B. MILLER

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Contents

Get to Know Your Boss’s Boss

39

Accelerate your career. BY PRISCILLA CLAMAN

How to Make Your Boss Look Good—Without Becoming a Sycophant

43

Sell your boss to his boss. BY MICHAEL SCHRAGE

Stop Being Micromanaged

47

…and start focusing your boss on the big picture BY AMY GALLO

Dealing with Your Incompetent Boss

55

Turn your boss’s weaknesses into opportunities for you to shine. BY AMY GALLO

Coping with a Conflict-Averse Boss

61

Make bad news bearable so your boss won’t run for the hills. BY ANNE FIELD

How to Give Your Boss Feedback

65

…without putting your career in jeopardy BY AMY GALLO

Managing Multiple Bosses

71

Meet their competing demands without getting caught in the middle. BY AMY GALLO

viii

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Contents

Section 2: MANAGING ACROSS What Makes a Leader?

81

Polish your people skills by focusing on your colleagues’ priorities and pressures—not your own. BY DANIEL GOLEMAN

The Discipline of Teams

111

How to lead a group of people who don’t report to you BY JON R. KATZENBACH AND DOUGLAS K. SMITH

Managing Remote Relationships

115

What it takes to collaborate with people you don’t see every day BY KAREN DILLON

A Smarter Way to Network

125

Build a strong support system for your next crisis or opportunity. BY ROB CROSS AND ROBERT THOMAS

How to Deal with Office Politics

143

Focus on mutual advantage. BY LINDA A. HILL AND KENT LINEBACK

Make Your Enemies Your Allies

149

Three steps to reversing a rivalry at work BY BRIAN UZZI AND SHANNON DUNLAP

The Necessary Art of Persuasion

161

Win people over by establishing credibility, discovering common ground, sharing vivid stories, and developing an emotional connection. BY JAY A. CONGER

ix

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Contents

Three Ways Not to Persuade

165

Avoid these common mistakes. BY JAY A. CONGER

Harnessing the Science of Persuasion

169

Influence your colleagues by appealing to basic needs such as reciprocity and their desire to be liked. BY ROBERT B. CIALDINI

How to Get Your Colleagues’ Attention

173

Frame your message so your colleagues immediately see what you need from them and why. BY AMY GALLO

Collaborating Across Generations

177

Work more effectively with Boomers, Xers, and Ys. BY TAMARA ERICKSON

When the Direct Approach Backfires, Try Indirect Influence

185

What they don’t teach you in business school BY MARTHA CRAUMER

Index

189

x

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Section 1

Managing Up Neglecting to manage up may cost you promotions or chances to put your great ideas into action. But understanding what makes your boss and his cohort tick and embracing their priorities will open doors for you. This isn’t kissing up or manipulation. You’re not trying to inflate egos. You’re helping the people you work for succeed, which in turn helps you succeed. This section of the guide is about creating win-win relationships with higher-ups. You’ll learn how to present problems and opportunities to them, give them feedback, connect with your boss’s boss without doing an end run, and deal with a variety of difficult managers—from the micromanager to the conflict-averse.

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Managing Your Boss by Linda A. Hill and Kent Lineback

Managing up is important because your boss plays a pivotal role in your success—or your failure. You can leverage your boss’s influence in the organization on your behalf in several ways—for example, by obtaining valuable information, winning needed resources, and securing important support for your personal development and career. When you face difficult trade-offs and must make decisions that create both beneficial and painful consequences for others, your boss’s advice, insight, knowledge of the organization, and access to higher management can be invaluable. As your organization shifts and changes shape in an uncertain market, a good relationship here

Adapted from Being the Boss: The 3 Imperatives for Becoming a Great Leader (product #12285), by Linda A. Hill and Kent Lineback, Harvard Business Review Press, 2011

3

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Managing Up

becomes a necessity for navigating through the turmoil. The penalties of a poor relationship are many: less influence, little information or advice, fewer resources, and limited personal development and career support. Worst case, you can find yourself isolated, ignored, pushed out—your journey stalled, your career derailed.

Why Is It Often an Uneasy Relationship? This relationship can be problematic for two reasons. First, a boss plays conflicting roles: supporter and evaluator, which can create confusion. Second, people often bring their past experience with authority into the relationship, which can create unnecessary complications. This is an area where being a star as an individual contributor may not have prepared you for management. As an exceptional performer, you probably had minimal interaction with your boss. If so, you most likely didn’t develop the skills of managing up that you need.

Do you see your boss as coach and developer or as evaluator and judge? You’re caught in a difficult dilemma, one that can feel personally threatening. The boss is not only a potential source of great help, in both your job and your career, but also the one who evaluates your performance. To get help from her as a developer, particularly with your personal development, you must reveal your shortcomings. But if you do, she in her role as evaluator may interpret your weaknesses as serious faults. Many managers handle this dilemma by striving to appear capable and in control

4

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Managing Your Boss

even when they’re not. They see their boss more as threat than ally and lose the potential benefits of her help. Are you confused by your boss’s dual role? Do you tend to see your boss as primarily a judge? Does that attitude seem safer to you? That’s understandable, but it’s not always the most helpful point of view. What can you do? Don’t presume your boss is always one or the other, judge or coach. Instead, think of his dual roles as extremes between which he moves back and forth depending on the situation. At first, in small ways that aren’t risky, test his willingness to provide support. That way, you can see when, where, and how he’s likely to focus on development rather than evaluation. Learn his feelings about what’s important in management—such as careful planning, decisiveness, building consensus— and make sure you develop and display those qualities.

Do you see past bosses in your current boss? How do you feel about your current boss? How do you respond to authority in general and to those who have it? If most of your bosses have frustrated you and fallen short of your expectations, you and they may be victims of the emotional baggage you carry forward from past experience. Reflect on your own history and the feelings it’s created in you. That history may lead you to perceive your current boss not as who she is but as an amalgam of past authority figures, with all the positive and negative feelings that flow from that past. Unless you’re aware of these feelings, you’ll be at their mercy. On the other hand, you may respond to authority with overdependence, rather than resistance. Extreme

5

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Managing Up

WHAT YOUR BOSS EXPECTS OF YOU You and your boss agree on your annual, individual performance targets that support larger organizational goals. But what about her undocumented expectations? What should you be doing beyond your formal job description that will make you indispensable to your boss and your organization as a whole? • Collaborate. Overcome differences between you and others so you work together effectively—even if you don’t like each other. • Lead initiatives. Don’t be reluctant to associate yourself with unproven ideas, especially those that cross functional or unit boundaries. Raise your hand, and you’ll climb the ladder faster than those who don’t. • Develop your own people. Take as active an interest in your employees’ development as you do in your own—if not more. Go out of your way to criticize and praise your people when they need it. And during performance reviews, supply people with specific, candid, and useful feedback.

6

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• Stay current. Regularly read and watch the news. What happens in the world affects what happens with your team, your marketplace, and your competition. Also know what’s going on with your customers—how they’re changing, how their competition is changing, and how technology and world events are affecting their strategies. Your customer relationships are key assets: Bring them to the table. • Drive your own growth. Seek perpetual education and development—not necessarily by going to school but by finding exposure to new people and ideas. Seek feedback from your boss, and accept demanding assignments. • Be a player for all seasons. Demonstrate positive behaviors even during hard times. You’ll sustain your ability to motivate and inspire your own people no matter what’s going on around you. Adapted from “What Your Leader Expects of You” (product #R0704C) by Larry Bossidy, Harvard Business Review, April, 2007

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deference and automatic, unquestioning compliance don’t work well either. Those who react this way never disagree or push back, even when they’re right or it’s in their best interest. Both antagonism to authority and too much deference will keep you from seeing your boss clearly and realistically and prevent you from securing the work and personal benefits available from a good relationship.

What Should Your Relationship with Your Boss Be? Do you realize that your relationship is actually one of mutual dependence? Your boss depends on you and needs your commitment and support to succeed. Just as you may wrestle with your reliance on your people, he probably struggles with his dependence on you and his other direct reports. Think of the relationship as a partnership in which the partners depend on each other to succeed and are able to influence each other in ways that improve the performance of each. It’s not a relationship of equals, certainly, but it’s not entirely one-way either. You usually do have some room to negotiate and create the relationship that works for both of you.

Take Stock of Your Current Relationship Is your current relationship a partnership? Are you and your boss able to have a normal, constructive discussion about work? If not, why not?

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Don’t assume you can make significant differences in how your boss thinks or operates. Most likely, the best you can do is nudge her in directions that work better for you. That’s certainly worth doing. But you’re unlikely to create large changes. With that in mind, use the following questions to assess and improve your relationship. They focus on actions you can take.

Are you meeting expectations? By far, the key factor in a good relationship is your ability to perform as expected.

Results. Performance targets create the foundation for your ongoing relationship. Unless you and your group produce the results expected, you’re unlikely to enjoy much of a partnership. And it’s not just the results you attain but how you attain them. If you hit your numbers but your boss hears complaints all day about how you railroad other groups, he probably won’t consider you someone who “meets expectations.”

Information. But results aren’t the only expectation. Do you keep your boss informed? Reach explicit agreement about how often and in what way you will report progress. Develop a sense of what your boss wants to know. Some prefer to know a great deal; others, much less. In general, no boss likes to be surprised or seem ignorant of something she should know. If you must err, do it on the side of overinforming. Many bosses actually want more information than they say, so discover the right balance through experience. Find out

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as well how your boss wants information delivered: written reports via e-mail, in person if that’s possible, or by video call.

Support and loyalty. Your goal is to make the relationship work for both of you, and that requires some degree of support and loyalty. Just as you want your boss to care about you, and your people want you to care about them, your boss wants your care and concern, too. Be generous and assume the best intentions, even when you disagree. Express disagreement as your opinion offered in support of your boss’s success. Some people bridle at the word loyalty. We don’t mean blind loyalty, but loyal people earn the right to question and disagree on occasion. Those who speak up only when they disagree will usually enjoy less influence than those who have demonstrated prior support. So on those occasions when you do honestly agree with your boss, say so clearly and explicitly. You cannot succeed in this relationship at the expense of your boss; you will rise or fall together. Your task is to make both of you effective. Help your boss build on her strengths, and overcome or bypass her limitations.

Does your boss trust you? The foundation of all network relationships is trust, and the relationship with your boss is no different. Can he count on you to do the right thing? If you feel micromanaged, the reason may be that you’ve neglected to establish real trust. The essence of building trust is to negotiate what you both mean by “do the right thing.”

Do you both see the current situation the same way? Make sure you share a common understanding of the

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challenges your group faces and what needs to be done. If you see the need for fundamental change and your boss wants to stay the course, you must resolve this difference right away.

Do you agree about where you and your group are going? Once again, a plan is critical. Do you have one? Have you reviewed it with your boss? Does it make clear what’s to be done and when? Make sure your boss knows your goals and plans and agrees with them. Ideally, she had a hand in creating them.

Do you negotiate expectations when you’re given an assignment? Don’t let your relationship be one in which you simply accept whatever is passed down without discussion. If the expectations are unrealistic, you will have no one to blame but yourself when your team fails. Reach agreement on the results you’re expected to produce— what will happen by when. Do this at the beginning, and update expectations periodically. Warn your boss of potential risks, and play out various scenarios of how you might handle them.

Do you see and understand your boss as a person? It’s easy to forget that beneath your boss’s mantle of authority there’s a person just like you. He has hopes, aspirations, frustrations, strengths, weaknesses, and fears. He’s the product of his background, training, and experience. He has a personal life—a family and family history, religious beliefs, social organizations, political views, and hobbies. Do you know enough that you’re able to see the world through his eyes?

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Do you understand your boss as a manager? Your boss has goals, plans, and pressures, as well as managerial strengths and weaknesses, preferences, and foibles. Do you know them? What’s your boss on the line for? What’s her boss telling her to do? Do you know how your boss prefers to make decisions, and do you work within that pattern? Does he prefer lots of analysis and data? Does he need time to reach a conclusion? Does he want everyone’s opinion before deciding? If you must depart from these preferences, do you first negotiate explicitly what you will do? Do you know and respect the ways your boss prefers to work? Some bosses want written analyses before a discussion, while others prefer the discussion or presentation first, followed by a written summary. Some want lots of data; others want the highlights. Some want to be intimately involved in every detail; others prefer regular reports but nothing more unless there’s a problem. When you approach your boss, do you expect guidance or answers? We know a manager whose boss always responded to questions with questions of her own. Finally, this manager realized: “I had to come in with some ideas about how I would handle the situation, and then she would talk about them with me. She would spend all the time in the world with me.” Do you present a problem and expect your boss to solve it? Many bosses resist that approach. Instead, try going in with a problem, an analysis, alternatives, and a recommendation he can react to.

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Can you identify your boss’s strengths? This stumps many managers we know. They focus on their boss’s weaknesses and can talk at length about them— and often do with their peers. But they seldom look for strengths. That’s a shame because your boss’s strengths are what you must leverage, and you cannot leverage what you don’t recognize or appreciate. Whatever your boss’s weaknesses, identify what she does well. There must be something. Don’t fall back on something like “She knows how to play the organizational game.” There’s something there. What is it, and how can you use it to learn and do your work more effectively?

Are you clear about what you need and expect? Negotiate what you need from your boss. Don’t make him guess. What can he do to help you? Provide resources, support from other groups, relief from distracting responsibilities, clearer direction? In addition, think about the way you prefer to work and what you need from a superior, such as specific goals, help and ongoing guidance, or a certain degree of autonomy. Be sure you know where the boundaries are. Test how negotiable they are. Where your needs and your boss’s way of managing diverge, talk through the differences. Where differences involve high stakes, talk sooner than later. It’s easy to underestimate the risks of conflict avoidance and the cost of the passive aggression that often accompanies it. Your nonverbal communications— expression, manner, body language, tone—often reveal

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CHECKLIST FOR MANAGING YOUR BOSS Make sure you understand your boss and his or her context, including: □ Goals and objectives □ Pressures □ Strengths, weaknesses, blind spots □ Preferred work style Assess yourself and your needs, including: □ Strengths and weaknesses □ Personal style □ Predisposition toward dependence on authority figures Develop and maintain a relationship that: □ Fits both your needs and styles □ Is characterized by mutual expectations □ Keeps your boss informed □ Is based on dependability and honesty □ Selectively uses your boss’s time and resources Adapted from “Managing Your Boss” (product #R0501J) by John J. Gabarro and John P. Kotter, Harvard Business Review, January 2005 (republished from 1980)

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your true feelings about your boss and can slowly corrode this critical relationship.

Have you discussed with your boss your own growth, development, and aspirations? How can your boss help you grow and develop? She’s not responsible for your career and personal development, but it’s in her best interest for you to improve in ways that will help you (and her) succeed. From your boss you can get advice and guidance; feedback about your performance, strengths, and weaknesses; insight into what others think of you; developmental assignments; and access to training programs and other learning opportunities. To obtain these, you must first communicate your desire to learn. Then, you must agree about how and where you want to grow—what competencies you need to develop, such as building a network, making a plan, managing performance, or assessing subordinates. Have reasonable expectations. Take responsibility for your own development. Besides, your boss probably has no more time and no less pressure than you, and many bosses, unfortunately, are uncomfortable in this role. The more specific the requests you make, the better—to attend a training course, for example, or advice about a specific problem.

Do you and your boss come from different cultures? Be aware that cultures differ in their expectations and treatment of people with authority. In some, the boss is expected to be participative; in others, directive. In some, proactive and assertive; in others, humble and modest.

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Compare the characteristics of both your cultures. Where your assumptions and expectations differ, be prepared to talk about them explicitly.

Work hard to build a productive relationship with your boss. Initiate the kinds of discussions we’ve suggested. It’s difficult to succeed without his support, and impossible in the face of his opposition. Always remember that your reports face these same issues with you. Let your experience in each relationship—with your boss and with your people—guide you in the other. Don’t make the mistake, as many managers do, of ignoring such a potentially powerful source of help and support. Take responsibility for, and play an active role in, making it a partnership that benefits both of you. Avoid seeing yourself as a passive, powerless subordinate. Don’t assume it cannot be a positive, mutually helpful relationship until you’ve tested the possibilities on several occasions. It’s too important—to your ability to exercise influence and thus to your journey—to merely let it be whatever it will be.

Linda A. Hill is the Wallace Brett Donham Professor of Business Administration and faculty chair of the Leadership Initiative at Harvard Business School. Now a writer and executive coach, Kent Lineback spent many years as a manager and an executive in business and government. They are the coauthors of Being the Boss: The 3 Imperatives for Becoming a Great Leader (Harvard Business Review Press, 2011). 16

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Winning Over Your New Boss by Lew McCreary

Getting a new boss can be fraught with anxiety and risk, often making it hard to see the opportunities fresh leadership will bring to you and your organization. You’ll have to come to terms with whatever unpredictable changes she unleashes. Don’t expect the new regime to resemble the old one. Leaders are often brought in to shake up the status quo, so you’ll want to make it clear right away that you’re a valuable contributor. If you get a new boss by joining another organization, you’ll have no immediate worries about job security. But you will need to figure out the culture (and its politics), meet with and impress new colleagues and direct reports, and above all create a successful partnership with your new boss. You’ll need to understand—quickly and in detail—exactly what you’ve been brought aboard to do, what key stakeholders you’ll need to please, what

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resources you can command, and how your performance in the job will be measured. In either new-boss scenario, uncertainties abound— but you have a role to play in taming them. As Tom Gilmore, a principal at the Center for Applied Research (CFAR), points out, you’re just as responsible as your new boss for “the quality of the working alliance.” What does that responsibility involve? Establishing yourself as someone the new boss can turn to for candid opinions, insight, and support—someone she can count on to perform. Here are some tips for doing that.

Prepare to Meet the New Boss Because your first meeting with your new boss feels like a make-or-break encounter—especially if she’s the one who’s new to the company and presumably looking for things to change—you may be tempted to lead with your personal agenda. If you do, you’ll be part of a steady parade of petitioners, each bearing (as the leader sees it) a narrow set of demands. Don’t arrive at that initial meeting with thick stacks of documents and a PowerPoint presentation. And don’t prepare an eager audition that recapitulates your LinkedIn recommendations. Instead, ask questions and listen to the answers. Find out who the new boss is, how she likes to work, what she doesn’t yet know that you can help her learn. Answer her questions candidly as well, and don’t be so tightly clenched that you fail to let the boss see who you are. Gilmore, drawing on his experience and research at CFAR, offers the following advice for making crucial early encounters successful:

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• Ease into the relationship. Think incrementally. Pick only a few vital issues to cover early on— ones that will help you lay the groundwork for an effective alliance with your new boss. For instance, initially brief her on your unit’s new open-innovation initiatives. Over time, you can discuss in more depth the projects that have been green-lighted so far. • Observe her style. Does your new boss prefer short or long conversations? A buffet of options or one best recommendation? Hard data or soft? Use these indicators to shape the way you present yourself and your ideas. • Consider others’ claims on her attention. It may be just the two of you sitting in her office, but you’re not the only one who wants something from her. Take account of how other key stakeholders might affect her agenda, and highlight how your issues fit into those overall priorities. • Collaborate. Help her form opinions on issues of importance to you, her, and the group. Avoid simply seeking her judgment on your ideas. If, for example, you believe the group has grown too risk-averse, begin a broader discussion about risk. Share anecdotes about how the group has dealt with it in the past, and ask about her experiences and ideas. • Be honest. Most leaders understand the difficulty of speaking truth to power, and yet they must

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depend at first on relative strangers for honest appraisals. Look for openings to provide helpful candor on some key aspect of the new boss’s agenda. Say your boss wants to launch an initiative that would require buy-in from two unit heads who don’t work well together. Diplomatically bring that dynamic to her attention and share stories of how others have been able to get the two to cooperate. • Accommodate her preferences. Your new boss has inherited systems and processes tailored to her predecessor’s quirks. The more you can learn about how she would like to be supported, the faster you can help develop new systems that work for her. For example, if her style is to delegate, suggest a regular weekly meeting to review assignments and workloads. Let her know what sorts of tasks you’re best suited to take on and keep her apprised of your bandwidth. Establish a sense of connection, says Gilmore, by “finding links between what you’d like to see happen and things the new boss wants to accomplish.” There will be time for your agenda after you’ve built a solid relationship.

Be Yourself and Be Transparent J. Bruce Harreld, who now teaches at Harvard Business School, has both been a new boss and reported to one many times—at IBM, Boston Chicken, Kraft General Foods, and elsewhere. Whether you’re getting a new boss at your current company or joining a different one, Harreld says, “The

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best advice I can give . . . is just to be yourself and be transparent. The more I think about ‘What should I say to the boss?’ the more he and I are both in trouble. I’m there for a reason—for my best opinion. And he’s there for a reason, which is to guide me and help me learn, and shape what my work agenda should be. And the more I posture to him, the less effective I am.” In effect, it lowers the value of the relationship. Candor goes hand in glove with confidentiality. Don’t share your boss’s comments with others unless he’s asked you to. And beware of carrying tales of your peers back to him. “A lot of people view their boss as someone they have to tell everything to,” says Harreld. “You have to be careful with that. In a complex organization, if you view the CEO as the kingmaker, you’re putting yourself at risk. If I wear my power with my boss on my sleeve, and people know I run back to him often, I’ve just cut out all these other relationships and made myself totally ineffective.” When Harreld worked for Lou Gerstner at IBM in the mid-1990s, they didn’t always agree, but they never pulled their punches: “That’s part of the process, part of being on a team. You make your recommendation as forcefully as you can. And once the decision is made, you have to snap around and say, ‘OK, here we go.’ And sometimes people can’t [make that pivot]—they get strident. And sometimes they have to leave the team.” That’s worth remembering. The agenda for change may stretch farther than you and others are willing to go. Many new leaders have transformational marching orders. Your job in the course of a leadership transition is to see how compatible the new boss’s plans are with

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your own agenda and career goals. If they’re at odds, you might have some thinking to do. And, of course, that thinking cuts both ways: If you’re on the edge of disillusionment, a new boss can be a breath of fresh air, helping to rekindle your enthusiasm and optimism.

Help Your New Boss Get Up to Speed If she’s new to the organization, your boss has a lot of catching up to do. You can make it easier by: • Saving her some time. Be generous with what and whom you know. Help your boss identify colleagues whose expertise will help her meet her goals. • Saving her some trouble. Share shortcuts through the administrative mazes that drive every newbie crazy. This may seem like a small thing, but it’s not. Let her know that Phil in the IT user-services group is the only person to call when her technology goes on the fritz. Or that Maureen in Finance has developed an idiot-proof Excel template for expense reports. • Saving her some work. Being new is a job unto itself. There may be something on the boss’s plate that you can take on or at least help with. If you see an opportunity, step up. Suppose your boss has been asked to honor her predecessor’s speaking commitment at an industry conference, and it’s clear she’s not happy about going. Since you know your way around the presentation material, volunteer to fill in.

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Listen for Clues to the Future In town-hall get-acquainted sessions, new bosses often default to being politic and careful. Sometimes, however, telling comments slip out. File these away as possible clues to the mysterious future. Some of them will doubtless be worth probing later when you have one-on-one meetings with the boss. Also bear in mind that you may end up with a new boss who isn’t right for the business. Pay close attention to what she says (and how she says it). You may be able to spot trouble brewing early on. A former colleague and I, in our first joint meeting with a new boss, were surprised to hear him say, contentedly, that he really had “nothing to prove.” Since just about everyone in the company was energetically focused on proving something, the comment seemed discordant. In less than a year, the new boss and the company parted ways.

Remember That the Stakes Are High Reuben Slone has weathered—and learned from—numerous new-boss transitions in his career. He recently left OfficeMax, where he was an executive VP leading the supply-chain organization, for a comparable position at Walgreens. While at OfficeMax, he had five bosses in eight years. Each time he’s had to adapt to a new boss, Slone has reread the Harvard Business Review article “Surviving Your New CEO” (May 2007). He dusted it off again as he prepared for his new assignment at Walgreens, where his challenge is to take an increasingly complicated supply

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chain—with a growing set of channels, customers, and offerings—to the next level of sophistication. Slone values the article’s tips on how to build a strong relationship with your new leader, whether it’s you or your boss who’s joining the organization. But he also rereads it for a reality check: It includes sobering research on the jeopardy executives face when a new boss takes over. In some cases, turnover among top executives is 33%—nearly double the normal rate. So every opportunity to make an impression matters tremendously. Slone’s advice? “Make sure the boss knows he can count on you, what he can count on you for, and that you’re there to help make the transition as easy as possible. Be explicit about that. And get in early—don’t wait for him to come to you.”

Lew McCreary is an editorial consultant and a contributing editor to HBR. Working as a consultant means he gets new bosses regularly. He has learned that the most valuable attribute is to be flexible—up to a point.

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Steps for Presenting Problems or Opportunities to Your Boss Did your project come in $10,000 over budget? A rival poach your star performer? Your competitor beat you to market with a new product? None of us likes to deliver a difficult message, but it can be a valuable tool for building a trusting relationship with your boss. You know that you should never bring a problem to your boss without a proposed solution. But often we forget to frame the situation in a way that helps us garner the necessary resources or approval to begin moving toward a solution.

Adapted from Managing Up (product #14784) from the Pocket Mentor series, Harvard Business Review Press, 2008

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Here are five steps to take the next time you need to deliver bad news—or a promising opportunity.

1. Describe the problem or opportunity to your boss. Provide a general overview of the problem, and show the specific impact it has on your work and the company’s goals. If you’ve identified an opportunity, show the potential benefits—not just to you or your team, but to the larger organization. “Stu, we’ve got a morale problem on our tech team. Our recent employee survey shows that 40% of our staff in Atlanta doesn’t find their work rewarding or challenging. If we don’t address this, we might lose some of our best talent. We can’t afford that at any time, but especially now when we’re trying to release the new system by Q1. I have a few ideas I’d like to try, with your help and the cooperation of HR. I think with the right approach we can keep the team focused on meeting the Q1 goal.” 2. Identify your solution or approach. Explain how you’ve already tried to solve the problem and what you’ve learned from those attempts. Recommend a specific approach, along with alternatives, to provide your manager with options. Clearly define each possible option, addressing the pros and cons, and any potential risks or barriers. Explain the logic behind your recommended approach. You want your man26

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ager to be aware that you’ve considered several possible outcomes. “It looks like we’d need to add two more managers to the project to meet the client’s latest round of requests. When I mentioned this to Sarah during our conference call, she didn’t respond. I’d like to go to Cincinnati and meet with her to discuss how we might renegotiate the contract. I think seeing her face-to-face will make a big difference. Plus if I do it the week after next, we’ll have just delivered on the second phase of the project and she’s likely to be pleased. We could of course take the hard line and just say no to their requests and then see what they come back with. But I’m afraid we’d be putting our future relationship at risk. We could also just expand the team and do the work and see it as a marketing investment. We’d likely win Sarah’s good graces and, as you know, she’s well connected with many companies in our target group. But it may be more financial risk than we’re willing to take on right now.” 3. Explain the implications. Consider the impact that your proposed solution will have on yourself and others, including your manager. Be explicit about how your idea will have far-reaching effects on the goals of the organization. “If we put a formal process in place to track all sales leads, I can do a better job of 27

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connecting the dots between the VPs who are meeting with potential customers. As you know, the current approach worked well when we just had two VPs doing the calls, but now we have over 20. This will increase their workload slightly, but it will be clearer to them how to share lead information. It will also give senior leadership a better view into the pipeline. It won’t take a week to pull together our sales dev reports, which means you can be more responsive to requests from above.” 4. Discuss the benefits. Focus your conversation on concrete examples of your idea’s benefits. The specific features of the solution, or how it will be implemented, are less important at this stage. If you have tested your approach on a small scale with good results, share that information. “Delivering the product in a smaller container in the Latin American market will expand our customer base. We’ll be able to serve truckers with small rigs who go on long hauls but don’t have room for the 20-gallon containers. Most of these truckers haven’t bought our products before, so we have the opportunity to convert them to our brand. They’ll also be able to pay cash, since the smaller container will be at a lower price point. This is a real advantage in their cash-heavy economy. Carlos helped me run a quick experiment with a small set

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of truckers in Panama, and the response was overwhelmingly positive.” 5. Accept responsibility for the outcome. Demonstrate your commitment to ensuring success. Work with your manager to develop a final action plan for taking advantage of the opportunity you’ve presented. “This rests squarely on my shoulders. In the unlikely event that we don’t convert enough customers from this campaign, I’ll quickly move on to Plan B. But to get started I’m going to reach out to Terry to get the e-mail list of current customers who have opted-in. Then I’ll work with Ellen to draft the e-mail pitch. Once I’ve done that, I’d like to get your help running it up the flagpole. Does that sound like a sensible plan to you?”

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Manage Up with Your Mentor’s Guidance by Jeanne C. Meister

Your mentors can help you build better relationships with your boss and colleagues. How? Jeanne Meister, an expert in workplace learning and development, recently shared her ideas in an IdeaCast interview with Susan Francis from HBR. Here are some highlights.

What kind of support can mentors offer as you’re trying to manage up? Mentors can help you navigate your company’s political landscape and introduce you to key people so you can branch out. And they’ll get you thinking like a senior executive long before you’re anointed as a member of the upper ranks—which will prepare you for that metamorphosis. One of my first mentors

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shared this valuable advice with me: Know who the thought leaders are across the organization, get to know them personally, and show them how your ideas can further their business agendas. Mentors can also help you communicate your ideas to senior executives, who juggle myriad demands and don’t have time to wade through a sea of PowerPoint slides. If you want to present a complex idea to a group like this, take a first pass at boiling it down to a one-page memo that focuses on business outcomes. Then turn to one of your mentors for input: Have you crafted a message that will get executives’ attention—one that clearly and succinctly shows how your idea will affect the bottom line? What details should you trim? Where do you need to add data for support?

How can mentors help you work more effectively with your boss? They can provide insight into the high-level challenges your boss faces and suggest realistic ways of supporting his goals. Ask your boss to clarify his top priorities with you—and write up a one- or two-page summary of that conversation to share with a trusted mentor. Then think with your mentor about how you can contribute. Maybe you can volunteer to assemble sales data your boss will need for his big presentation to the executive board, for example, or tap your network to gather anecdotal feedback on a product idea he’s considering.

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Also try asking a mentor for help processing and incorporating feedback from your boss. Suppose you’ve been told you need to speak up more in large staff meetings, but you’re shy. You and a mentor can practice graceful ways of jumping into the conversation or brainstorm other things you can do to show you’re engaged.

Part of managing up is figuring out which organizational battles to fight and how to fight them. What can mentors do to make this easier? They can help you develop your personal brand— which will make it clearer which battles you should take on. For instance, if you want to be known at your company for your creative product ideas, a mentor can broker opportunities for you to present them. She’ll also help you develop a better sense of when to go to the mat over them. For example, you and your mentor may decide it’s worth fighting to protect your vision for a new product’s positioning, but not to control the timing of its introduction.

Making sure your mentor gets value out of working with you is obviously good practice for managing up. Any suggestions on how? This is almost the same as understanding your boss’s priorities. When you know what’s important to her, you can find ways to work toward her objectives. Simple gestures go a long way—for instance, putting

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her top three subjects of interest in your Google alerts and passing along links you think she’ll like. Look at her Twitter feed for insights into what she cares about: What kinds of conversations is she having— and how can you participate? Ask your mentor about her personal goals and see how you can help her achieve them. Suppose she’s writing an article on pricing strategy for a marketing journal. Offer to read the manuscript and provide feedback from an execution perspective. If you find ways to give as well as receive, your mentor will take note—and become all the more invested in your development.

Jeanne C. Meister is a partner at Future Workplace, which helps organizations redefine their corporate learning and talent management strategies. She is a coauthor, with Karie Willyerd, of The 2020 Workplace: How Innovative Companies Attract, Develop, and Keep Tomorrow’s Employees Today (HarperBusiness, 2010).

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Change the Way You Persuade A summary of the full-length HBR article by Gary A. Williams and Robert B. Miller, highlighting key ideas.

THE IDEA IN BRIEF Your proposal was brilliant; your logic, unassailable; your argument, impassioned. So why didn’t your boss buy it? Perhaps you took a one-size-fits-all approach to persuasion. But different people use different styles when deciding to accept an idea: Each wants certain kinds of information, at specific steps in the process. There are five common but distinct decision-making styles: charismatic, thinker, skeptic, follower, and controller. One decision-making style isn’t better than another. But to tip the outcome your way, understand your listener’s preferences—then tailor your persuasive efforts accordingly. Reprint #R0205D

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• • • •

• Challenges every data point • Decides based on gut feelings

Thinker

Skeptic

Toughest to persuade Cerebral, logical Risk-averse Needs extensive detail

• Easily enthralled, but bases decisions on balanced information • Emphasizes bottom-line results

Decision-Maker’s Characteristics

Charismatic

Style

THE IDEA IN PRACTICE

• Larry Ellison • Tom Siebel

• Michael Dell • Bill Gates

• Lee Iacocca • Herb Kelleher

Prominent Examples

• Establish credibility ahead of time with your expertise; draw on positive previous work experiences • Get endorsements from someone your boss trusts

• Present market research, customer surveys, case studies, cost/benefit analyses • Help your boss understand all perspectives of a given situation

• Focus on results • Make straightforward arguments • Stress proposal’s benefits with visual aids

Persuader’s Strategy

• Copresent with a trusted colleague • Emphasize the credibility of your sources of information • Stroke your boss’s ego (“You’ve probably seen this case study…”) • Ground your argument in the real world

• Present different options in detail in a face-toface meeting • Explain your data-gathering methods • Present case studies of similar initiatives • Use a follow-up meeting to fill argument gaps and recommend optimum plan • Wait weeks, months for your boss’s decision

• Diagram your current organization and the problem(s), proposed solution(s), and benefits—especially improved competitiveness • Explain potential challenges and risk of inaction • Provide detailed reports for your boss to review postpresentation

Examples of How to Approach Them

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• Relies on own or others’ past decisions to make current choices • Late adopter

• Unemotional, analytical • Abhors uncertainty • Implements only own ideas

Follower

Controller

• Martha Stewart • Ross Perot

• Carly Fiorina • Peter Coors

• Present highly structured arguments • Make your boss “own” the data • Avoid aggressive advocacy

• Use testimonials to prove low risk • Present innovative, yet proven, solutions

• Over several months, send your boss customer reports, marketing studies, financial projections; give him everything he needs to build your case for you • Emphasize data highlighting the company’s challenge • Identify data contradictions, but let your boss analyze them • Wait for your boss to request a meeting after a significant incident (e.g., a large customer defects)

• Highlight case studies from other industries, but note “We could be the first in our industry to do this.” • Omit failed real-world examples (although you should have this information available should your boss request it) • Present multiple options • Tap your network for references to steer your boss toward your preferred choice; emphasize the option’s affordability, etc.

Managing Up

Gary A. Williams is the CEO of Miller-Williams Incorporated, a San Diego–based customer research firm. He can be reached at [email protected]. Robert B. Miller is the chairman of Miller-Williams Incorporated. He is the coauthor of several business books, including Strategic Selling. He can be reached at [email protected].

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Get to Know Your Boss’s Boss by Priscilla Claman

Does your boss’s boss know you well? Is she impressed with you? Does she know exactly what you do? If you can’t answer these questions with a “yes,” you’re missing out on career opportunities. Here’s a person with a broad perspective on your organization, someone who can see what’s coming down the pike—whether it’s a new product or a reorg—more clearly than you or your boss can. Forming a relationship with her will help you develop a 30,000-foot view, too. But it’s more than that. She has a direct say in your growth and advancement. She approves your performance reviews, raises, promotions, and major changes in duties. She also signs off on any professional development you might be offered, such as stretch assignments or formal training.

Adapted from content posted on hbr.org on November 17, 2011

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To succeed in your organization, you need her to know your skills and have an idea of what your career plans are. Yes, your own boss is supposed to advocate for you, but he still has to get the approval of his boss. When you and others are competing for a promotion, it will go to someone your boss’s boss thinks highly of. But how do you get to know her? How do you earn her attention and respect? Here are some suggestions: • Interact with her. It sounds basic, but smile and say “hello” when you see her. Some people duck and run when a powerful person comes into their work area. Instead, ask how you can help her. Reintroduce yourself if you see she doesn’t remember you. Treat her like the very important customer she is. • Reach out to her. Touch base when opportunities arise. If she gets a promotion or award, send her a congratulatory e-mail. If you find an article or book that’s relevant to her interests, send her a link and ask whether she’s heard about it. • Tap her for advice. E-mail her to ask for input on courses you’re thinking of taking, professional organizations you’re considering joining, and more. First make sure it’s OK with your boss, though, and use his name in your message so it’s clear you’re not bypassing the chain of command. Suppose your boss has asked you to research some new vendors, and you know his boss has several strong candidates in her extensive network. Send her your

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list of finalists to see if she has any experience with them or knows of other good options. And when you do this, make your boss look good. Preface your question with, “John thought you might have some helpful insights for us . . .” Follow up on her suggestions and thank her for them when you write to let her know which vendor you’ve chosen and why. • Extend an invitation. Do you have an interesting guest coming in for a meeting? Are you giving a presentation? Is your manager leading a training session? Ask your boss if you should invite his boss. Whether she comes or not, it’s another chance to let them both know that you’re thinking of the big picture. • Pass along praise. Forward complimentary e-mails from colleagues or customers to your boss. He’ll most likely send them on to his boss, since your success reflects well on him, too. Customer compliments are highly regarded, whether the customers are internal or external. • Volunteer for a cross-functional team. Leading or joining a cross-functional team is a great way to contribute to the larger organization. So is offering to take notes at meetings and circulate them afterward. Most people see this as drudgery, but it’s an opportunity to raise your visibility. Ask team members if they’d like you to copy their managers, and see if your boss would like you to copy his

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boss. If they say yes, your notes—and your name— will be noticed by the senior team, including your boss’s boss. • Fix a problem. If you find a way to make an improvement that furthers a business objective or supports a corporate value, act on it—and share the results with your boss’s boss. Here’s an example: An administrative assistant at a global nonprofit found her organization’s customertracking system inaccurate and hard to use. When she discovered that many colleagues felt the same way, she researched other systems. Some friends in accounting pulled together a cost/benefit analysis for her so she could develop a proposal for switching to a new system, which she presented to her boss and her boss’s boss. She not only got funding for the project, she also earned a new leadership role: overseeing the conversion and managing the new system. Try these tips, and your boss’s boss will know—and care—who you are.

Priscilla Claman is president of Career Strategies, a Boston-based firm offering career coaching to individuals and competency development and career management services to organizations.

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How to Make Your Boss Look Good— Without Becoming a Sycophant by Michael Schrage

I find suck-ups loathsome. But I admire the managingup technique I’ve seen ambitious people skillfully deploy. No fawning or flattery—they make smart use of technology to make their bosses look good. For example, the boss’s boss at one marketing firm had given a keynote speech at a major industry event. A twentysomething analyst easily found a couple of complimentary tweets referencing the talk. He e-mailed them to his fortysomething boss, who barely knew what Twitter was, but who was thrilled to bring them to his Adapted from content posted on hbr.org on April 15, 2010

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boss’s attention. Win. Win. Win. Everyone was happy. A simple 90-second investment made his boss look good. At another firm, a project manager found that her boss’s boss had an offbeat sense of humor and liked injecting levity into boring project reviews. She made it her mission to find the appropriate New Yorker or Dilbert cartoon to paste into a PowerPoint slide for presentations. Of course, she didn’t do this for her own presentations; she selected amusing and relevant options for her boss’s talk. He was grateful, and the boss’s boss liked them. What I like about making your boss look good is that it is the mirror image of the marketing mantra about knowing the customer’s customer. Understanding your boss is vital. But researching, knowing, and appreciating your boss’s boss ought to give you valuable insight into what makes your boss effective—and frustrated. That shapes how to better position your boss in the mind of his boss.

Your Boss as a Brand If you saw your boss as a brand, how would you sell that brand to the ultimate customer—your boss’s boss? Answering this question well requires market research. What can you do that will move your project forward and make your boss look good to his boss and peers, too? It can be a worthwhile investment of your time to consider what tools and technologies may help you. The economic and technological “barriers of entry” to figuring out appropriate approaches to making your boss look good have collapsed. Most managers are but a LinkedIn connection or a blog comment away from insights into their boss’s boss that makes a win-win-win

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outcome a good bet. Should this occur daily? Only if you’re comfortable being the teacher’s pet. But there’s nothing wrong with making your boss look good be a part of your brand. Perhaps you think it would test the outer limits of your creativity and authenticity to make your boss look good. But give it a try. Think of it as a marketing challenge: What are the two things you could do in the next three days that would make your boss look better to his boss?

Michael Schrage, a research fellow at MIT Sloan School’s Center for Digital Business, is the author of Serious Play (Harvard Business School Press, 1999) and the forthcoming Getting Beyond Ideas.

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Stop Being Micromanaged by Amy Gallo

None of us likes a boss who constantly scrutinizes our work. Micromanagers are not only annoying, their lack of faith may make you doubt yourself and stunt your professional growth. But you don’t have to suffer with an overly controlling boss. If you reduce your micromanager’s stress, you may be able to secure the autonomy you need.

What the Experts Say Micromanagement can make you feel inept, but typically it has nothing to do with your performance. “It’s more about your boss’s level of internal anxiety and need to control situations than anything about you,” says Jenny Chatman, a professor of management at Haas School of Business at UC Berkeley. Adapted from content posted on hbr.org on September 22, 2011

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You can’t change the way your boss leads, but you can change the way you follow using these tactics:

Evaluate Your Boss’s Behavior Jean-François Manzoni, coauthor of The Set-Up-to-Fail Syndrome: How Good Managers Cause Great People to Fail, cautions that all controlling bosses are not the same. On one end of the spectrum are managers with very high standards. They may regularly have you rework something that doesn’t measure up. They pay a great deal of attention to detail and exercise some degree of control, but they don’t stifle you. In fact, you may learn a lot from them. At the other end of the spectrum are people Manzoni describes as “pathological micromanagers who need to make it clear to themselves and others that they are in charge.” These are the bosses who give you little to no independence, insist on being involved in every detail of your work, and are more concerned about specifics, such as font size, than the big picture. “You know you’re working with [a pathological micromanager] if he gets involved in a level of detail that is way below his pay grade,” says Chatman.

Don’t Fight It Railing against micromanagement isn’t productive. “If you push back in one way or another—passively or aggressively—your manager may conclude you can’t be trusted and get more involved,” says Manzoni. It may be tempting to complain, but it will probably only make

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your situation worse. “If I sense disdain, I’m going to be encouraged to show you that on my forehead it says ‘boss’ and on yours, it doesn’t,” says Manzoni. Instead, try to understand what’s causing your boss’s behavior. Is he under immense pressure? Is this his intuitive way of managing? Does the company culture encourage and reward this kind of behavior? If you recognize the underlying reasons, you can figure out how to respond.

Increase Trust Micromanagement is usually “based on a general view that the world’s standards are not up to what they should be,” says Chatman. You therefore need to make a conscious effort to earn your manager’s trust by succeeding in the dimensions that he cares most about. “You absolutely, positively must deliver and deliver in a way that doesn’t increase your boss’s stress. In fact, identify things that reduce [it],” says Manzoni. If you meet your boss’s standards—deliver work on time, make sure projects include the elements she wants—she’s likely to see you as someone she can lean on. The more she trusts you, the less inclined she’ll be to tell you exactly how to do something.

Make Up-front Agreements Another tactic is to talk to your boss—before a project starts—about how he’ll be involved. “Try to agree on standards and basic approach,” says Manzoni. What role will each of you play? What criteria will you use

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to measure the project’s success? Explain what you think the ideal plan of action is and then ask for his input. “Be sure you understand up front what the guiding principles are for the work—not just the tactical elements,” says Chatman. For example, if you’re working on an internal marketing campaign, be sure to talk about the message you want to send, not the font you should use. If the discussion becomes overly focused on detail, try to bring it back to the principles and approach you agreed on. Flattery can also work. Remind your boss that he’s better off not getting involved in the minutiae because his time and effort are more valuable to the big picture.

Keep Your Boss in the Loop Remember that micromanagers are often motivated by anxiety. “They are nervous about anyone else being able to do things as well or in the same way they would,” says Chatman. Address that concern by keeping your manager informed of your project’s progress. Schedule regular check-ins to help her feel part of the process. Or send unprompted e-mails that share important information. If she wants detail, get specific. Although annoying now, it may save you the effort of redoing work later on.

Give Feedback, but Only if Appropriate Telling a micromanager that you don’t appreciate his controlling behavior may only trigger more of it. But

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some managers may be open to hearing your input. “Try to catch your boss in a moment of openness,” says Manzoni. He suggests using the time in a scheduled performance review. Focus your feedback on how his behavior affects the process. Can you tweak his involvement so that he gets the information he needs without becoming a roadblock?

Get Help or Move On If none of these approaches work for you, ask yourself: Do I really want to work here? “If it’s pathological, you should consider transferring to another part of the company or finding another job,” says Manzoni. Before you throw in the towel, however, look to others inside the company. Find a trusted coworker or a reliable HR manager who can counsel you. At the very least, you’ll be able to do some restorative venting, and you may uncover additional tactics that could work for you.

Principles to Remember • Do everything you can to gain the micromanager’s trust • Know what worries your boss and try to reduce her concerns • Provide regular and detailed updates so your boss is aware of your progress • Don’t defy the micromanager—that often triggers more of the behavior you’re trying to avoid

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Case Study: Be Attentive to Her Concerns In 2006, Marcy Berke (names have been changed) worked for an insurance company with offices throughout the U.S. Her boss’s boss was a woman named Barbara, who was responsible for 10 agencies in her region. Barbara was passionate about efficiency. She asked all the agents in her region to produce a time report, accounting for the number of minutes each of them spent on various tasks each day. “She was concerned with keeping her own production figures up and burnishing her image with senior management,” Marcy says. Marcy recognized what mattered most to Barbara. “If I were heading up a project, I would make certain to e-mail Barbara, early and often, with any questions I might have about what her expectations were, and give her an outline of what my team was working on and the anticipated date of completion,” she says. If her team was having difficulty meeting the deadline for any reason, she would let Barbara know as soon as possible, providing both a reason and a revised end date. Marcy supplied the information Barbara needed without being asked first so that Barbara could learn to trust her. Since Marcy knew that Barbara was so preoccupied with time, she arrived at least two or three minutes early for meetings. When Marcy needed to set up a meeting with Barbara, she would make the request by e-mail, clearly stating the reason for the meeting, listing the questions she would be asking, and indicating how long the meeting would last.

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This approach worked well for Marcy. She was able to thrive at the company for four years, despite Barbara’s micromanagement, before she left to start her own firm.

Amy Gallo is a contributing editor at Harvard Business Review. Follow her on Twitter at @amyegallo.

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Dealing with Your Incompetent Boss by Amy Gallo

We all complain about our bosses from time to time. Some of us even consider it part of our job descriptions. But there’s a difference between watercooler griping and paralyzing frustration, just as there’s a clear distinction between a manager with a few flaws and one who is truly incompetent. So how can you handle your bad boss?

What the Experts Say “Most people have had experience with someone who is incompetent, or at least unhelpful,” says Annie McKee, coauthor of Becoming a Resonant Leader: Develop Your Emotional Intelligence, Renew Your Relationships, Sustain Your Effectiveness. That’s because too many companies promote people for the wrong reasons. Whether Adapted from content posted on hbr.org on June 6, 2011

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your boss lacks technical or managerial ability, says Michael Useem, author of Leading Up, bad bosses sap motivation, kill productivity, and can make you want to run from the job screaming. Although leaving is sometimes an option, it’s not the only one for coping with a bad boss. Consider these tactics first:

Understand Your Boss’s Incompetence Before you declare your boss useless, check your bias and better understand what you’re seeing. “When you’re looking at your boss, the first thing you need to do before you judge is look at yourself,” says McKee. Many of us have blind spots when it comes to our bosses. Ask yourself if you’re jealous of her position in the organization or if you have a natural tendency to resist authority. Also “. . . be cautious about your judgment until you collect all the evidence,” says Useem. Your boss may have stressors you don’t see or fully understand. “It’s very common for people to completely miss the pressures their bosses are under; partly because a good manager will buffer you from them,” says McKee. By learning more about your boss and developing empathy for him, you may reevaluate his competence. Even if you still conclude that he’s incapable, remember that he’s human. Don’t demonize him.

Ask Others for Help Look to peers or people outside the organization for advice and a place to vent. This doesn’t mean indiscriminate moaning about your boss. Instead find confidants: a 56

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trusted colleague, a spouse, a mentor, or a coach. Explain what you’re seeing, how it’s affecting you and your work, and ask for advice. “This is not to conspire against your boss but to check your point of view,” says Useem. People outside the situation can give you a fresh perspective or offer new coping strategies.

Find a Way to Make It Work Regardless of your boss’s incompetence, you need to work together to get your job done. Be creative in collaborating with her. Figure out where she excels and then find ways to pair your strengths with her weaknesses. For example, if your boss is a competent writer but falls apart in front of an audience, suggest ways you can help with her presentation to the executive team. Can you listen to her trial run? Or present portions of it, as a development opportunity for you? When you request something from her—whether it’s input on a work plan, an introduction to a colleague, or her permission to reach out to a client—be specific about what you need. And do as much of the work for her as you can: Provide a draft e-mail or point out the three areas you’d like her to comment on. If she’s unable to help, suggest an alternative: Perhaps you can ask one of her peers or superiors for input or the introduction. Your goal is to help her solve the problem, not set up more situations where she’ll fail.

Step Up Rather than give up on an ineffectual boss, focus on what you can do to make up the difference. If your boss fails to set priorities for the team, propose some that he can then 57

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approve or tweak. If meeting follow-up isn’t his strength, offer to send out the to-dos. Without harboring resentment, do what’s best for your team and the organization. Recognize that stepping up can be a growth opportunity; you may be taking on responsibilities someone at your level doesn’t usually have. And in the process, you gain the respect and appreciation of other higher-ups.

Develop Yourself Sometimes incompetence can manifest itself in a lack of communication. You may have a manager who hasn’t given you a clear sense of your goals or even a concrete job description. These are essential to doing your job well and advancing your career, so take them on yourself. Write your own job description and articulate goals for the quarter or year. Send them to your boss and ask to review them together. In person, you can then confirm your priorities and understand her expectations. If she’s still unresponsive, keep a record of what you’ve proposed and work to meet the goals you laid out. It may be that she isn’t sure what you should be working on and needs you to just take action.

Take Care of Yourself Working for an incompetent boss can be bad for your health. “There’s a lot of research on the negative psychological effects,” says McKee. She suggests creating boundaries that protect you from the emotional damage. We have a tendency to point to a bad boss and say, “He’s ruining my life.” But this ignores the fact that you have agency in the situation. “Once you become a victim, you

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cease to become a leader,” she says. Focus on what makes you happy about your job, not miserable. “We can come to work every day and pay attention to this horrible boss, or we can choose to pay attention to the people we are happy to see every day and the work we enjoy. We can choose which emotions we lean into,” says McKee. Whenever possible, take on projects that allow you to spend time in other parts of the organization or with other leaders. Identify a mentor who can provide you with the feedback and instruction you aren’t getting from your boss. Find a way to let off steam, such as taking short breaks throughout the day. Look for humor in the situation, and try not to allow one person to ruin your day, your job, or your career.

Amy Gallo is a contributing editor at Harvard Business Review. Follow her on Twitter at @amyegallo.

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Coping with a Conflict-Averse Boss by Anne Field

Does your boss avoid conflict at any cost? Do you find it difficult to get the resources you need because your boss won’t advocate for you? Does she push your team to the brink because she fears saying no to requests from above? Here’s how to cope—and get the critical feedback and guidance you need.

Make Conflict More Comfortable Having a defensive and conflict-averse boss doesn’t mean you can never disagree with him. When an issue crops up, frame it in terms that will get the best results for your business. Play devil’s advocate. Ask lots of “what if?” questions. “What if our printer continues to have quality-control issues? Might it be a good idea to start Adapted from reprint #C0504A

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investigating other options now just in case?” Use gentle lead-ins such as “I might be off base here, but . . .” or “This might sound like a crazy idea, but . . .” all the while reassuring your boss that you’re working toward the same goal as he is.

Focus on Problem Solving If you need to talk about a difficult issue with your boss, focus on the problem, not the people. This will help establish neutral ground. Offer specific suggestions. For example, if your weekly team meeting has turned into a gripe session for your colleagues, volunteer to create and distribute agendas. “I know how busy you are preparing the Williams presentation, so why don’t I poll everyone for agenda items for this week’s meeting?” You’ll help provide a structure for your boss to approve and then follow.

Gather Supporting Evidence If you want your boss to use her authority on your behalf, give her everything she needs to build her case: assemble data, write drafts, zero in on how your request fits into larger unit or organizational goals. For example, a manager in a consumer products company dragged her feet when her staff urged her to ask for a bigger budget. So, they gathered the necessary backup, specifying each team member’s duties, and the resources needed to meet their goals. They highlighted how meeting their goals would contribute to the unit’s overall strategy. With that ammunition in hand, the boss approached senior management with greater confidence. 62

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Put It in Writing If your boss dreads face-to-face conversations, especially performance reviews, send him e-mails and brief documents outlining your key accomplishments and areas of development. This will make it easier for him to engage in a productive conversation with you—rather than coming up with the documentation on his own. Guidelines can also help your conflict-averse boss work with larger groups. If his glossing over disagreements inhibits your team’s ability to air differences, check your perception with your teammates offline. If they also feel that he’s squelching productive debates in favor of peaceful chats, raise the issue with your boss in a oneon-one meeting. Propose that a little debate might help stoke the team’s creativity and that setting ground rules for such discussions would ensure that they’re productive. Volunteer to take notes to help keep the creative ideas moving along to implementation.

Ease In If you know that your boss will find a conversation awkward or unpleasant, don’t rush into it. Instead, open with a neutral, nonthreatening icebreaker. Cite a recent newspaper article about a common interest. Ask about her child or pet. Once you sense that she’s comfortable, ease into the discussion.

Anne Field is a business writer based in Pelham, New York.

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How to Give Your Boss Feedback by Amy Gallo

Have you ever wished you could tell your boss exactly what you think of her? That her obsessive mobile use during team meetings is demoralizing? That people roll their eyes about her compulsive control of the smallest details of every project? You see your boss in a variety of settings—client and team meetings, presentations, one-on-ones, negotiations—which gives you insight into her strengths and weaknesses. But even if your observations could be helpful, is it your place to share them with her? Could frank feedback put your job or your relationship at risk? Providing feedback to your boss, commonly called upward feedback, is a tricky process to master. But if you offer it correctly, your insight can not only help your boss, it can also improve your relationship with her. Adapted from content posted on hbr.org on March 24, 2010

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What the Experts Say John Baldoni, a leadership consultant and author of Lead Your Boss: The Subtle Art of Managing Up, says that leadership is all about perception; if leaders don’t know how others experience them, their performance suffers. And the higher up in an organization a leader sits, the harder it is to get honest feedback. Your input can help your boss see himself as others see him and help him to make critical adjustments in his behavior and approach. Of course, giving your boss feedback requires careful thought; here are some principles to keep in mind.

The Relationship Comes First The ability to give and receive upward feedback depends on the level of trust between you and your boss. If you know that she’s unreceptive to feedback, is likely to react negatively, or if you have a rocky relationship, don’t say anything. But “if your boss is open-minded and you have a good relationship,” Baldoni says, “you owe her the straight talk.” As with any feedback, your intentions must be good, and your desire to help your boss should supersede any issues you may have with her.

Wait to Be Invited Even if you have a great relationship, don’t launch into unsolicited feedback. Some bosses will request feedback at the end of your formal review, asking, “Is there anything else I can do to support you?” Or, when you first start working together, he may share his development

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areas and ask you to keep an eye out for certain behaviors that he’s working on. “In a perfect world, it is a manager’s responsibility to make it safe to give feedback,” says Baldoni. Of course, this is not how things usually happen. If your boss doesn’t directly request feedback, ask if she would like it. This might be easiest in the context of a new project or client. You can ask something such as “Would it be useful if I occasionally check in with you about how I think the project is going?” Setting it up in advance can smooth the process, but you can also give feedback in the moment. Try asking something along the lines of “Can I tell you about something I noticed in that meeting?” Emphasize that you’re trying to help her so that the client, project, or company will benefit.

Share Your Perspective Focus your feedback on what you’re actually seeing or hearing, not what you would do as the boss. Baldoni recommends saying things such as “I noticed that you were silent when Joe disagreed with your proposal. It can be intimidating when you don’t respond to criticism.” By sharing your perspective, you can help your boss see how others see him. This can be invaluable to a leader who may be disconnected from people in the lower ranks. Focusing on your perceptions also means realizing the limitations of your standpoint—you’re seeing only a partial picture of your boss’s performance and all the demands he’s juggling. James Detert, author of the Harvard Business Review articles “Why Employees Are

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Afraid to Speak” and “Speaking Up to Higher-Ups,” says, “Subordinates by and large don’t have a full appreciation of [their bosses’] reality.” Good feedback rules still apply. Your feedback should be honest, specific, and data-driven. Open with something positive and then offer constructive comments along with suggestions for improvement. Avoid accusations.

If Your Boss Bites Back No matter how thoughtfully you’ve prepared and delivered your feedback, your boss may get upset or defensive. Sometimes reframing it in terms of what your boss cares most about can help, says Detert. “Point out how specific behaviors [may be] inhibiting your boss from achieving her goals.” Gauge her reaction to determine how she prefers to receive feedback and what topics are out of bounds. Perhaps she doesn’t want to receive pointers on her communication style or a certain high-pressure initiative. Rather than clamming up after a negative reaction, take the opportunity to ask her about what would be useful going forward.

When in Doubt, Hold Your Tongue If you’re not sure your boss wants feedback or if the subject in question is sensitive, it’s better not to speak up. Don’t risk your working relationship or your job. Instead, look for opportunities to comment anonymously, such as a 360-degree feedback process. If you feel your boss’s behavior is putting the company or your unit in jeopardy, follow the appropriate channels in your company—starting with

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Human Resources or your employee resource manual or wiki.

Amy Gallo is a contributing editor at Harvard Business Review. Follow her on Twitter at @amyegallo.

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Managing Multiple Bosses by Amy Gallo

The movie Office Space, a comedy about work life in a typical 1990s software company, details the saga of Peter Gibbons—a man with eight different bosses. All of them, seemingly unaware of each other, pass by his desk and tell him what to do. Although the film is most certainly a satire, for some, it’s not far from the truth. Many of us report to more than one boss, so learning to handle multiple managers is essential.

What the Experts Say “As you go to a matrixed structure, you can easily have between one and seven immediate supervisors,” says Robert Sutton, the author of Good Boss, Bad Boss. Adam Grant, coauthor of the Harvard Business Review article “The Hidden Advantages of Quiet Bosses,” concurs. “As comAdapted from content posted on hbr.org on August 18, 2011

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panies continue to flatten, organize work around specific projects, and use temporary teams to complete projects, many employees find themselves reporting to multiple bosses,” he says. Although this is more likely to happen in bigger and more complex companies, it can happen in small organizations and family-owned businesses, too. Having many bosses is complicated, and, as Grant says, “If you’re not careful, you can end up letting all of them down.” Here are some guidelines to make your job, and theirs, easier.

Recognize the Challenges Although working for more than one person can present numerous challenges, there are three common ones to watch for:

1. Overload. With several people assigning you work, one of the greatest risks is simply having too much to do. “If you report to multiple bosses who supervise your efforts on different tasks and projects, it’s all too easy for each boss to treat you as if you have no other responsibilities,” says Grant. 2. Conflicting messages. “The more bosses you have, the more conflicting messages you get,” says Sutton. Sometimes this happens out of ignorance—your bosses aren’t aware of what the others are saying—or because people are pushing their own agendas. “Different bosses often have different expectations, and what 72

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impresses one may disappoint another,” says Grant. 3. Loyalty. “Some bosses want to know that they’re your first priority. If you have more than one boss who feels this way, it’s easy to get caught in the middle,” says Grant. You may need to negotiate between competing demands for your loyalty. So, how do you make it work?

Know Who Your Ultimate Boss Is Although you may take direction from multiple managers, most of us have one person who’s ultimately responsible for our careers. Ask a lot of questions about the reporting structure. Find out who completes your reviews and who contributes to them. Who makes decisions about your compensation, promotions, and so on?

Stay Connected Reporting to more than one person can be complicated further if your bosses are in different locations. When your bosses work remotely (or when you do), you need to overcommunicate to make up for the lack of face-to-face time. Rely on technology to help you. Make your calendar viewable to those outside the office or use a web-based tool such as Google Calendar. This will allow all your bosses to know where you are, even when they can’t see you. You can use the same calendar to indicate what days you’re working on which projects. To simulate the dropby-your-desk conversations, use an instant messaging 73

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application to have brief check-ins or ask quick questions. If only one of your bosses is remote, don’t inadvertently cater to the boss whom you see more often, and make sure the distant manager knows you’re meeting his needs, too.

Be Proactive About Your Workload Let everyone know what’s on your plate. Although it may not be in your job description, it will behoove you to negotiate between your bosses. “I would err on the side of taking the initiative to coordinate between them. Most bosses prefer proactive employees,” says Grant. You can create a shared document that lists all of your ongoing tasks and projects, or you can communicate these items in weekly check-in meetings.

Get Your Bosses to Communicate Most bosses appreciate your bringing them solutions, not problems, but this is complicated when you have more than one manager. Whether you need to resolve contradictory directions, reduce your workload, or sort out inconsistent demands, the best approach is to get your bosses to talk with each other, rather than trying to represent one’s agenda to the other. “Start by assuming the best. Invite them to discuss the conflicts and get them out on the table,” says Sutton. Bring your bosses together in the same place—in a face-to-face meeting or on a conference call—and explain what the conflict is. Enlist them in the problem solving and push for transparency. “If you ask your bosses for advice on how to handle the disagree-

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ment, they’re more likely to take your perspective and see the challenges from your point of view,” says Grant.

Set Boundaries “The most important skill for staying sane while reporting to multiple bosses is the ability to set boundaries,” says Grant. He points to research done by Harvard Business School professor Leslie Perlow. She found that engineers at a Fortune 500 company were constantly interrupted by managers and coworkers. She helped them create norms for quiet time: Three days a week, there would be no interruptions before noon so they could focus on work. If your multiple bosses frequently come to you with questions or to check in about their projects, establish protected times. As mentioned earlier, you can block out times in your calendar for work on certain projects. Before taking on a new project, remind your bosses that you’ll need to assess how it fits into your overall workload. Frame this as wanting to be sure you have enough bandwidth to do a project justice rather than putting the request off.

Get Sneaky if You Have To The aforementioned advice works best in a healthy organization, but yours may not reward transparency and proactive approaches. You may find that your bosses are unresponsive or unwilling to meet with you to resolve conflicts, which requires a different approach. “If you’re in a fearbased environment, you have to figure out how to protect yourself. The worse the environment, the sneakier you

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have to get,” says Sutton. Figure out which of your bosses has the most power, and prioritize her assignments. “The smart employee doesn’t ask. Instead, do your own calculation of who is more powerful and who would hurt you the least,” says Sutton.

Don’t Take It Personally Sutton notes that it’s easy to assume that your bosses are out to get you, but usually that’s not the case. They’re probably just pushing their own agendas, and you’re getting caught in the middle. Try not to feel persecuted. Instead, identify the conflicts and work to resolve them.

Reap the Benefits Despite the challenges, having more than one boss can also be an advantage. For example, you’re likely to get more robust feedback. If your bosses come from different parts of the organization, you’ll have access to a larger and more varied network. You probably have more autonomy because you don’t have one person calling all the shots. “Like a kid playing parents off each other, ask the person who you know will give you the answer you want,” says Sutton. Although this may seem underhanded, it’s an effective way to align your interests with those of your bosses and the company.

Case Study: A Monday Morning To-Do List Kim Bryant had been in the accounting industry for 15 years when she started with a new firm as a staff accountant. The company had three partners, and Kim was

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initially hired to work for one of them. But soon she was asked to continue her work for that partner and also help out one of the others. “The most difficult thing about working for two partners was that both had projects that they felt were urgent and it put me in an uncomfortable situation,” she says. Kim had to decide which project to work on first. When she asked one of her bosses for advice, he would say he wanted his project done first. Frequently, one partner assigned her something urgent when she was working on an upcoming deadline for the other. So Kim created a to-do list every Monday morning, prioritized by due date, and shared it with the two partners. “That allowed each partner to be aware of what I had been assigned to do,” she says. She also learned to watch their schedules, often with the help of their secretary. If Kim had been told that a project was urgent, she could gauge how soon she needed to do it based on when the partner was back in the office. She knew if she got it on his desk before he returned, she would be fine.

Amy Gallo is a contributing editor at Harvard Business Review. Follow her on Twitter at @amyegallo.

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Section 2

Managing Across Do you depend on lots of people over whom you have no authority? Do you struggle to navigate your company’s political landscape? To get your cross-functional team functioning? To collaborate across time zones? To motivate colleagues to meet your deadlines when they’re juggling countless other projects? Managing across—with peers, vendors, or consultants—is complex. You don’t have a say in their reviews or decide if they get promoted. So you need to use other tactics, such as setting mutually beneficial goals, establishing your credibility, polishing your powers of persuasion, and tapping into your network. The articles in this section will give you these tools.

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What Makes a Leader? A summary of the full-length HBR article by Daniel Goleman, highlighting key ideas.

THE IDEA IN BRIEF Are you so intent on meeting deadlines or hitting financial targets that you’re neglecting working relationships? Do you often interrupt colleagues? Fail to ask them what else is on their plates? If you nodded “yes” to any of these questions, you may have zeroed in on what’s getting in the way of your ability to work well with people at all levels, across silos, and with personalities that may be very different from your own. Managing across requires emotional intelligence: self-awareness, self-regulation, motivation, empathy, and social skill. Developing emotional intelligence will help you better understand your own—and others’—priorities, pressures, and work styles. Reprint #R0401H

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Definition

Knowing one’s emotions, strengths, weaknesses, drives, values, and goals—and their impact on others

Controlling or redirecting disruptive emotions and impulses

Being driven to achieve for the sake of achievement

Component

Self-Awareness

Self-Regulation

Motivation

• A passion for the work itself and for new challenges • Unflagging energy to improve • Optimism in the face of failure

• Trustworthiness • Integrity • Comfort with ambiguity and change

• Self-confidence • Realistic self-assessment • Self-deprecating sense of humor • Thirst for constructive criticism

Hallmarks

The Five Components of Emotional Intelligence

THE IDEA IN PRACTICE

A portfolio manager at an investment company sees her fund tumble for three consecutive quarters. Major clients defect. Instead of blaming external circumstances, she decides to learn from the experience—and engineers a turnaround.

When a team botches a presentation, its leader resists the urge to scream. Instead, she considers possible reasons for the failure, explains the consequences to her team, and explores solutions with them.

A manager knows tight deadlines bring out the worst in him. So he plans his time to get work done well in advance.

Example

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Considering others’ feelings, especially when making decisions

Managing relationships to move people in desired directions

Empathy

Social Skill

• Effectiveness in leading change • Persuasiveness • Extensive networking • Expertise in building and leading teams

• Expertise in attracting and retaining talent • Ability to develop others • Sensitivity to cross-cultural differences A manager wants his company to adopt a better Internet strategy. He finds kindred spirits and assembles a de facto team to create a prototype website. He persuades allies in other divisions to fund the company’s participation in a relevant convention. His company forms an Internet division— and puts him in charge of it.

An American consultant and her team pitch a project to a potential client in Japan. Her team interprets the client’s silence as disapproval and prepares to leave. The consultant reads the client’s body language and senses interest. She continues the meeting, and her team gets the job.

Managing Across

It was Daniel Goleman who first brought the term “emotional intelligence” to a wide audience with his 1995 book of that name, and it was Goleman who first applied the concept to business with his 1998 HBR article, reprinted here. In his research at nearly 200 large, global companies, Goleman found that while the qualities traditionally associated with leadership— such as intelligence, toughness, determination, and vision—are required for success, they are insufficient. Truly effective leaders are also distinguished by a high degree of emotional intelligence, which includes selfawareness, self-regulation, motivation, empathy, and social skill. These qualities may sound “soft” and unbusinesslike, but Goleman found direct ties between emotional intelligence and measurable business results. While emotional intelligence’s relevance to business has continued to spark debate over the past six years, Goleman’s article remains the definitive reference on the subject, with a description of each component of emotional intelligence and a detailed discussion of how to recognize it in potential leaders, how and why it connects to performance, and how it can be learned.

Every businessperson knows a story about a highly intelligent, highly skilled executive who was promoted into a leadership position only to fail at the job. And they also know a story about someone with solid—but not extraordinary—intellectual abilities and technical skills who was promoted into a similar position and then soared.

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Such anecdotes support the widespread belief that identifying individuals with the “right stuff” to be leaders is more art than science. After all, the personal styles of superb leaders vary: Some leaders are subdued and analytical; others shout their manifestos from the mountaintops. And just as important, different situations call for different types of leadership. Most mergers need a sensitive negotiator at the helm, whereas many turnarounds require a more forceful authority. I have found, however, that the most effective leaders are alike in one crucial way: They all have a high degree of what has come to be known as emotional intelligence. It’s not that IQ and technical skills are irrelevant. They do matter, but mainly as “threshold capabilities”; that is, they are the entry-level requirements for executive positions. But my research, along with other recent studies, clearly shows that emotional intelligence is the sine qua non of leadership. Without it, a person can have the best training in the world, an incisive, analytical mind, and an endless supply of smart ideas, but he still won’t make a great leader. In the course of the past year, my colleagues and I have focused on how emotional intelligence operates at work. We have examined the relationship between emotional intelligence and effective performance, especially in leaders. And we have observed how emotional intelligence shows itself on the job. How can you tell if someone has high emotional intelligence, for example, and how can you recognize it in yourself? In the following pages, we’ll explore these questions, taking each of the

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components of emotional intelligence—self-awareness, self-regulation, motivation, empathy, and social skill— in turn.

Evaluating Emotional Intelligence Most large companies today have employed trained psychologists to develop what are known as “competency models” to aid them in identifying, training, and promoting likely stars in the leadership firmament. The psychologists have also developed such models for lower-level positions. And in recent years, I have analyzed competency models from 188 companies, most of which were large and global and included the likes of Lucent Technologies, British Airways, and Credit Suisse. In carrying out this work, my objective was to determine which personal capabilities drove outstanding performance within these organizations, and to what degree they did so. I grouped capabilities into three categories: purely technical skills like accounting and business planning; cognitive abilities like analytical reasoning; and competencies demonstrating emotional intelligence, such as the ability to work with others and effectiveness in leading change. To create some of the competency models, psychologists asked senior managers at the companies to identify the capabilities that typified the organization’s most outstanding leaders. To create other models, the psychologists used objective criteria, such as a division’s profitability, to differentiate the star performers at senior levels within their organizations from the average ones. Those individuals were then extensively interviewed and tested,

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and their capabilities were compared. This process resulted in the creation of lists of ingredients for highly effective leaders. The lists ranged in length from seven to 15 items and included such ingredients as initiative and strategic vision. When I analyzed all this data, I found dramatic results. To be sure, intellect was a driver of outstanding performance. Cognitive skills such as big-picture thinking and long-term vision were particularly important. But when I calculated the ratio of technical skills, IQ, and emotional intelligence as ingredients of excellent performance, emotional intelligence proved to be twice as important as the others for jobs at all levels. Moreover, my analysis showed that emotional intelligence played an increasingly important role at the highest levels of the company, where differences in technical skills are of negligible importance. In other words, the higher the rank of a person considered to be a star performer, the more emotional intelligence capabilities showed up as the reason for his or her effectiveness. When I compared star performers with average ones in senior leadership positions, nearly 90% of the difference in their profiles was attributable to emotional intelligence factors rather than cognitive abilities. Other researchers have confirmed that emotional intelligence not only distinguishes outstanding leaders but can also be linked to strong performance. The findings of the late David McClelland, the renowned researcher in human and organizational behavior, are a good example. In a 1996 study of a global food and beverage company, McClelland found that when senior managers

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had a critical mass of emotional intelligence capabilities, their divisions outperformed yearly earnings goals by 20%. Meanwhile, division leaders without that critical mass underperformed by almost the same amount. McClelland’s findings, interestingly, held as true in the company’s U.S. divisions as in its divisions in Asia and Europe. In short, the numbers are beginning to tell us a persuasive story about the link between a company’s success and the emotional intelligence of its leaders. And just as important, research is also demonstrating that people can, if they take the right approach, develop their emotional intelligence. (See the sidebar “Can Emotional Intelligence Be Learned?”)

Self-Awareness Self-awareness is the first component of emotional intelligence—which makes sense when one considers that the Delphic oracle gave the advice to “know thyself” thousands of years ago. Self-awareness means having a deep understanding of one’s emotions, strengths, weaknesses, needs, and drives. People with strong selfawareness are neither overly critical nor unrealistically hopeful. Rather, they are honest—with themselves and with others. People who have a high degree of self-awareness recognize how their feelings affect them, other people, and their job performance. Thus, a self-aware person who knows that tight deadlines bring out the worst in him plans his time carefully and gets his work done well in advance. Another person with high self-awareness will

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The Five Components of Emotional Intelligence at Work Definition

Hallmarks

Self-Awareness

the ability to recognize and understand your moods, emotions, and drives, as well as their effect on others

self-confidence realistic self-assessment self-deprecating sense of humor

Self-Regulation

the ability to control or redirect disruptive impulses and moods

trustworthiness and integrity comfort with ambiguity openness to change

the propensity to suspend judgment—to think before acting Motivation

a passion to work for reasons that go beyond money or status a propensity to pursue goals with energy and persistence

strong drive to achieve optimism, even in the face of failure organizational commitment

Empathy

the ability to understand the emotional makeup of other people skill in treating people according to their emotional reactions

expertise in building and retaining talent cross-cultural sensitivity

proficiency in managing relationships and building networks an ability to find common ground and build rapport

effectiveness in leading change persuasiveness

Social Skill

service to clients and customers

expertise in building and leading teams

be able to work with a demanding client. She will understand the client’s impact on her moods and the deeper reasons for her frustration. “Their trivial demands take us away from the real work that needs to be done,” she might explain. And she will go one step further and turn her anger into something constructive.

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CAN EMOTIONAL INTELLIGENCE BE LEARNED? For ages, people have debated if leaders are born or made. So too goes the debate about emotional intelligence. Are people born with certain levels of empathy, for example, or do they acquire empathy as a result of life’s experiences? The answer is both. Scientific inquiry strongly suggests that there is a genetic component to emotional intelligence. Psychological and developmental research indicates that nurture plays a role as well. How much of each perhaps will never be known, but research and practice clearly demonstrate that emotional intelligence can be learned. One thing is certain: Emotional intelligence increases with age. There is an old-fashioned word for the phenomenon: maturity. Yet even with maturity, some people still need training to enhance their emotional intelligence. Unfortunately, far too many training programs that intend to build leadership skills—including emotional intelligence—are a waste of time and money. The problem is simple: They focus on the wrong part of the brain. Emotional intelligence is born largely in the neurotransmitters of the brain’s limbic system, which governs feelings, impulses, and drives. Research indicates that the limbic system learns best through motivation, extended practice, and feedback. Compare this with the kind of learning that goes on in the neocortex, which governs analytical and technical ability.

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The neocortex grasps concepts and logic. It is the part of the brain that figures out how to use a computer or make a sales call by reading a book. Not surprisingly— but mistakenly—it is also the part of the brain targeted by most training programs aimed at enhancing emotional intelligence. When such programs take, in effect, a neocortical approach, my research with the Consortium for Research on Emotional Intelligence in Organizations has shown they can even have a negative impact on people’s job performance. To enhance emotional intelligence, organizations must refocus their training to include the limbic system. They must help people break old behavioral habits and establish new ones. That not only takes much more time than conventional training programs, it also requires an individualized approach. Imagine an executive who is thought to be low on empathy by her colleagues. Part of that deficit shows itself as an inability to listen; she interrupts people and doesn’t pay close attention to what they’re saying. To fix the problem, the executive needs to be motivated to change, and then she needs practice and feedback from others in the company. A colleague or coach could be tapped to let the executive know when she has been observed failing to listen. She would then have to replay the incident and give a better response; (continued)

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(continued) that is, demonstrate her ability to absorb what others are saying. And the executive could be directed to observe certain executives who listen well and to mimic their behavior. With persistence and practice, such a process can lead to lasting results. I know one Wall Street executive who sought to improve his empathy—specifically his ability to read people’s reactions and see their perspectives. Before beginning his quest, the executive’s subordinates were terrified of working with him. People even went so far as to hide bad news from him. Naturally, he was shocked when finally confronted with these facts. He went home and told his family—but they only confirmed what he had heard at work. When their opinions on any given subject did not mesh with his, they, too, were frightened of him. Enlisting the help of a coach, the executive went to work to heighten his empathy through practice and feedback. His first step was to take a vacation to a foreign country where he did not speak the language. While there, he monitored his reactions to the unfamiliar and his openness to people who were different from him. When he returned home, humbled by his week

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abroad, the executive asked his coach to shadow him for parts of the day, several times a week, to critique how he treated people with new or different perspectives. At the same time, he consciously used on-thejob interactions as opportunities to practice “hearing” ideas that differed from his. Finally, the executive had himself videotaped in meetings and asked those who worked for and with him to critique his ability to acknowledge and understand the feelings of others. It took several months, but the executive’s emotional intelligence did ultimately rise, and the improvement was reflected in his overall performance on the job. It’s important to emphasize that building one’s emotional intelligence cannot—will not—happen without sincere desire and concerted effort. A brief seminar won’t help; nor can one buy a how-to manual. It is much harder to learn to empathize—to internalize empathy as a natural response to people—than it is to become adept at regression analysis. But it can be done. “Nothing great was ever achieved without enthusiasm,” wrote Ralph Waldo Emerson. If your goal is to become a real leader, these words can serve as a guidepost in your efforts to develop high emotional intelligence.

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Self-awareness extends to a person’s understanding of his or her values and goals. Someone who is highly self-aware knows where he is headed and why; so, for example, he will be able to be firm in turning down a job offer that is tempting financially but does not fit with his principles or long-term goals. A person who lacks selfawareness is apt to make decisions that bring on inner turmoil by treading on buried values. “The money looked good so I signed on,” someone might say two years into a job, “but the work means so little to me that I’m constantly bored.” The decisions of self-aware people mesh with their values; consequently, they often find work to be energizing. How can one recognize self-awareness? First and foremost, it shows itself as candor and an ability to assess oneself realistically. People with high self-awareness are able to speak accurately and openly—although not necessarily effusively or confessionally—about their emotions and the impact they have on their work. For instance, one manager I know of was skeptical about a new personalshopper service that her company, a major departmentstore chain, was about to introduce. Without prompting from her team or her boss, she offered them an explanation: “It’s hard for me to get behind the rollout of this service,” she admitted, “because I really wanted to run the project, but I wasn’t selected. Bear with me while I deal with that.” The manager did indeed examine her feelings; a week later, she was supporting the project fully. Such self-knowledge often shows itself in the hiring process. Ask a candidate to describe a time he got carried away by his feelings and did something he later regret-

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ted. Self-aware candidates will be frank in admitting to failure—and will often tell their tales with a smile. One of the hallmarks of self-awareness is a self-deprecating sense of humor. Self-awareness can also be identified during performance reviews. Self-aware people know—and are comfortable talking about—their limitations and strengths, and they often demonstrate a thirst for constructive criticism. By contrast, people with low self-awareness interpret the message that they need to improve as a threat or a sign of failure. Self-aware people can also be recognized by their selfconfidence. They have a firm grasp of their capabilities and are less likely to set themselves up to fail by, for example, overstretching on assignments. They know, too, when to ask for help. And the risks they take on the job are calculated. They won’t ask for a challenge that they know they can’t handle alone. They’ll play to their strengths. Consider the actions of a midlevel employee who was invited to sit in on a strategy meeting with her company’s top executives. Although she was the most junior person in the room, she did not sit there quietly, listening in awestruck or fearful silence. She knew she had a head for clear logic and the skill to present ideas persuasively, and she offered cogent suggestions about the company’s strategy. At the same time, her self-awareness stopped her from wandering into territory where she knew she was weak. Despite the value of having self-aware people in the workplace, my research indicates that senior executives

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don’t often give self-awareness the credit it deserves when they look for potential leaders. Many executives mistake candor about feelings for “wimpiness” and fail to give due respect to employees who openly acknowledge their shortcomings. Such people are too readily dismissed as “not tough enough” to lead others. In fact, the opposite is true. In the first place, people generally admire and respect candor. Furthermore, leaders are constantly required to make judgment calls that require a candid assessment of capabilities—their own and those of others. Do we have the management expertise to acquire a competitor? Can we launch a new product within six months? People who assess themselves honestly—that is, self-aware people—are well suited to do the same for the organizations they run.

Self-Regulation Biological impulses drive our emotions. We cannot do away with them—but we can do much to manage them. Self-regulation, which is like an ongoing inner conversation, is the component of emotional intelligence that frees us from being prisoners of our feelings. People engaged in such a conversation feel bad moods and emotional impulses just as everyone else does, but they find ways to control them and even to channel them in useful ways. Imagine an executive who has just watched a team of his employees present a botched analysis to the company’s board of directors. In the gloom that follows, the executive might find himself tempted to pound on the table in anger or kick over a chair. He could leap up and

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scream at the group. Or he might maintain a grim silence, glaring at everyone before stalking off. But if he had a gift for self-regulation, he would choose a different approach. He would pick his words carefully, acknowledging the team’s poor performance without rushing to any hasty judgment. He would then step back to consider the reasons for the failure. Are they personal—a lack of effort? Are there any mitigating factors? What was his role in the debacle? After considering these questions, he would call the team together, lay out the incident’s consequences, and offer his feelings about it. He would then present his analysis of the problem and a well-considered solution. Why does self-regulation matter so much for leaders? First of all, people who are in control of their feelings and impulses—that is, people who are reasonable—are able to create an environment of trust and fairness. In such an environment, politics and infighting are sharply reduced and productivity is high. Talented people flock to the organization and aren’t tempted to leave. And selfregulation has a trickle-down effect. No one wants to be known as a hothead when the boss is known for her calm approach. Fewer bad moods at the top mean fewer throughout the organization. Second, self-regulation is important for competitive reasons. Everyone knows that business today is rife with ambiguity and change. Companies merge and break apart regularly. Technology transforms work at a dizzying pace. People who have mastered their emotions are able to roll with the changes. When a new program is announced,

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they don’t panic; instead, they are able to suspend judgment, seek out information, and listen to the executives as they explain the new program. As the initiative moves forward, these people are able to move with it. Sometimes they even lead the way. Consider the case of a manager at a large manufacturing company. Like her colleagues, she had used a certain software program for five years. The program drove how she collected and reported data and how she thought about the company’s strategy. One day, senior executives announced that a new program was to be installed that would radically change how information was gathered and assessed within the organization. While many people in the company complained bitterly about how disruptive the change would be, the manager mulled over the reasons for the new program and was convinced of its potential to improve performance. She eagerly attended training sessions—some of her colleagues refused to do so—and was eventually promoted to run several divisions, in part because she used the new technology so effectively. I want to push the importance of self-regulation to leadership even further and make the case that it enhances integrity, which is not only a personal virtue but also an organizational strength. Many of the bad things that happen in companies are a function of impulsive behavior. People rarely plan to exaggerate profits, pad expense accounts, dip into the till, or abuse power for selfish ends. Instead, an opportunity presents itself, and people with low impulse control just say yes. By contrast, consider the behavior of the senior executive at a large food company. The executive was scrupu-

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lously honest in his negotiations with local distributors. He would routinely lay out his cost structure in detail, thereby giving the distributors a realistic understanding of the company’s pricing. This approach meant the executive couldn’t always drive a hard bargain. Now, on occasion, he felt the urge to increase profits by withholding information about the company’s costs. But he challenged that impulse—he saw that it made more sense in the long run to counteract it. His emotional self-regulation paid off in strong, lasting relationships with distributors that benefited the company more than any short-term financial gains would have. The signs of emotional self-regulation, therefore, are easy to see: a propensity for reflection and thoughtfulness; comfort with ambiguity and change; and integrity— an ability to say no to impulsive urges. Like self-awareness, self-regulation often does not get its due. People who can master their emotions are sometimes seen as cold fish—their considered responses are taken as a lack of passion. People with fiery temperaments are frequently thought of as “classic” leaders—their outbursts are considered hallmarks of charisma and power. But when such people make it to the top, their impulsiveness often works against them. In my research, extreme displays of negative emotion have never emerged as a driver of good leadership.

Motivation If there is one trait that virtually all effective leaders have, it is motivation. They are driven to achieve beyond expectations—their own and everyone else’s. The key

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word here is achieve. Plenty of people are motivated by external factors, such as a big salary or the status that comes from having an impressive title or being part of a prestigious company. By contrast, those with leadership potential are motivated by a deeply embedded desire to achieve for the sake of achievement. If you are looking for leaders, how can you identify people who are motivated by the drive to achieve rather than by external rewards? The first sign is a passion for the work itself—such people seek out creative challenges, love to learn, and take great pride in a job well done. They also display an unflagging energy to do things better. People with such energy often seem restless with the status quo. They are persistent with their questions about why things are done one way rather than another; they are eager to explore new approaches to their work. A cosmetics company manager, for example, was frustrated that he had to wait two weeks to get sales results from people in the field. He finally tracked down an automated phone system that would beep each of his salespeople at 5 p.m. every day. An automated message then prompted them to punch in their numbers—how many calls and sales they had made that day. The system shortened the feedback time on sales results from weeks to hours. That story illustrates two other common traits of people who are driven to achieve. They are forever raising the performance bar, and they like to keep score. Take the performance bar first. During performance reviews, people with high levels of motivation might ask to be “stretched” by their superiors. Of course, an employee

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who combines self-awareness with internal motivation will recognize her limits—but she won’t settle for objectives that seem too easy to fulfill. And it follows naturally that people who are driven to do better also want a way of tracking progress—their own, their team’s, and their company’s. Whereas people with low achievement motivation are often fuzzy about results, those with high achievement motivation often keep score by tracking such hard measures as profitability or market share. I know of a money manager who starts and ends his day on the Internet, gauging the performance of his stock fund against four industry-set benchmarks. Interestingly, people with high motivation remain optimistic even when the score is against them. In such cases, self-regulation combines with achievement motivation to overcome the frustration and depression that come after a setback or failure. Take the case of an another portfolio manager at a large investment company. After several successful years, her fund tumbled for three consecutive quarters, leading three large institutional clients to shift their business elsewhere. Some executives would have blamed the nosedive on circumstances outside their control; others might have seen the setback as evidence of personal failure. This portfolio manager, however, saw an opportunity to prove she could lead a turnaround. Two years later, when she was promoted to a very senior level in the company, she described the experience as “the best thing that ever happened to me; I learned so much from it.” Executives trying to recognize high levels of achievement motivation in their people can look for one last

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piece of evidence: commitment to the organization. When people love their jobs for the work itself, they often feel committed to the organizations that make that work possible. Committed employees are likely to stay with an organization even when they are pursued by headhunters waving money. It’s not difficult to understand how and why a motivation to achieve translates into strong leadership. If you set the performance bar high for yourself, you will do the same for the organization when you are in a position to do so. Likewise, a drive to surpass goals and an interest in keeping score can be contagious. Leaders with these traits can often build a team of managers around them with the same traits. And of course, optimism and organizational commitment are fundamental to leadership— just try to imagine running a company without them.

Empathy Of all the dimensions of emotional intelligence, empathy is the most easily recognized. We have all felt the empathy of a sensitive teacher or friend; we have all been struck by its absence in an unfeeling coach or boss. But when it comes to business, we rarely hear people praised, let alone rewarded, for their empathy. The very word seems unbusinesslike, out of place amid the tough realities of the marketplace. But empathy doesn’t mean a kind of “I’m OK, you’re OK” mushiness. For a leader, that is, it doesn’t mean adopting other people’s emotions as one’s own and trying to please everybody. That would be a nightmare—it would

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make action impossible. Rather, empathy means thoughtfully considering employees’ feelings—along with other factors—in the process of making intelligent decisions. For an example of empathy in action, consider what happened when two giant brokerage companies merged, creating redundant jobs in all their divisions. One division manager called his people together and gave a gloomy speech that emphasized the number of people who would soon be fired. The manager of another division gave his people a different kind of speech. He was up-front about his own worry and confusion, and he promised to keep people informed and to treat everyone fairly. The difference between these two managers was empathy. The first manager was too worried about his own fate to consider the feelings of his anxiety-stricken colleagues. The second knew intuitively what his people were feeling, and he acknowledged their fears with his words. Is it any surprise that the first manager saw his division sink as many demoralized people, especially the most talented, departed? By contrast, the second manager continued to be a strong leader, his best people stayed, and his division remained as productive as ever. Empathy is particularly important today as a component of leadership for at least three reasons: the increasing use of teams; the rapid pace of globalization; and the growing need to retain talent. Consider the challenge of leading a team. As anyone who has ever been a part of one can attest, teams are cauldrons of bubbling emotions. They are often charged with reaching a consensus—which is hard enough with

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two people and much more difficult as the numbers increase. Even in groups with as few as four or five members, alliances form and clashing agendas get set. A team’s leader must be able to sense and understand the viewpoints of everyone around the table. That’s exactly what a marketing manager at a large information technology company was able to do when she was appointed to lead a troubled team. The group was in turmoil, overloaded by work and missing deadlines. Tensions were high among the members. Tinkering with procedures was not enough to bring the group together and make it an effective part of the company. So the manager took several steps. In a series of oneon-one sessions, she took the time to listen to everyone in the group—what was frustrating them, how they rated their colleagues, whether they felt they had been ignored. And then she directed the team in a way that brought it together: She encouraged people to speak more openly about their frustrations, and she helped people raise constructive complaints during meetings. In short, her empathy allowed her to understand her team’s emotional makeup. The result was not just heightened collaboration among members but also added business, as the team was called on for help by a wider range of internal clients. Globalization is another reason for the rising importance of empathy for business leaders. Cross-cultural dialogue can easily lead to miscues and misunderstandings. Empathy is an antidote. People who have it are attuned to subtleties in body language; they can hear the message beneath the words being spoken. Beyond that,

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they have a deep understanding of both the existence and the importance of cultural and ethnic differences. Consider the case of an American consultant whose team had just pitched a project to a potential Japanese client. In its dealings with Americans, the team was accustomed to being bombarded with questions after such a proposal, but this time it was greeted with a long silence. Other members of the team, taking the silence as disapproval, were ready to pack and leave. The lead consultant gestured them to stop. Although he was not particularly familiar with Japanese culture, he read the client’s face and posture and sensed not rejection but interest—even deep consideration. He was right: When the client finally spoke, it was to give the consulting firm the job. Finally, empathy plays a key role in the retention of talent, particularly in today’s information economy. Leaders have always needed empathy to develop and keep good people, but today the stakes are higher. When good people leave, they take the company’s knowledge with them. That’s where coaching and mentoring come in. It has repeatedly been shown that coaching and mentoring pay off not just in better performance but also in increased job satisfaction and decreased turnover. But what makes coaching and mentoring work best is the nature of the relationship. Outstanding coaches and mentors get inside the heads of the people they are helping. They sense how to give effective feedback. They know when to push for better performance and when to hold back. In the way they motivate their protégés, they demonstrate empathy in action.

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In what is probably sounding like a refrain, let me repeat that empathy doesn’t get much respect in business. People wonder how leaders can make hard decisions if they are “feeling” for all the people who will be affected. But leaders with empathy do more than sympathize with people around them: They use their knowledge to improve their companies in subtle but important ways.

Social Skill The first three components of emotional intelligence are self-management skills. The last two, empathy and social skill, concern a person’s ability to manage relationships with others. As a component of emotional intelligence, social skill is not as simple as it sounds. It’s not just a matter of friendliness, although people with high levels of social skill are rarely mean-spirited. Social skill, rather, is friendliness with a purpose: moving people in the direction you desire, whether that’s agreement on a new marketing strategy or enthusiasm about a new product. Socially skilled people tend to have a wide circle of acquaintances, and they have a knack for finding common ground with people of all kinds—a knack for building rapport. That doesn’t mean they socialize continually; it means they work according to the assumption that nothing important gets done alone. Such people have a network in place when the time for action comes. Social skill is the culmination of the other dimensions of emotional intelligence. People tend to be very effective at managing relationships when they can understand and control their own emotions and can empathize with the feelings of others. Even motivation contributes

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to social skill. Remember that people who are driven to achieve tend to be optimistic, even in the face of setbacks or failure. When people are upbeat, their “glow” is cast upon conversations and other social encounters. They are popular, and for good reason. Because it is the outcome of the other dimensions of emotional intelligence, social skill is recognizable on the job in many ways that will by now sound familiar. Socially skilled people, for instance, are adept at managing teams—that’s their empathy at work. Likewise, they are expert persuaders—a manifestation of self-awareness, self-regulation, and empathy combined. Given those skills, good persuaders know when to make an emotional plea, for instance, and when an appeal to reason will work better. And motivation, when publicly visible, makes such people excellent collaborators; their passion for the work spreads to others, and they are driven to find solutions. But sometimes social skill shows itself in ways the other emotional intelligence components do not. For instance, socially skilled people may at times appear not to be working while at work. They seem to be idly schmoozing—chatting in the hallways with colleagues or joking around with people who are not even connected to their “real” jobs. Socially skilled people, however, don’t think it makes sense to arbitrarily limit the scope of their relationships. They build bonds widely because they know that in these fluid times, they may need help someday from people they are just getting to know today. For example, consider the case of an executive in the strategy department of a global computer manufacturer.

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By 1993, he was convinced that the company’s future lay with the Internet. Over the course of the next year, he found kindred spirits and used his social skill to stitch together a virtual community that cut across levels, divisions, and nations. He then used this de facto team to put up a corporate website, among the first by a major company. And, on his own initiative, with no budget or formal status, he signed up the company to participate in an annual Internet industry convention. Calling on his allies and persuading various divisions to donate funds, he recruited more than 50 people from a dozen different units to represent the company at the convention. Management took notice: Within a year of the conference, the executive’s team formed the basis for the company’s first Internet division, and he was formally put in charge of it. To get there, the executive had ignored conventional boundaries, forging and maintaining connections with people in every corner of the organization. Is social skill considered a key leadership capability in most companies? The answer is yes, especially when compared with the other components of emotional intelligence. People seem to know intuitively that leaders need to manage relationships effectively; no leader is an island. After all, the leader’s task is to get work done through other people, and social skill makes that possible. A leader who cannot express her empathy may as well not have it at all. And a leader’s motivation will be useless if he cannot communicate his passion to the organization. Social skill allows leaders to put their emotional intelligence to work.

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It would be foolish to assert that good-old-fashioned IQ and technical ability are not important ingredients in strong leadership. But the recipe would not be complete without emotional intelligence. It was once thought that the components of emotional intelligence were “nice to have” in business leaders. But now we know that, for the sake of performance, these are ingredients that leaders “need to have.” It is fortunate, then, that emotional intelligence can be learned. The process is not easy. It takes time and, most of all, commitment. But the benefits that come from having a well-developed emotional intelligence, both for the individual and for the organization, make it worth the effort.

Daniel Goleman is the author of Emotional Intelligence (Bantam, 1995) and a coauthor of Primal Leadership: Realizing the Power of Emotional Intelligence (Harvard Business School, 2002). He is the cochairman of the Consortium for Research on Emotional Intelligence in Organizations, which is based at Rutgers University’s Graduate School of Applied and Professional Psychology in Piscataway, New Jersey. He can be reached at Daniel. [email protected].

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The Discipline of Teams A summary of the full-length HBR article by Jon R. Katzenbach and Douglas K. Smith, highlighting key ideas.

THE IDEA IN BRIEF Managing across is especially challenging when you’re leading a group of colleagues. You’re not their boss, but on this project, you’re their leader. How can you get them to focus on your team’s work when they also need to tend their own small fires—or meet their bosses’ demands? When you instill in your group the discipline of teams, your struggles will diminish. You’ll be helping your team create a shared vision and then realize that vision with individual and mutual accountability.

Reprint #R0507P

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THE IDEA IN PRACTICE A team’s essential discipline includes these characteristics:

1. A meaningful common purpose the team helps shape. Most teams are responding to an initial corporate mandate. But to be successful, your team must “own” this purpose by developing its own spin on it. For example, if one of your company’s strategic priorities is to increase customer retention, how might your web team translate that into its common purpose? By committing itself to becoming the online destination of choice for B2C customers in your industry. 2. Specific performance goals that flow from the common purpose. Developing compelling and measurable goals will inspire and challenge your team, and inject a sense of urgency. Shared goals also have a leveling effect. They require everyone to focus on their collective effort rather than on any differences in their titles or status. For example, your web team might set the following goals on its way to becoming the online destination of choice for its B2C customers: 1) Increase first-time visitors to the site by 50% over last year; 2) grow repeat site visitors by 25% over last year; 3) boost e-commerce sales by 15% over last year.

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3. A strong commitment to how the work gets done.  Your team must agree on who will do what jobs, how you will establish and honor schedules, and how you will make and modify decisions. On a genuine team, everyone does equivalent amounts of real work; all members—even you as leader—contribute in concrete ways to the team’s collective work. Developing these rules of conduct at the outset will help your team achieve its purpose and goals. The most critical rules pertain to attendance (for example, “if you can’t make a meeting, send notes or a representative who can speak for you”); focus (“no checking e-mail during meetings”); discussion (“no sacred cows”); confidentiality (“the only things to leave this room are what we agree on”); analytic approach (“base decisions on data, not assumptions”); end-product orientation (“everyone gets assignments and does them”); constructive confrontation (“no finger pointing”); and, often the most important, contributions (“everyone does real work”). 4. Mutual accountability. You can’t force trust and commitment. The process of creating and agreeing upon purpose and goals helps your team members forge their accountability to one another—not just to you, the leader. For example, as your web team makes progress toward its three goals, everyone becomes

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increasingly eager to contribute to the team’s success. Individuals volunteer their own and others’ areas of expertise: The person with the best eye for visual detail prepares the PowerPoint presentation for the next unit meeting; the one who has the strongest relationship with your IT director spearheads delicate conversations about prioritizing the team’s technology needs.

Jon R. Katzenbach is a founder and senior partner of Katzenbach Partners, a strategic and organizational consulting firm, and a former director of McKinsey & Company. His most recent book is Why Pride Matters More Than Money: The Power of the World’s Greatest Motivational Force (Crown Business, 2003). Douglas K. Smith is an organizational consultant and a former partner at McKinsey & Company. His most recent book is On Value and Values: Thinking Differently About We in an Age of Me (Financial Times Prentice Hall, 2004).

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Managing Remote Relationships by Karen Dillon

After you’ve dialed someone into a meeting, do you find it difficult to meaningfully involve her in the conversation—and make her feel involved? I’ve been there hundreds of times. I’ve even caught myself rolling my eyes as the person on the other end of that star-shaped phone breathed too loudly, spoke at the wrong time, or worst of all, didn’t stop talking when everyone else was willing her to do so. But then I began working on overseas assignments, and it was my voice in the dreaded “box”—so I started to see things differently. It’s horrible trying to call in when people are chitchatting and making noises with their chairs. And you can never quite read the unspoken tone of the meeting. You talk too much because you want people to know you’re there and at full attention. Or you talk too little because you can’t figure out when it’s appropriate to break in.

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Though many of us work with remote colleagues and partners—or work remotely ourselves—we struggle to manage relationships with people we don’t run into at the coffee station every day. That doesn’t have to be the case. You can build strong connections. Here’s what’s worked in my experience.

If You’re Working with Someone Remote . . . Talk openly about the challenges Whether you’re managing a remote employee, working peer-to-peer, or partnering with someone at another company, it helps to frankly discuss the challenges as you both see them. Clarify expectations up front, and the remote worker will become more productive—and happier. When I managed a West Coast employee from an East Coast office, for example, she initially thought I expected her to immediately jump on phone calls and e-mail queries. What I actually wanted was for her to be a vibrant contributor of ideas and work; to be aware of what her East Coast colleagues were working on, helping them when possible; and to have a clear sense of how she fit into the organization. Until we directly discussed that, she slavishly sat at her desk while I imagined she was out mining her area for ideas and people. We swiftly resolved this misunderstanding with a single conversation. Without peers in the next cubicle to informally guide them, remote employees will make basic mistakes early on, despite their good intentions, so it’s also crucial to be candid with them. Perhaps they’ve excessively charged

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expenses to a corporate account, for example, or spent too much time on a low-priority project. Let them know right away. Of course, it’s best practice to offer timely feedback to all employees, but it’s especially important for remote workers. Help them correct course before a few innocent, early errors become a troublesome pattern of behavior.

Err on the side of overcommunicating Set up regular times to catch up on the phone. As an onsite manager, I decided every two weeks felt about right for formal check-ins with my remote colleagues, with the proviso that we could talk whenever an issue arose. I was always grateful to people who came to those conversations with an agenda and a list of questions or comments (ideally sent in advance). That meant I didn’t have the burden of guessing what their needs might be. It was, however, my responsibility to keep them up to date and give them information that would help them work effectively with people on-site (for example, “Joe’s in meetings all day— best time to catch him is first thing in the morning”). Otherwise, they wouldn’t know the right questions to ask. Keep a running list of things to share with your remote colleagues or partners; don’t assume they’re copied on important announcements about your company or division. When I began working off-site, I was surprised at how much I couldn’t pick up simply by keeping up with e-mail. People were hired. Projects were canceled. Desirable assignments were handed out. And I missed it all. Sometimes even little details are critical to share— the fact that someone has had a death in the family,

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for example, or is under the gun for a big project deadline and won’t likely be responsive this week unless it’s critical. Communicate decisions large and small. E-mail, scheduled phone calls—figure out what works for your situation, and make a commitment to follow whatever protocol you mutually agree is best.

Remember time zones It’s simple, but easy to forget. Suppose you’re based at your company’s headquarters in New York and you have a remote colleague in Paris. You might not dive into your day until 9 a.m. your time—and that’s 3 p.m. for the guy in France. So you’ve got about two hours of reliable overlap. If multiple people in New York want time from him, those two hours will be packed. You’re sharing that window with others, so be thoughtful about what you’re asking for during that time. And respect your remote colleagues’ after-hours time. When I was working in Paris for a company with a New York headquarters, I regularly fielded calls at 11 at night—5 p.m. EST. People forgot to call me until it became urgent at the end of their day to finish something. Set up reminders in your calendar to get in touch with remote colleagues while they’re still on the clock, and don’t ask them to join late calls if you can easily brief them the next day. Be clear about which meetings they can skip. They’ll be much happier to take an occasional urgent call at 11 p.m. if most of your business is conducted at times that suit you both. When you can, take advantage of time differences. As a manager, I loved assigning work to someone in an ear-

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lier time zone because when I came in the next morning, it would be in my inbox, ready for my attention.

Use technology to collaborate Technology makes it easy to work with remote colleagues or partners. All it takes is a laptop to videoconference— you can bring it into any room and include someone in a meeting. With Google Docs, you and colleagues located elsewhere can simultaneously work on a file and watch one another’s color-coded edits or comments appear in real time. Dropbox allows you to work on documents and then post them in a secure, cloud-based system others can easily access through the Internet. Some companies, like Nokia, rely on instant messaging to keep remote (and local) employees in the loop. Others, like Royal Dutch Shell, host online events to get colleagues comfortable collaborating across time zones and geographical boundaries. (Shell conducted a threeday “jam” that brought together 8,200 employees from 117 countries to develop new ways to use technology to work with each other.) There’s no need for someone in a satellite office to feel remote if you take advantage of the tools that are readily available to companies of all sizes.

If You’re the Remote Colleague . . . Make sure you’re up to the challenge— and take responsibility To integrate with a team that’s located somewhere else, you have to be fearless about picking up the phone, asking to be briefed, and telling people when conference

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calls won’t work in your time zone. You have to keep on top of a schedule when no one is around to remind you of important meetings or events. Self-starters required. Make it clear to people that you’re present, intellectually and physically, and dedicated to packing a lot into your day. When you speak up in a conversation, participate in a brainstorming session, or respond to an e-mail query, make sure it’s a thoughtful contribution—not just a token gesture to prove that you’re paying attention. Think about your colleagues and their projects and challenges, even when you’re not being asked to do so. One of the most successful remote employees I’ve ever managed would periodically come back from an inspiring business lunch with a great connection for another colleague or send a link to a thought-provoking article that might aid a peer. She felt like a part of a team that way, not just someone covering a different territory. Even after you’ve established positive relationships and earned your colleagues’ trust, recognize that the burden is often on you, the remote employee, to make things work. Show your colleagues what you bring to the table. Volunteer to help with projects when you have relevant ideas or expertise. Follow social media buzz on your company or industry—and then share updates with colleagues. If you always think of yourself as part of a team, not a soloist, you’ll naturally consider how your work can help others.

Partner with the home office Work closely with the home office to establish expectations. Should you match your colleagues’ hours? Is it OK 120

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to be out for appointments without telling your manager? What matters more—being available or being entrepreneurial? And so on. Actually ask those questions; don’t just assume you know the answers. Without that information, you might get paranoid that you’re seen as a slacker or actually not doing enough—and way, way overcompensate. Develop and maintain your network. Justin Mass, a senior learning technologist at Adobe, volunteers for crossfunctional projects that increase his exposure to his HQ colleagues. He’s worked to become known as a guy who raises his hand before being asked, and that’s helped him create strong connections throughout the company. If possible, have your company occasionally fly you to HQ or other key offices. Fill your time with meetings— breakfast, lunch, and dinner—to build relationships. Ask people about themselves and their work—you can glean a lot about what’s going on in the organization and where the opportunities are. (Keep it professional, of course. This isn’t the time to have a few too many beers or complain about your manager.) You’ll be exhausted after all these meetings, but you’ll have made the most of your short amount of time onsite. If you’re a new hire, you’ll need to build a foundation: Ask for a visit to the home office to put names to faces, get a sense of the culture in the building, and get face time by attending a meeting or two. But not too soon! For your first few months on the job, you’ll be learning many things, so time your visit (if you can make just one) for when you’re in a position of having good questions to ask, not just passively absorbing information. When you do make your trip,

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introduce yourself to people you’ll need to interact with. Find out from team members who else you should reach out to, and ask if they’d be willing to help you connect. It’s virtually impossible to navigate a company’s spoken and unspoken “rules” without a guide. You can’t simply assume that the culture is casual because, say, dogs are allowed in the office on Fridays. That same company might be rigid about protocol. It takes a little digging to figure out which people in the organization get things done. Have someone in the know walk you through the org chart and explain the company’s circles of influence to you. Ask pointed questions: Who is the right contact for that group? What works best here—e-mail, phone calls, or IM? Are there informal power brokers I should make contact with? That kind of thing.

Start Skyping Adobe’s Mass is the only member of his team who works entirely from a home office, yet he collaborates with colleagues in California and India every day. Videoconferencing has been critical to his success. Every chance to be seen on video, he says, is a chance to improve your visibility with your team. You become more than a disembodied voice. While his company has installed high-end video technology in his home office, he notes that Skype, which is free to anyone, also does the job. Of course, being visible also makes you more accountable. “I think of every video meeting as an opportunity for my team to see me in action,” Mass says. “I have to bring my A game.”

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He actually thinks like a movie director shooting a scene when he considers how he’s going to be perceived by his colleagues on the other end of the camera. He dresses professionally and keeps his desk clean. He’s even painted his walls the same neutral manila as those at headquarters so his workspace doesn’t “look like some strange foreign office.” He makes a point to sit forward in his chair, engaged, as if he were at the same conference table. He looks at the camera. Never pushes the mute button and just listens in. Never multitasks. Mass’s advice for others wanting to make videoconferencing work? Do a trial video chat with a friend. Study the thumbnail image of yourself on screen, and ask your friend for feedback. “See how your colleagues will see you,” he says. “What’s in the background? How are you showing yourself? Are you slumping in your chair? Are you taking notes?” If your colleagues aren’t ready for Skype, be thoughtful about the conference call. Ask your manager what’s expected of you (Am I just getting briefed? Am I part of the brainstorming team? Do you need me to report on what I’ve been up to?). Once I was caught off guard on a conference call by a manager asking us each to “go around the horn” and give updates. What he really meant was, “If there’s anything of burning importance, now’s your chance.” But absent any body language or other visual cues to put his request in context, I panicked and assumed I needed to show how productive I’d been. When I finished my monologue, a few long minutes later, it was obvious I’d gotten it wrong, and we swiftly moved on to

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other topics. If you don’t have a chance to clarify expectations in advance, it may be better to listen quietly and then contribute follow-up thoughts by e-mail or phone. Ask your manager to occasionally put you on the agenda to discuss what you’re working on, share your observations, or report on a project.

Since remote colleagues and partners are likely to be a permanent feature of any growing company, it’s important to manage these relationships well. And it’s worth the effort. If you’re a hiring manager, who says the right person for the job you’ve posted lives within driving distance? And if you’re a remote worker, you can get a lot of work done, in fewer hours than your HQ colleagues, if you use your time wisely. It’s possible to make off-site work relationships both productive and powerful—I’ve found that some of my remote colleagues over the years have been great allies and sounding boards. But the key to success, on both sides of the relationship, is utter transparency and thinking ahead about what your colleagues most need from you.

Karen Dillon is the former editor of Harvard Business Review and a coauthor, with Clayton Christensen and James Allworth, of the book How Will You Measure Your Life? (HarperBusiness, 2012).

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A Smarter Way to Network A summary of the full-length HBR article by Rob Cross and Robert Thomas, highlighting key ideas.

THE IDEA IN BRIEF To maximize your and your team’s performance, you need resources, information, and expertise from people across your organization. They don’t report to you, but they can make—or break—your project. So you must influence them. How? Build a better network, using these steps:

1. Analyze: Identify the benefits each of your existing network connections now provides. Does one person give you valuable information? Does another have expertise you need but lack? Reprint #R1107P

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2. De-layer: Weed out connections that aren’t helping you, such as people who burn too much of your time. 3. Diversify: Fill the fresh openings in your network with people who can deliver the additional benefits you and your team need to accomplish your work. Construct a strong network, and you’ll have a wider, richer web of connections to draw on when the next crisis or opportunity lands on your desk.

THE IDEA IN PRACTICE When you need help from colleagues up, down, and across the organization, every network choice you make matters. Use these steps to make your selections:

1. Analyze Identify the individuals currently in your network. Determine: • Where they’re located. Are they on your team? In your unit? Outside your organization? Are they higher-ups? Peers? Frontline workers? You want a diverse but select web of high-quality relationships with people who hail from several different spheres and levels in your organization. • What benefits they’re providing. Do they offer information, expertise, or best practices that can 126

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help you lead projects more effectively? Are they formally powerful people who can provide political “juice”? For instance, can they remind lazy members of a task force you’re on how important their project is to the organization? Are they informally influential people who can win you needed support among the rank-and-file?

2. De-layer Make tough decisions about relationships to back away from. Eliminate or minimize contact with people who sap your energy or offer benefits that others in your network already provide. By de-layering, you make room for people who can help you complete projects.

3. Diversify Fill the new openings in your network with the right people, using this technique: • Articulate three business goals you plan to achieve this year. • List the people who could help you reach these goals—and how. Is it their expertise? Their control over resources? Their political support? • Actively build relationships with these individuals. Example: Joe, an investment banker, needed to expand his global client pool. First he identified counterparts in his company’s Asian and European operations who had relationships with clients he had targeted. Then he scheduled

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regular calls with his colleagues to synchronize their selling efforts. In some cases, these calls helped him identify opportunities he could pitch proactively, such as potential clients who were interested in his department’s offerings. In others, the calls helped him and his peers appear more coordinated when their bank was competing against other banks for the same clients. One of the happiest, most successful executives we know is a woman named Deb. She works at a major technology company and runs a global business unit that has more than 7,000 employees. When you ask her how she rose to the top and why she enjoys her job, her answer is simple: people. She points to her boss, the CEO, a mentor who “always has her back”; Steve, the head of a complementary business, with whom she has monthly brainstorming lunches and occasional gripe sessions; and Tom, a protégé to whom she has delegated responsibility for a large portion of her division. Outside the company, Deb’s circle includes her counterparts in three strategic partnerships, who inspire her with new ideas; Sheila, a former colleague, now in a different industry, who gives her candid feedback; and her husband, Bob, an executive at a philanthropic organization. She also has close relationships with her fellow volunteers in a program for at-risk high school students and the members of her tennis group and book club. This is Deb’s social network (the real-world kind, not the virtual kind), and it has helped her career a lot. But not because the group is large or full of high-powered 128

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contacts. Her network is effective because it both supports and challenges her. Deb’s relationships help her gain influence, broaden her expertise, learn new skills, and find purpose and balance. Deb values and nurtures them. “Make friends so that you have friends when you need friends” is her motto. “My current role is really a product of a relationship I formed over a decade ago that came back to me at the right time,” she explains. “People may chalk it up to luck, but I think more often than not luck happens through networks where people give first and are authentic in all they do.” Over the past 15 years, we’ve worked with many executives like Deb, at more than 300 companies. What began as organizational research—helping management teams understand and capitalize on the formal and informal social networks of their employees—has since metamorphosed into personal programs, which teach individual executives to increase their effectiveness by leveraging their networks. The old adage “It’s not what you know, it’s who you know” is true. But it’s more nuanced than that. In spite of what most self-help books say, network size doesn’t usually matter. In fact, we’ve found that individuals who simply know a lot of people are less likely to achieve standout performance, because they’re spread too thin. Political animals with lots of connections to corporate and industry leaders don’t win the day, either. Yes, it’s important to know powerful people, but if they account for too much of your network, your peers and subordinates often perceive you to be overly self-interested, and you may lose support as a result. The data we’ve collected point to a different model 129

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for networking. The executives who consistently rank in the top 20% of their companies in both performance and well-being have diverse but select networks like Deb’s—made up of high-quality relationships with people who come from several different spheres and from up and down the corporate hierarchy. These high performers, we have found, tap into six critical kinds of connections, which enhance their careers and lives in a variety of ways. Through our work advising individual managers, we’ve also identified a four-step process that will help any executive develop this kind of network. But first, let’s take a look at some common networking mistakes.

Getting It Wrong Many people take a misguided approach to networking. They go astray by building imbalanced networks, pursuing the wrong kind of relationships, or leveraging relationships ineffectively. (See the sidebar “Are You Networking Impaired?”) These people might remain successful for a time, but often they will hit a plateau or see their career derailed because their networks couldn’t prompt or support a critical transition. Consider Dan, the chief information officer of one of the world’s largest life-sciences organizations. He was under constant pressure to find new technologies that would spur innovation and speed the drug commercialization process at his company, and he needed a network that would help him. Unfortunately, more than 70% of his trusted advisers were in the unit he had worked in before becoming CIO. Not only did they reinforce his bias

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toward certain solutions and vendors, but they lacked the outside knowledge he needed. “I had started to mistake friendship, trust, and accessibility for real expertise in new domains,” he told us. “This didn’t mean I was going to dump these people, as they played important roles for me in other ways. But I needed to be more targeted in who I let influence my thinking.” Another overarching mistake we often see in executives’ networks is an imbalance between connections that promote career advancement and those that promote engagement and satisfaction. Numerous studies have shown that happier executives are higher-performing ones. Take Tim, the director of a large practice area at a leading professional services firm. On the surface he was doing well, but job stress had taken its toll. He was 40 pounds overweight, with alarmingly high cholesterol and blood sugar levels, and prone to extreme mood swings. When things went well at work, he was happy; when they didn’t, he wasn’t pleasant to be around. In fact, Tim’s wife finally broke down and told him she thought he had become a career-obsessed jerk and needed to get other interests. With her encouragement, he joined Habitat for Humanity and started rowing with their daughter. As a result, his social network expanded to include people with different perspectives and values, who helped him focus on more healthful and fulfilling pursuits. “As I spent more time with different groups, what I cared about diversified,” he says. “Physically, I’m in much better shape and probably staved off a heart attack. But I think I’m a better leader, too, in that I think about problems more broadly, and I’m more resilient. Our peer feedback systems are

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ARE YOU NETWORKING IMPAIRED? In our work, we have identified six common managerial types who get stuck in three kinds of network traps. Do any of the descriptions below fit you? The wrong structure THE FORMALIST focuses too heavily on his company’s

official hierarchy, missing out on the efficiencies and opportunities that come from informal connections. THE OVERLOADED MANAGER has so much contact with

colleagues and external ties that she becomes a bottleneck to progress and burns herself out.

The wrong relationships THE DISCONNECTED EXPERT sticks with people who

keep him focused on safe, existing competencies,

also clearly indicating that people are more committed to the new me.”

Getting It Right To understand more about what makes an effective network, let’s look again at Deb. She has a small set of core contacts—14 people she really relies on. Effective core networks typically range in size from 12 to 18 people. But what really matters is structure: Core connections must

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rather than those who push him to build new skills. THE BIASED LEADER relies on advisers much like herself

(same functional background, location, or values), who reinforce her biases, when she should instead seek outsiders to prompt more fully informed decisions. The wrong behavior THE SUPERFICIAL NETWORKER engages in surface-level

interaction with as many people as possible, mistakenly believing that a bigger network is a better one. THE CHAMELEON changes his interests, values, and

personality to match those of whatever subgroup is his audience, and winds up being disconnected from every group.

bridge smaller, more-diverse kinds of groups and cross hierarchical, organizational, functional, and geographic lines. Core relationships should result in more learning, less bias in decision making, and greater personal growth and balance. The people in your inner circle should also model positive behaviors, because if those around you are enthusiastic, authentic, and generous, you will be, too. More specifically, our data show that high performers have strong ties to:

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1. people who offer them new information or expertise, including internal or external clients, who increase their market awareness; peers in other functions, divisions, or geographies, who share best practices; and contacts in other industries, who inspire innovation; 2. formally powerful people, who provide mentoring, sense-making, political support, and resources; and informally powerful people, who offer influence, help coordinating projects, and support among the rank and file; and 3. people who give them developmental feedback, challenge their decisions, and push them to be better. At an early career stage, an employee might get this from a boss or customers; later, it tends to come from coaches, trusted colleagues, or a spouse. Meanwhile, the most satisfied executives have ties to:

1. people who provide personal support, such as colleagues who help them get back on track when they’re having a bad day or friends with whom they can just be themselves; 2. people who add a sense of purpose or worth, such as bosses and customers who validate their work, and family members and other stakeholders who show them work has a broader meaning; and

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3. people who promote their work/life balance, holding them accountable for activities that improve their physical health (such as sports), mental engagement (such as hobbies or educational classes), or spiritual well-being (music, religion, art, or volunteer work). How does one create such a varied network? We recommend a four-point action plan: analyze, de-layer, diversify, and capitalize.

Analyze Start by looking at the individuals in your network. Where are they located—are they within your team, your unit, or your company, or outside your organization? What benefits do your interactions with them provide? How energizing are those interactions? The last question is an important one. Energizers bring out the best in everyone around them, and our data show that having them in your network is a strong predictor of success over time. These people aren’t necessarily extroverted or charismatic. They’re people who always see opportunities, even in challenging situations, and create room for others to meaningfully contribute. Good energizers are trustworthy and committed to principles larger than their self-interest, and they enjoy other people. “De-energizers,” by contrast, are quick to point out obstacles, critique people rather than ideas, are inflexible in their thinking, fail to create opportunities, miss commitments, and don’t show concern for others.

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FOUR STEPS TO BUILDING A BETTER NETWORK Analyze • Identify the people in your network and what you get out of interacting with them De-layer • Make some hard decisions to back away from redundant and energy-sapping relationships Diversify • Build your network out with the right kind of people: energizers who will help you achieve your goals Capitalize • Make sure you’re using your contacts as effectively as you can

Unfortunately, energy-sapping interactions have more impact than energizing ones—up to seven times as much, according to one study. And our own research suggests that roughly 90% of anxiety at work is created by 5% of one’s network—the people who sap energy. Next, classify your relationships by the benefits they provide. Generally, benefits fall into one of six basic categories: information, political support and influence, personal development, personal support and energy, a sense of purpose or worth, and work/life balance. It’s im-

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portant to have people who provide each kind of benefit in your network. Categorizing your relationships will give you a clearer idea of whether your network is extending your abilities or keeping you stuck. You’ll see where you have holes and redundancies and which people you depend on too much—or not enough. Let’s use Joe, a rising star in an investment bank, as a case study. He had 24 close advisers—on the surface, a more than healthy number. But many of the people he relied on were from his own department and frequently relied on one another. If he eliminated those redundancies, his network shrank to five people. After giving it some thought and observing his peers’ networks, he realized he was missing links with several important types of people: colleagues focused on financial offerings outside his own products, who could help him deliver broader financial solutions to customers; coworkers in different geographies— particularly London and Asia—who could enhance his ability to sell to global clients; and board-level relationships at key accounts, who could make client introductions and influence purchasing decisions. His insularity was limiting his options and hurting his chances of promotion to managing director. He realized he would need to focus on cultivating a network rather than allowing it to organically arise from the day-to-day demands of his work.

De-layer Once you’ve analyzed your network, you need to make some hard decisions about which relationships to back away from. First, look at eliminating or minimizing contact with people who sap you of energy or promote

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unhealthful behaviors. You can do this by reshaping your role to avoid them, devoting less time to them, working to change their behavior, or reframing your reactions so that you don’t dwell on the interactions. John, an academic, realized that two university administrators in his network were causing him a great deal of anxiety. This had so soured his view of his school that he was considering leaving. He therefore decided to devote less time to projects and committees that would involve the negative contacts and to avoid dwelling on any sniping comments they subjected him to. Within a year he was much more productive and happy. “By shifting my role and how I reacted to the idiots, I turned a negative situation around,” John says. “In hindsight it was an obvious move—rather than leave a place I loved—but emotions can spiral on you in ways you don’t recognize.” The next step is to ask yourself which of the six categories have too many people in them. Early-stage leaders, for example, tend to focus too much on information and not enough on personal development and might want to shed some of the contacts who give them the former to make more time for those who give them the latter. Beyond this, consider which individuals—and types of people as determined by function, hierarchy, or geography—have too much of you, and why. Is the cause structural, in that work procedures require you to be involved? Or is your own behavior causing the imbalance? What can you change to rectify the situation? Too often we see leaders fail because they accept or create too many collaborative demands. Paul, the head of research in a consumer products company, had a network of almost 70 people just at work. 138

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But he got many complaints from people who said they needed greater access to him. His productivity, and his unit’s, was suffering. When he analyzed his network, he realized that he was missing “people and initiatives one or two levels out.” To address this, he decided to delegate— stepping away from interactions that didn’t require his presence and cultivating “go to” stand-ins in certain areas of expertise. He also changed his leadership style from extraordinarily accessible to helpful but more removed, which encouraged subordinates to solve their own problems by connecting with people around him. “As a leader you can find yourself in this bubble of activity where you feel like a lot is happening moving from meeting to meeting,” Paul says. “You can actually start to thrive on this in some ways. I had to move past this for us to be effective as a unit and so that I could be more forward-thinking.”

Diversify Now that you’ve created room in your network, you need to fill it with the right people. Simple tools like work sheets can help you get started. For example, you might make a list of the six categories of relationships and think about colleagues who could fill the holes you have in each. Remember to focus on positive, energetic, selfless people, and be sure to ask people inside and outside your network for recommendations. You should also think about how you could connect your network to your professional and personal goals. Here’s another simple exercise: Write down three specific business results you hope to achieve over the next year (such as doubling sales or winning an Asia-based client) and then list the people (by name or general role) who 139

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could help you with them, thanks to their expertise, control over resources, or ability to provide political support. Joe, the investment banker, identified counterparts in the Asian and European operations of his company who had relationships with the clients he was focused on and then scheduled regular calls with them to coordinate efforts. “In a couple of cases this helped me identify opportunities I could pitch proactively. In others it just helped us appear more coordinated when we were competing against other banks,” he says. One of the big challenges for Paul, the consumer products executive, was managing a new facility and line of innovation in China. Because none of his trusted advisers had ever even been to that country, he reached out to the head of R&D at a major life-sciences organization that had undertaken a similar effort.

Capitalize Last, make sure you’re using your contacts as effectively as you can. Are there people you rely on in one sphere, such as political support, that you could also use to fill a need in another, such as personal development? Could you get more out of some relationships if you put more energy into them? Our research shows, for instance, that high performers at all levels tend to use their information contacts to gain other benefits, such as new ideas. Reciprocal relationships also tend to be more fruitful; the most successful leaders always look for ways to give more to their contacts. Alan, a top executive at a global insurance company, realized that although he had a good network, he was still making decisions in relative isolation. He failed to

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elicit insights from others and, as a result, wasn’t making enough progress toward his goals. So he started inviting his more-junior contacts, who were informal opinion leaders in his company, to lunch and asking them open-ended questions. These conversations led him to streamline decision making and uncover innovation deep within the firm’s hierarchy. “When I met with one lady, I was stunned at a great new product idea she had been pushing for months,” Alan says. “But she hadn’t been able to get the right people to listen. I was able to step in and help make things happen. To me the right way to be tapping into people is in this exploratory way— whether it is about strategic insights or just how they think I’m doing on some aspect of my job. That’s how I get to new ways of thinking and doing things, and I know it makes me much more effective than people who are smarter than me.” A network constructed using this four-point model will build on itself over time. In due course, it will ensure that the best opportunities, ideas, and talent come your way.

Rob Cross ([email protected]) is an associate professor at the University of Virginia’s McIntire School of Commerce. Robert Thomas is the executive director of the Accenture Institute for High Performance.

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How to Deal with Office Politics by Linda A. Hill and Kent Lineback

“I don’t care who they are. I won’t buddy up to people I don’t like and respect just because I want something from them.” These are the words of a Fortune 500 senior manager, but we hear similar comments from managers at all levels, in all types of companies. Perhaps you feel the same way. Do you dismiss most of the give-and-take in organizations as “office politics”—ego-driven, manipulative, dysfunctional game playing? Do you tend to focus on your own group and deal with others only when you like them personally or the immediate work requires it? If this describes your approach, you’re probably making yourself and your group less effective than you should be. Every organization has a political environment—that is, one where human relationships matter—and yours is no exception. To obtain the resources, influence, and atAdapted from content posted on hbr.org on November 2, 2011

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tention you and your group need, you must be able to function in such a setting by actively engaging others, whether you like them or not. The good news: You can do that without succumbing to mean and self-interested tactics. The secret is to build ongoing relationships for mutual advantage. Here’s how to navigate your political environment positively and professionally: • Focus on the good of the enterprise. A big-picture view will help you do what’s best for your group. Recognize your interdependence with other units, and consider how your goals and theirs align. If customer service reps say a forthcoming product will require a lot of extra support, get their input on ways to make it more user-friendly. They’ll be happier with fewer calls to answer, and you’ll have a better product to sell. You’ll become allies, without even a hint of schmoozing. And don’t be afraid to share customers with other divisions. It shows that you’re a team player—and your customers will appreciate the seamless service. • Keep disagreements professional. Focus on issues, not personalities. Suppose you work at an insurance company, for example, and people in the underwriting department resist your plan to offer a new type of homeowner’s policy. Assume they have legitimate concerns and try to understand and accommodate them. Accusing colleagues of “not knowing the market” or being “stuck in the last century” certainly won’t win them over or al-

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low you to find an approach that meets everyone’s needs. And complaining about them behind their backs will surely come back to bite you. • Share information. When it comes to information, you get what you give, and what you know depends on who you know. Say your IT director has just filled three positions that have been open for months. Alert your colleagues in product development so they can update their list of tech priorities. If you look for ways to make their lives easier, they’ll probably return the favor when they get an inside scoop that affects your work. • Relay good news about your team members. They’ll likely appreciate the public recognition, and it’ll help the rest of the organization see the value they add. Did your group finish a critical project early and under budget? Send an e-mail to managers you work with closely, and copy the individuals whose praises you’re singing. Don’t assume that everyone will automatically notice your group’s success. If you don’t mention it, who will? • Above all, focus your relationships on what’s best

for “us.” If you want an exception to your company’s pricing policy and need a colleague’s help, identify her goals and find a way you can support her and her group, too. And talk to her about what you want to achieve; perhaps there’s a way to serve both your purposes simultaneously. Let “connect and collaborate” be your mantra.

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We’re not saying that organizations are ideal worlds where everyone always wants the best for everyone else. They’re often maelstroms of conflicting goals, divergent interests, and fierce struggles for scarce resources. And organizational bullies do exist. They play games and pick fights. They define their success by the interpersonal battles they win, not the results they accomplish for the organization. How do you deal with them? Not by hiding. Bullies are actually a key reason not to withdraw to your own corner of the organization. You can counter their tactics with the help of allies. If someone spreads half-truths about you or quotes you or your people out of context, it’s much easier to set the record straight if you’ve developed influence through strong relationships. Raise the bar by conducting yourself according to standards that matter to you. Be honest, courteous, and dependable—no matter how others act. If you propose an idea that someone belittles, don’t retaliate by pointing out flaws in his idea. That just creates a poisonous atmosphere. Instead, try to get at what’s behind the aggressive behavior. Maybe that person feels threatened by you. Look for ways to lower his defenses—ask for his advice, invite him to brainstorming sessions, and so on. You may find that he’s suddenly more collaborative and less combative.

Linda A. Hill is the Wallace Brett Donham Professor of Business Administration and faculty chair of the Leader-

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ship Initiative at Harvard Business School. Now a writer and executive coach, Kent Lineback spent many years as a manager and an executive in business and government. They are the coauthors of Being the Boss: The 3 Imperatives for Becoming a Great Leader (Harvard Business Review Press, 2011).

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Make Your Enemies Your Allies by Brian Uzzi and Shannon Dunlap

John Clendenin was fresh out of business school in 1984 when he took on his first managerial position, in Xerox’s parts and supply division. He was an obvious outsider: young, African-American, and a former Marine, whose pink shirts and brown suits stood out amid the traditional gray and black attire of his new colleagues. “I was strikingly different,” he recalls. And yet his new role required him to lead a team including employees who had been with Xerox for decades. One of his direct reports was Tom Gunning, a 20-year company veteran who believed Clendenin’s job should have gone to him, not to a younger, nontechnical newcomer. Gunning also had a cadre of pals on the team. As a result, Clendenin’s first days were filled with strained Reprint #R1205K

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smiles and behind-the-back murmurs. Though he wasn’t looking for adversaries, “I knew these guys were discontented about me coming in,” Clendenin remembers. He was right to be wary. Anyone who has faced a rival at work—a colleague threatened by your skills, a superior unwilling to acknowledge your good ideas, or a subordinate who undermines you—knows such dynamics can prove catastrophic for your career, and for your group or organization. When those with formal or informal power are fighting you, you may find it impossible to accomplish—or get credit for—any meaningful work. And even if you have the upper hand, an antagonistic relationship inevitably casts a cloud over you and your team, sapping energy, stymieing progress, and distracting group members from their goals. Because rivalries can be so destructive, it’s not enough to simply ignore, sidestep, or attempt to contain them. Instead, effective leaders turn rivals into collaborators— strengthening their positions, their networks, and their careers in the process. Think of these relationships not as chronic illnesses you have to endure but as wounds that must be treated in order for you to lead a healthy work life. Here we share a method, called the 3Rs, for efficiently and effectively turning your adversaries into your allies. If you execute each step correctly, you will develop new “connective tissue” within your organization, boosting your ability to broker knowledge and drive fresh thinking. The method is drawn from our own inductive case studies—including interviews with business leaders such as John Clendenin, who agreed to let us tell his story in this article—and from empirical research conducted

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Make Your Enemies Your Allies

by Brian and others investigating the physiology of the brain, the sociology of relationships, and the psychology of influence.

Emotions and Trust Many well-intentioned efforts to reverse rivalries fail in large part because of the complex way trust operates in these relationships. Research shows that trust is based on both reason and emotion. If the emotional orientation toward a person is negative—typically because of a perceived threat—then reason will be twisted to align with those negative feelings. This is why feuds can stalemate trust: New facts and arguments, no matter how credible and logical, may be seen as ploys to dupe the other side. This effect is not just psychological; it is physiological. When we experience negative emotions, blood recedes from the thinking part of the brain, the cerebral cortex, and rushes to its oldest and most involuntary part, the “reptilian” stem, crippling the intake of new information. Most executives who decide they want to reverse a rivalry will, quite understandably, turn to reason, presenting incentives for trustworthy collaboration. But in these situations, the “emotional brain” must be managed before adversaries can understand evidence and be persuaded. When John Clendenin looked at Tom Gunning at Xerox, he immediately saw grounds for a strong partnership beyond a perfunctory subordinate-superior relationship. Gunning had 20 years’ worth of organizational and technical knowledge, and contacts around the company, but he lacked the leadership skills and vision that Clendenin possessed. Conversely, Clendenin understood management but

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needed Gunning’s expertise and connections to successfully navigate his new company. Unfortunately, Gunning’s emotions were getting in the way. Clendenin needed to employ the 3Rs.

Redirection Step 1 is to redirect your rival’s negative emotions so that they are channeled away from you. Clendenin decided to have a one-on-one meeting with Gunning, but not in his office, because that would only remind Gunning of the promotion he’d lost. Instead, he found out where Gunning liked to eat and took him there for lunch. “I was letting him know that I understood his worth,” Clendenin says of this contextual redirection. He followed this with a plain statement of redirection, telling Gunning that a third entity beyond the control of both men was the root cause of their situation. “I didn’t put you in this position,” Clendenin said. “Xerox put us both in this position.” Many executives scoff when they first hear this story, believing Clendenin’s actions to be too transparent. But redirection doesn’t have to be hidden. With stage magic, for example, audience members understand that redirection is happening, but that doesn’t lessen their acceptance or spoil the payoff of the technique. Other personal interactions work similarly. For instance, we accept flattery even if we recognize it as such. Another common redirection tactic is to introduce a discussion of things you and your rival have in common, or casually portray a source of tension—a particular initiative, employee, or event—in a more favorable light. It sounds

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obvious. But redirection will shift negative emotions away from you and lay the groundwork for Step 2: reciprocity.

Reciprocity The essential principle here is to give before you ask. Undoing a negative tie begins with giving up something of value rather than asking for a “fair trade.” If you give and then ask for something right away in return, you don’t establish a relationship; you carry out a transaction. When done correctly, reciprocity is like priming the pump. In the old days, pumps required lots of exertion to produce any water. You had to repeatedly work a lever to eliminate a vacuum in the line before water could flow. But if you poured a small bucket of water into the line first, the vacuum was quickly eliminated, enabling the water to flow with less effort. Reciprocity with a rival works in much the same way. Reflect carefully on what you should give and, ideally, choose something that requires little effort from the other party to reciprocate. Clendenin moved from redirection to reciprocity at the lunch by promising to support Gunning’s leadership development and future advancement at Xerox. But, recognizing that mere promises of future returns wouldn’t be enough to spark collaboration, he also offered Gunning something concrete: the chance to attend executive-level meetings. This was of immediate value, not a distant, murky benefit. Gunning could gain visibility, credibility, and connections. The arrangement also ensured reciprocity. Gunning’s presence at the meetings furnished Clendenin with onhand technical expertise and organizational knowledge

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while giving him “reputation points” with Gunning’s contacts. Thus, his offer created the purest form of reciprocity; if Gunning attended the meetings, Clendenin would never have to explicitly request a quid pro quo. Reciprocity involves considering ways that you can immediately fulfill a rival’s need or reduce a pain point. Live up to your end of the bargain first, but figure out a way to ensure a return from your rival without the person’s feeling that pressure. Another example comes from Brian’s colleague Adam Galinsky, who advises leaders in contentious restructurings and business closings to generate goodwill among outgoing employees by offering professional references or placements at other companies as long as the employees continue to meet or exceed expectations until their office closes. The employees see immediate value, and although they don’t consciously pay back the organization, the firm nonetheless benefits by maintaining continuity in its workforce until the scheduled closure. Similarly, a colleague who helps an adversary complete a project, or a subordinate who stays overtime to finish a task for a difficult boss, not only helps that individual but can reap rewards when other teammates or superiors benefit from that effort, too. Here the judicious giving before asking sets a foundation for reciprocity with third parties, whose buy-in can positively assist in reshaping the adversarial relationship. (See the sidebar “Rivalries Don’t Exist in a Vacuum.”)

Rationality Step 3, rationality, establishes the expectations of the fledgling relationship you’ve built using the previous

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RIVALRIES DON’T EXIST IN A VACUUM Even when a leader executes the 3Rs flawlessly to end a rivalry, his work isn’t necessarily done. That’s because the relationship is often about more than just the two individuals. We all know people who seek to play to their advantage antagonism between others; some third parties might even view a blossoming partnership with trepidation or envy, triggering new negative emotions and rivalries. You can head off this problem, as Clendenin did, by framing your work as beneficial not just to you and your adversary but to the whole organization, which makes the reversal of rivalry in everyone’s interest. When Clendenin brought Gunning into those executive-level meetings, he made it clear that Gunning was going to be a “poster child” for a new age at Xerox, in which talented, long-term employees could find new paths to leadership in a time of corporate transition. Even if the conflictmongers didn’t care about Clendenin’s and Gunning’s success, it would be far more difficult for them to sabotage an effort that was obviously good for the company.

steps so that your efforts don’t come off as dishonest or as ineffective pandering. What would have happened if Clendenin had left the lunch without explaining how he wanted to work with Gunning going forward? Gunning might have begun to second-guess his new boss’s

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intentions and resumed his adversarial stance. If a rival is worried about the other shoe’s dropping, his emotional unease can undermine the trust you’ve built. To employ rationality, Clendenin told Gunning that he needed him, or someone like him, to reach his goals at Xerox. This made it clear that he saw Gunning as a valuable, but not indispensable, partner. Another, softer approach might have involved Clendenin’s giving Gunning “the right of first refusal” to collaborate with him, making the offer seem special while judiciously indicating that there were others who could step in. Just to be clear, Clendenin was not asking Gunning for a specific favor in exchange for the one he’d granted in Step 2. He was simply saying that he wanted him to become an ally. Clendenin also reinforced the connection between the three steps by making his offer time-limited, which raised the perception of the value of the deal without changing its content. He told Gunning he needed an answer before they left the restaurant. “I needed to nip this in the bud,” Clendenin recalls. “He knew I didn’t care if we sat in that restaurant until midnight if we had to.” When rationality follows redirection and reciprocity, it should push your adversary into considering the situation from a reasoned standpoint, fully comprehending the expectations and benefits, and recognizing that he is looking at a valued opportunity that could be lost. Most people are highly motivated to avoid a loss, which complements their desire to gain something. Rationality is like offering medicine after a spoonful of sugar: It ensures that you’re getting the benefit of the shifted negative emotions, and any growing positive ones, which would otherwise diffuse over time.

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And it avoids the ambiguity that clouds expectations and feedback when flattery and favors come one day, and demands the next. Of course, Clendenin and Gunning did not walk out of the restaurant as full-blown collaborators. But both accepted that they should give each other the benefit of the doubt. Over the following weeks, this new mind-set allowed them to work as allies, a process that deepened trust and resource-sharing in a self-reinforcing cycle. So a potentially debilitating rivalry was transformed into a healthy working relationship and, in time, a strong partnership. Several years later, when Clendenin moved to another Xerox unit, he nominated Gunning as his replacement—and Gunning excelled in the position. The foundation for that remarkable shift had been established during the span of a single lunch.

Adapting the 3Rs A key advantage of the 3Rs is that the method can work to reverse all kinds of rivalries, including those with a peer or a superior. Later in Clendenin’s tenure at Xerox, he noticed an inefficiency in the company’s inventory systems. At the time, Xerox was made up of semiautonomous international units that stockpiled excess inventory to avoid shortages. Clendenin proposed that the units instead share their inventories through an intrafirm network that would improve resource use and lower carrying costs for the company as a whole. Although the idea was objectively good for Xerox, it threatened the power of some unit vice presidents, so when Clendenin floated his idea, they shot it down.

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WHAT IF THE 3RS FAIL? The 3Rs are effective, but they aren’t a guarantee. What should you do if the strategy isn’t working? Strive for collaboration indirectly—for example, by working well with a third party whom your rival trusts. A common ally can highlight to him the benefits of working with you. Remember that timing matters. People in power need a reason to interact. This was certainly the case with John Clendenin’s inventory-management pitch to the Xerox VPs: At first rebuffed, he was able to refloat his idea when the CEO called for a new strategy. Recognize when to look elsewhere. Sometimes the effort needed to reverse a rivalry is so great, and the returns so low, for you and your company that you’re better off deploying the same resources in another relationship.

A short time later, however, following an unexpected announcement by the CEO that the company needed better asset management, Clendenin found a way to reintroduce his proposal to the VPs. Because he knew they viewed him as an unwelcome challenger—or rival—he used the 3Rs. His first move was to redirect their negative emotions away from him by planning a lunch for them at the regional office and serving them himself. This showed deference. He

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also presented himself not as an individual pushing a proposal but as someone who could expedite organizational change, shifting the reference point of his rivals’ tension. “With all of those egos and personalities, I never said, ‘This is my idea,’” Clendenin recalls. “I always said ‘we.’” Applying the reciprocity principle of give before you ask, he requested nothing from them at the meeting. Instead, he facilitated a discussion about the CEO-led initiative. Inventory management was, unsurprisingly, a problem cited by many of the VPs, and Clendenin’s facilitation brought that to light. He then took on the luster of the person who had illuminated a generic problem, rather than someone who wanted to lessen the VPs’ autonomy. That allowed him to present the rationality of his original idea. All of a sudden, it looked like an opportunity, rather than a threat, to the formerly antagonistic group. Clendenin indicated that he would be willing to coordinate a new system more cheaply than anyone else in the market could offer, while also noting that he might not have time to do so in the future, which raised the perceived value of his offer. The VPs agreed to execute the plan in stages and put Clendenin in charge. The initiative grew in small but steady steps, eventually saving Xerox millions. Equally important, Clendenin’s embrace by his rivals positioned him as a broker in the company and burnished his reputation as an institution builder. John Clendenin understood that rivalries help no one; indeed, success often depends on not just neutralizing your foes but turning them into collaborators. By using the 3Rs to build trust in his network, Clendenin made sure everyone in his network thrived—including himself, Gunning, their

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team, the VPs, and Xerox—forming the basis for long-term ties and shared success. Years later, Clendenin started his own international logistics company. His partner in this new endeavor was his old rival, Tom Gunning, and the lead investors were none other than the unit VPs from Xerox who had once shot down his ideas.

Brian Uzzi is the Richard L. Thomas Professor of Leadership and Organizational Change at Northwestern’s Kellogg School of Management and the codirector of the Northwestern Institute on Complex Systems (NICO).

Shannon Dunlap is a journalist and writer based in New York City. The authors’ research was supported by grants from the National Science Foundation (OCI-0838564—VOSS) and the U.S. Army Research Laboratory’s Network Science Collaborative Technology Alliance (W911NF-09-2-0053).

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The Necessary Art of Persuasion A summary of the full-length HBR article by Jay A. Conger, highlighting key ideas.

THE IDEA IN BRIEF When you’re operating outside clear reporting lines, your colleagues may not immediately see why they should collaborate with you. That’s when your powers of persuasion come into play. It’s not manipulation. Effective persuasion is a learning and negotiating process for leading your colleagues to a shared solution to a problem.

Reprint #4258

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THE IDEA IN PRACTICE The process of persuasion has four steps: 1. Establish credibility. Your credibility grows out of two sources: expertise and relationships. If you have a history of well-informed, sound judgment, your colleagues will trust your expertise. If you’ve demonstrated that you can work in the best interest of others, your peers will have confidence in your relationships. If you’re weak on the expertise side, bolster your position by: • Learning more through formal and informal education—for example, conversations with in-house experts • Hiring recognized outside experts • Launching pilot projects Example: Two developers at Microsoft envisioned a controversial new software product, but both were technology novices. By working closely with technical experts and market testing a prototype, they persuaded management that the new product was ideally suited to the average computer user. It sold half a million units.

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To fill in the relationship gap, try: • Meeting one-on-one with key people • Involving like-minded coworkers who have good support with your audience

2. Frame goals on common ground. Tangibly describe the benefits of your position. The fastest way to get a child to the grocery store is to point out the lollipops by the cash register. That’s not deception—it’s persuasion. When no shared advantages are apparent, adjust your position. Example: An ad agency executive persuaded skeptical fast-food franchisees to support headquarters’ new price discounts. She cited reliable research showing how the pricing scheme improved franchisees’ profits. They supported the new plan unanimously.

3. Vividly reinforce your position. Ordinary evidence won’t do. Make numerical data more compelling with examples, stories, and metaphors that have an emotional impact. Example: The founder of Mary Kay Cosmetics made a speech comparing salespeople’s weekly meetings to gatherings among Christians resisting Roman rule. This drove home the importance of a mutually supportive sales

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force and imbued the work with a sense of heroic mission.

4. Connect emotionally. Adjust your own emotional tone to match your audience’s ability to receive your message. Learn how your colleagues have interpreted past events in the organization and sense how they will probably interpret your proposal. Test key individuals’ possible reactions. Example: A Chrysler team leader raised the morale of employees disheartened by foreign competition when he persuaded senior management to bring a new car design in-house. He showed both groups slides of his hometown, devastated by foreign mining competition. Dramatic images of his boarded-up high school and the town’s crumbling ironworks shone a sobering light on the aftereffects of outsourcing. His patriotic and emotional appeal resonated with his audiences.

Jay A. Conger is a professor of organizational behavior at the University of Southern California’s Marshall School of Business in Los Angeles, where he directs the Leadership Institute. He is the author of Winning ’Em Over: A New Model for Managing in the Age of Persuasion (Simon & Schuster, 2001).

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Three Ways Not to Persuade by Jay A. Conger

In my work with managers as a researcher and as a consultant, I’ve had the unfortunate opportunity to see executives fail miserably at persuasion. Here are three of the most common mistakes people make:

1. They attempt to make their case with an up-front, hard sell. I call this the John Wayne approach. Managers strongly state their position at the outset, and then through a process of persistence, logic, and exuberance, they try to push the idea to a close. In reality, setting out a strong position at the start of a persuasion effort gives potential opponents something to grab onto—and fight against. It’s far better

Excerpted from “The Necessary Art of Persuasion,” by Jay A. Conger, Harvard Business Review, February 2000 (product #4258)

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to present your position with the finesse and reserve of a lion tamer, who engages his “partner” by showing him the legs of a chair. In other words, effective persuaders don’t begin the process by giving their colleagues a clear target in which to set their jaws. 2. They resist compromise. Too many managers see compromise as surrender, but it is essential to constructive persuasion. Before people buy into a proposal, they want to see that the persuader is flexible enough to respond to their concerns. Compromises can often lead to better, more sustainable shared solutions. By not compromising, ineffective persuaders unconsciously send the message that they think persuasion is a one-way street. But persuasion is a process of give-and-take. Kathleen Reardon, a professor of organizational behavior at the University of Southern California, points out that a persuader rarely changes another person’s behavior or viewpoint without altering his or her own in the process. To persuade meaningfully, we must not only listen to others but also incorporate their perspectives into our own. 3. They assume persuasion is a one-shot effort. Persuasion is a process, not an event. Rarely, if ever, is it possible to arrive at a shared solution on the first try. More often than not, persuasion involves listening to people, testing a posi166

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tion, developing a new position that reflects input from the group, more testing, incorporating compromises, and then trying again. If this sounds like a slow and difficult process, that’s because it is. But the results are worth the effort.

Jay A. Conger is a professor of organizational behavior at the University of Southern California’s Marshall School of Business in Los Angeles, where he directs the Leadership Institute. He is the author of Winning ’Em Over: A New Model for Managing in the Age of Persuasion (Simon & Schuster, 2001).

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Harnessing the Science of Persuasion A summary of the full-length HBR article by Robert B. Cialdini, highlighting key ideas.

THE IDEA IN BRIEF Do you have it—the power to capture your audience, sway undecideds, convert opponents? In matrixed organizations, persuasion trumps formal power. It’s essential to getting things done through others. Persuasion works by appealing predictably to deeply rooted human needs. We can all learn to secure consensus, cut deals, win concessions—by artfully applying six scientific principles of winning friends and influencing people. Reprint #R0109D

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THE IDEA IN PRACTICE Persuasion Principles Principle

Example

Business Application

Liking:

At Tupperware parties, guests’ fondness for their host influences purchase decisions twice as much as regard for the products.

To influence people, win friends through:

People like those like them, who like them.

• Similarity: Create early bonds with new peers,bosses, and direct reports by informally discovering common interests—you’ll establish goodwill and trustworthiness. • Praise: Charm and disarm. Make positive remarks about others— you’ll generate more willing compliance.

Reciprocity:

People repay in kind.

Social Proof:

People follow the lead of similar others.

Consistency:

People fulfill written, public, and voluntary commitments.

When the Disabled American Veterans enclosed free personalized address labels in donation-request envelopes, response rate doubled.

Give what you want to receive. Lend a staff member to a colleague who needs help; you’ll get his help later.

More New York City residents tried returning a lost wallet after learning that other New Yorkers had tried.

Use peer power to

92% of residents of an apartment complex who signed a petition supporting a new recreation center later donated money to the cause.

Make others’ commitments active, public, and voluntary. If you

influence horizontally, not vertically; e.g., ask an esteemed “old timer” to support your new initiative if other veterans resist.

supervise an employee who should submit reports on time, get that understanding in writing (a memo); make the commitment public (note colleagues’ agreement with the memo); and link the commitment to the employee’s values (the impact of timely reports on team spirit).

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Authority:

People defer to experts who provide shortcuts to decisions requiring specialized information.

Scarcity:

People value what’s scarce.

A single New York Times expert-opinion news story aired on TV generates a 4% shift in U.S. public opinion.

Wholesale beef buyers’ orders jumped 600% when they alone received information on a possible beef shortage.

Don’t assume your expertise is self-evident. Instead, establish your expertise before doing business with new colleagues or partners; e.g., in conversations before an important meeting, describe how you solved a problem similar to the one on the agenda.

Use exclusive information to persuade. Influence and rivet key players’ attention by saying, for example: “…Just got this information today. It won’t be distributed until next week.”

Robert B. Cialdini is the Regents’ Professor of Psychology at Arizona State University and the author of Influence: Science and Practice (Allyn & Bacon, 2001). Further regularly updated information about the influence process can be found at http://www.influenceatwork.com/.

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How to Get Your Colleagues’ Attention by Amy Gallo

Do you have to personally escort colleagues to your project meetings to make sure they show up? Does every “urgent” e-mail require phone or face-to-face follow-up to get a timely response? Do you have to hound your marketing partners to prioritize your products when they’re launching new campaigns? These key tasks depend on your ability to frame your message—to make crystal clear what you need your colleagues to do, when, and, perhaps most important, why. When you frame your message effectively, your audience will immediately understand the issue at hand and why it deserves their attention. Here’s how to frame your message to get the results you want, whether you’re making a presentation, sending an e-mail, or talking in private with your boss:

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• Start with what you want. Busy colleagues don’t want to wait while you build to the punch line. Provide the most important information up front and ask for what you need. Example: “John, I need your advice about the product launch. I’ve gotten some new marketing data that may influence which message we lead with. I’ve come up with two alternatives, and I’d like your help deciding which to go with.” • Set the scene. Don’t dive too deep into details, but provide enough context so your audience can follow along. Example: “To refresh your memory, the event we have planned is a question-and-answer panel on how to connect with today’s modern moms. So far we’ve got five participants signed up to speak, including two CEOs of our top customers. Our goal is to reach as many marketers in the New York area as we can. We’ve sent out 2,500 invites and the initial response has been positive.” • Explain the complication. This is the specific reason for the meeting or your e-mail. What prompted you to deliver the message? Example: “As of today, the vendor is two weeks late with the prototypes. If there are further delays, we risk missing the deadline we set with

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the marketing team. We are somewhat stuck because the vendor knows we can’t start over at this point with someone new. We need to figure out how to motivate the vendor and adjust our schedule so we can meet marketing’s deadline.” • Connect to the big picture. Why should your audience care? Point out what is relevant to them and how it links to their broader goals. Example: “While eliminating the call checklist may seem like a small issue, it has important implications. It will encourage reps to engage with customers in a more informal way, which has been shown to increase customer satisfaction. This is a critical step toward meeting our unit’s goal of 65% customer retention.” • Make it memorable. People hear news and information all day. Give them something to latch on to such as a metaphor, a key statistic, or a sound bite. Example: “Our customers feel this is an urgent issue and have told us so repeatedly. The longer we wait to respond, the more it will seem that the house is on fire and we’re busy rearranging the furniture instead of calling 911.” • Refocus your audience’s attention. It’s easy for audiences to get distracted by secondary issues, so you must help them concentrate on the central objective. This is especially useful when you need

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to keep a large group on track or motivate people toward a common goal. Example: “Susan, I see that you’re concerned about getting the templates to design by our agreed-upon deadline. We need to make sure that happens. But let’s agree on the right approach first—to be sure we’re handing off a good product—and then we can work backwards to make sure we meet our deadlines.” • End with a call to action. Once you’ve set the context, reiterate what it is you need from your audience. Example: “Today I need to get your feedback on the presentation. I’d like to know specifically how we should tweak our high-level message to ensure it resonates with the leadership team.”

Amy Gallo is a contributing editor at Harvard Business Review. Follow her on Twitter at @amyegallo.

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Collaborating Across Generations by Tamara Erickson

If you work with people from every generation, as many of us do these days, how do you communicate with them? And how do you get them to support and participate in your initiatives? By understanding their priorities and positioning your ideas and requests accordingly. To help with that challenge, here’s a snapshot of each generation, along with tips for working effectively across the ages.

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Group Boomers (born between 1946 and 1960)

Defining characteristics • Hold a deeply competitive world view; see most scenarios as win-lose • Are hardworking and driven • Value individual achievement and recognition • Question authority and hierarchy, yet feel pressure to follow established rules and procedures • Are idealistic, but have by and large put “lofty” personal goals on the back burner for the past 30 years • Are often parents of Gen Ys and inclined to enjoy members of this generation • Enjoy mentoring others and the idea of leaving a legacy

How to work with them OVERALL: • Emphasize winning: Explain how your idea either represents a “win” or will make the organization (or individual) more competitive. For instance, if you’re offering a Boomer a new position in the company, comment on how you’ve chosen her over numerous other candidates. Or if you’re proposing a new marketing investment, discuss how it will thwart a competitor’s program. • Seek their counsel: Appeal to their desire to pass on their knowledge. You might ask a Boomer for advice on how to get her boss’s attention, for example, or for help analyzing a problem that keeps cropping up.

IF YOU’RE A GEN XER: • Spell out your career goals: Clearly convey your aspirations to any Boomers with influence on your career well before you’re up for a promotion or new role. Don’t assume they’ll automatically know where you’d like to end up long term or what kind of development path you’d prefer. Their well-intentioned ideas may be quite different from your own. • Overcommunicate: Be transparent in your approach to projects or problem solving. You’re more likely than your Boomer colleagues to consider multiple options. Explain how and when you’ll make decisions so Boomers will recognize the time

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Group

Defining characteristics

How to work with them you’re spending as due diligence, not misconstrue it as indecision or procrastination. • Partner with them: Tap their experience and networks. For example, invite a Boomer to join your skunkworks team. When you’re ready to pitch the best ideas to your executive board, she can help socialize the top contenders with her peers, which may help speed buy-in. She can also raise potential concerns early on— helping you dodge delays at the implementation phase. IF YOU’RE A GEN Y: • Ask them for mentoring: Pair your enthusiasm for learning with a Boomer’s expertise and desire to give back. For example, share your most pressing project management problems with him and discuss potential solutions. In return, offer him tutorials on social media or time-saving technologies. • Make sure your written communication is professional: Boomers are more likely than others to base judgments on the way you present your ideas. Express your recommendations concisely, using correct grammar and spelling. Describe the financial benefits of your suggestions when possible.

Gen Xers (born between early 1960s and late 1970s)

• Are self-reliant • Don’t trust any institution (corporations,

OVERALL: • Weigh your options: Most Xers want to know that you’ve considered (continued)

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Group

Defining characteristics

• • •

• •

•

marriage, and so on) to take care of them forever Like to keep their options open Are irreverent Think outside the box and are comfortable changing the rules as necessary Accept the validity of diverse points of view Have close relationships within a small group of friends (their “tribe”) Place high priority on being good parents

How to work with them contingencies. Earn their respect and buy-in by including a discussion of “what if” when you present ideas to them. For instance, identify the two or three events or trends that would be most likely to disrupt your proposed course of action—and the response you would recommend taking if each one were to occur. • Let them choose: Whenever possible, present a menu of solutions and engage the Xer (whether she is your boss, colleague, or subordinate) in the process of choosing the best one. You might, for example, ask her what weight she would give to various decision criteria. IF YOU’RE A BOOMER: • Employ their innovative thinking: Ask an Xer to help solve a problem or reality-check your solution to make sure you’re viewing the challenge from every possible angle. For example, invite him to test the validity of your strategy statement by posing a broad range of scenarios you might not have considered on your own. • Harness their ability to integrate multiple points of view: Invite an Xer to lead a complex group discussion—for instance, an after-action review. She’s likely to ensure that everyone is heard so you’ll have a fuller picture of what worked well and what needs improvement.

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Group

Defining characteristics

How to work with them IF YOU’RE A GEN Y: • Explore common ground: Make the most of your shared passion for discovering new ways of working. For example, ask an Xer to help you analyze and improve your crossfunctional team’s processes. Or work together to find opportunities to leverage new technology in the organization. • Respect the dues they’ve paid: Most Xers have worked their way up a long career track and may feel threatened by the perception that you want to “leapfrog” past them. When you express your desire for more challenging work, be clear that you’re not looking to take their seat.

Gen Ys (born between 1980 and the mid-1990s)

• Expect to live life fully each day • Are optimistic and confident • Prefer to work on their schedule, not yours • Are hungry to learn; expect regular coaching • Get things done using in-the-moment coordination rather than long-range planning • Work collaboratively • Have limited awareness of corporate hierarchy and protocol • Are comfortable expressing opinions freely and bluntly • Enjoy and respect their parents and tend to retain close relationships with them

OVERALL: • Ramp up the challenge: Give stretch assignments to maintain their interest. For example, ask a Gen Y to prepare a draft proposal for a client. You’ll free up more of your time for other priorities, and he’ll feel that he’s making career progress. Or specify an outcome you need to achieve, but leave the approach to his discretion. Encourage him to find ways to do it better. Tell him, for instance, that the sales team needs to understand and get excited about a new product’s features by the planned launch date, but invite him to propose the communication and training plan. (continued)

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Group

Defining characteristics

How to work with them • Put their work into context: Explain how what they do affects the larger organization. For example, invite a Gen Y to your next marketing meeting so she can see how the daily sales dashboard she’s setting up will help your group accurately track the impact of different campaigns. • Provide frequent feedback: Take every opportunity to teach them. After a brainstorming session, for instance, pull your Gen Y direct report aside to note how useful it was for him to help facilitate. Give him a few specific suggestions on how he could do it even more effectively next time. IF YOU’RE A BOOMER: • Clarify how you’ll communicate with each other: Agree on “rules” everyone feels comfortable with. For example: How frequently will you exchange e-mails or text messages? Will you share questions and thoughts as they come to mind or save them for a weekly status meeting? Work together to accommodate your different preferences. • Tap their technological prowess: Gen Ys are great sources of tech support, often without realizing it. Task a Gen Y with test-driving new software, for example, or looking for shortcuts in the sales-reporting process.

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Collaborating Across Generations

Group

Defining characteristics

How to work with them IF YOU’RE A GEN XER: • Invite Boomers to teach them: If you have a number of Gen Ys reporting to you, facilitate mentoring relationships between them and Boomers, who enjoy teaching and tend to click with Ys (more so than many Xers). Don’t assume that all demands for coaching must be met by the Ys’ managers— spread the responsibilities among other experienced colleagues. • Clear up ambiguities: Ys often ask their managers, typically Xers, for things in terms that can be easily misunderstood. For example, “I’d like a bigger job” may simply mean that a Y wants something more challenging, not necessarily that she’s angling for a promotion. If a Y says, “I’d like to do multiple jobs this year,” she’s probably talking about a variety of tasks, not formal job assignments. “Feedback” often means teaching, not critique or blanket praise. If you’re not 100% sure what a Y means, ask her to clarify.

Tamara Erickson wrote a trilogy of books on the generations: Retire Retirement, Plugged In, and What’s Next, Gen X?. She was named one of the 50 leading management thinkers in 2009 and 2011 by Thinkers50.

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When the Direct Approach Backfires, Try Indirect Influence by Martha Craumer

How do you get people who don’t work for you to work for you? When direct management techniques don’t work— especially with those over whom you have no authority— you may have better luck with these, more subtle, approaches.

1. Talk less, listen more. When you try to persuade people, you can spend too much time explaining your position, and not enough time asking questions, listening, and understanding other points of view. Adapted from reprint #U0608D

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Managing Across

Your colleagues are less likely to resist when they feel you’ve taken the time to acknowledge their concerns. In The 7 Habits of Highly Effective People, Stephen Covey says that the greatest need of human beings—after physical survival—is to be understood, affirmed, and appreciated. He explains that “empathic listening gets inside another person’s frame of reference. You look out through it, you see the world the way they [do], you understand their paradigm, you understand how they feel.” It’s human nature to want to work with, not against, someone who “gets” us. Ask about your colleagues’ challenges or people they’re struggling with. This information will help you identify common goals and solutions. And you’ll be building stronger working relationships. 2. Make ’em like you. It’s hard to say no to someone you like. So how can you increase your likability? Play up similarities. We tend to like people who share our background, interests, style of dress, etc. We also like people who like us. We’re suckers for compliments. If your colleague does a good job leading a meeting, tell him what you liked about the way he ran it. Be specific. Ask another colleague about her weekend and listen—perhaps you’ll discover a shared passion for hiking or reading. Then when you

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When the Direct Approach Backfires

need their help, your colleagues will be more likely to offer their expertise. 3. Make ’em laugh. Ever wonder why so many speakers open their presentations with a joke? Humor is disarming. It makes people root for us. It’s hard to feel bad when you’re laughing—and hard to dislike a person who makes you laugh. Humor makes you appear calm, approachable, and in control. It helps your audience feel more relaxed and receptive to change, new ideas, and your influence. Use humor to help soften a harsh message and make it easier to speak freely about the challenge at hand. But use humor with care. Inside jokes and cultural allusions can be off-putting. And, of course, humor should never be at the expense of the person you’re trying to influence—nor should it make light of her issues or concerns. 4. Do a favor—even a small one. Doing something for someone gives you enormous power and influence over them. In his book Influence: The Psychology of Persuasion, Robert Cialdini discusses the unwritten rule of reciprocity and how it obligates us to repay what another person has given us. Cialdini cites a research study involving two groups of subjects and a “plant”—a man named Joe—who was posing as a fellow subject. Each member of the first group received a small

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Managing Across

“favor” from Joe—a Coke that he picked up for them while out of the room. The second group received no favor. Then, Joe told each group he was selling raffle tickets. The subjects who received a Coke from Joe bought twice as many tickets as the subjects who received nothing. The reciprocity rule overwhelmed all other factors—including whether they even liked Joe. The ticket buyers felt an irresistible need to repay him. The more you raise your hand to help others, the more likely they’ll do the same for you. Volunteer to take notes at a colleague’s brainstorming session. Help set out lunch for a big client meeting. Offer to listen to your teammate’s dry run of a big presentation. 5. Feed ’em. Pick up an extra coffee for the programmer who’s been developing a data feed for your new website. Bring fresh fruit or candy bars to your project launch meeting. Pick one day every two weeks to take a colleague to lunch. Don’t ask your buddy—invite people whom you don’t often get to see outside of all-staff meetings, to help deepen your relationships and extend your network. It’s simple, but true: we like to be fed.

Martha Craumer is a freelance writer based in Cambridge, Massachusetts.

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Index

accountability, 113–114 achievement motivation, 99–102 advice, asking for, 40–41 allies, turning enemies into, 149–160 aspirations, 15 attention, gaining audience’s, 173–176 authority persuasion and, 171 response to, 5, 8 bad news, delivering to boss, 25–29 Boomers, 178–179 boss(es) accommodating, 20 as brand, 44–45 as coach, 4–5 conflict-averse, 61–63 cultural expectations of, 15–16 as evaluator, 4–5 expectations of your, 6–7 feedback from your, 33 giving feedback to your, 65–69 identifying strengths of, 13

incompetent, 55–59 keeping in loop, 50 making look good, 43–45 as manager, 12 managing multiple, 71–77 managing your, 3–16 as micromanager, 47–53 presenting problems or opportunities to, 25–29 relationship with, 3–6, 8–13, 16, 66 seeing as person, 11, 56 winning over new, 17–24 boss’s boss getting to know your, 39–42 making boss look good to, 43–45 understanding your, 44 boundary setting, 75 brain, 90–91 branding, 44–45 bullies, 146 business culture, 122 candor, 20–21, 96 career development, 15, 58

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Index

career goals, 21–22, 58 change agenda, 21–22 coach, boss as, 4–5 coaching, 105 collaboration, 6, 19, 119, 158, 177–183 commitment, 102 common goals, 112, 163 common understanding, 10–11 communication across generations, 177–183 among multiple bosses, 74–75 cross-cultural, 104–105 framing your message, 173–176 nonverbal, 13, 15 with remote bosses, 73–74 with remote colleagues, 117–124 written, 63 competency models, 86–87 compromise, 166 confidentiality, 21 conflict-averse bosses, 61–63 conflict avoidance, 13 controlling bosses, 47–53 core relationships, 132–133 credibility, 162–163 cross-cultural communication, 104–105 cross-functional teams, 41, 121 cultural differences, 15–16, 104–105 customer compliments, 41

business relevance of, 84–86 components of, 82–83, 89 empathy, 83, 89, 102–106 evaluating, 86–88 motivation, 82, 89, 99–102 self-awareness, 82, 88–89, 94–96 self-regulation, 82, 89, 96–99 social skill, 83, 89, 106–108 emotional stress, 58–59 emotions, 151–152 empathy, 83, 89, 102–106 enemies, turning into allies, 149–160 energizers, 135 evaluator, boss as, 4–5 expectations conflicting, from multiple bosses, 72–73 cultural, 15–16 meeting, 9–10 negotiating, 11 of your boss, 6–7 expertise, 162 external motivation, 100

decision-making styles, 35–37 “de-energizers,” 135–136 disagreements, 10, 144–145 discipline of teams, 111–114

generations, 177–183 Gen Xers, 179–181 Gen Ys, 181–183 globalization, 104–105 growth and development, 4, 7, 15

emotional connections, 164 emotional intelligence, 81–109 acquisition of, 90–93

favors, 187–188 feedback from boss, 33, 76 giving your boss, 65–69 to micromanager, 50–51 unsolicited, 66 framing your message, 173–176

hard sells, 165–166 honesty, 19–21

190

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Index

incompetent bosses, 55–59 indirect influence, 185–188 information, sharing, 9–10, 145 integrity, 98–99 intrinsic motivation, 100 job description, 58 judge, boss as, 4–5 leaders qualities of, 81–109 team, 103–104 leadership transitions, 17–24 likability, 186–187 listening, 185–186 loyalty, 10, 73 managerial types, 132–133 managing up, with mentor’s guidance, 31–34 maturity, 90 mentors, 31–34, 59, 105 messages, conflicting, 72–73 micromanagers, 47–53 motivation, 82, 89, 99–102 multiple bosses, managing, 71–77 networking, 121, 125–141 new boss helping get up to speed, 22 preparing to meet, 18–20 winning over your, 17–24 news delivering bad, 25–29 relaying good, 145 nonverbal communication, 13, 15 office politics, 143–147 off-site workers, 115–124 opportunities, presenting to boss, 25–29

organizational bullies, 146 organizational commitment, 102 partnership, relationship with boss as, 8–9, 16 perceptions, sharing your, 67–68 performance targets, 6, 9, 112 personal agenda, 21–22 personal growth and development, 4, 7, 15 persuasion art of, 161–164 indirect, 185–188 mistakes in, 165–167 as process, 166–167 science of, 169–171 tailoring, to different styles, 35–38 political environment, of office, 143–147 problems, presenting to boss, 25–29 problem solving, 12, 42, 62 project guidelines, 49–50 rationality, 154–157, 159 reciprocity, 153–154, 159, 170 redirection, 152–153 relationships with boss, 3–6, 8–13, 16, 66 with boss’s boss, 39–42 building, 106–108, 121 categorizing, 136–137 core, 132–133 credibility through, 162–163 networking and, 125–141 reciprocal, 140, 153–154 remote, 73–74, 115–124 reversing antagonistic, 149–160 trust in, 151–152 remote employees, 115–124

191

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Index

remote relationships, 73–74, 115–124 rivalries, reversing, 149–160 self-awareness, 82, 88–89, 94–96 self-confidence, 95 self-development, 58 self-regulation, 82, 89, 96–99 senior executives, 24, 32 Skype, 122–124 social skill, 83, 89, 106–108 solutions to problems, 26–29, 42, 74 shared, 161 strengths, of your boss, 13 teams accountability of, 113–114 common purpose for, 112

cross-functional, 41, 121 discipline of, 111–114 leadership of, 103–104 technical skills, 87, 109 time zones, 118–119 transparency, 20–22 trust, 10–11, 49, 151–152 understanding your boss as a manager, 12 unsolicited feedback, 66 up-front agreements, 49–50 upward feedback, 65–69 videoconferences, 119, 122–124 workload, 72, 74, 76–77 written communication, 63

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Smart advice and inspiration from a source you trust. Whether you need help tackling today’s most urgent work challenge or shaping your organization’s strategy for the future, Harvard Business Review has got you covered.

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General Management

Whether you’re eyeing a specific leadership role, hoping to advance your skills, or simply looking to broaden your professional network, you need to find someone who can help. Wait for a senior manager to come looking for you—and you’ll probably be waiting forever. Instead, you need to find the mentoring that will help you achieve your goals. Managed correctly, mentoring is a powerful and efficient tool for moving up. The HBR Guide to Getting the Mentoring You Need will help you get it right. You’ll learn how to: • Find new ways to stand out in your organization • Set clear and realistic development goals • Identify and build relationships with influential sponsors • Give back and bring value to mentors and senior advisers • Evaluate your progress in reaching your professional goals

Stay informed. Join the discussion. Visit www.hbr.org/books Follow @HarvardBiz on Twitter. Find us on Facebook, LinkedIn, YouTube, and Google+

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HBR Guide to Getting the Mentoring You Need

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Harvard Business Review Guides Arm yourself with the advice you need to succeed on the job, from the most trusted brand in business. Packed with how-to essentials from leading experts, the HBR Guides provide smart answers to your most pressing work challenges.

The titles include: HBR Guide to Better Business Writing HBR Guide to Finance Basics for Managers HBR Guide to Getting the Mentoring You Need HBR Guide to Getting the Right Job HBR Guide to Getting the Right Work Done HBR Guide to Giving Effective Feedback HBR Guide to Making Every Meeting Matter HBR Guide to Managing Stress at Work HBR Guide to Managing Up and Across HBR Guide to Persuasive Presentations HBR Guide to Project Management

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HBR Guide to Getting the Mentoring You Need

HARVARD BUSINESS REVIEW PRESS Boston, Massachusetts

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Find more digital content or join the discussion on www.hbr.org. Copyright 2014 Harvard Business School Publishing Corporation All rights reserved No part of this publication may be reproduced, stored in or introduced into a retrieval system, or transmitted, in any form, or by any means (electronic, mechanical, photocopying, recording, or otherwise), without the prior permission of the publisher. Requests for permission should be directed to [email protected], or mailed to Permissions, Harvard Business School Publishing, 60 Harvard Way, Boston, Massachusetts 02163. The web addresses referenced in this book were live and correct at the time of the book’s publication but may be subject to change. Library of Congress Cataloging-in-Publication Data HBR guide to getting the mentoring you need. pages cm ISBN 978-1-4221-9600-7 (alk. paper) 1. Mentoring in business. 2. Career development. I. Harvard business review. HF5385.H34 2014 650.14—dc23 2013032976 ISBN: 9781422196007 eISBN: 9781422197493

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What You’ll Learn

Stuck in a career rut? Maybe you’re itching to broaden your skills and take on new challenges. Or perhaps you’re eyeing a management role a level or two up. So how do you grow and advance professionally? Not by waiting for senior managers to notice you and “bring you along.” You’ll be sorely disappointed by how long that takes, if it ever happens. The key is effective mentoring—and it’s up to you to go get it. Done right, mentoring is one of the most powerful, efficient tools for learning and moving up. But to reap those rewards, you need to pursue them with rigor and commitment. This guide will show you how. You’ll get better at: • Deciding which skills to sharpen • Finding new ways to shine in your organization • Setting clear, realistic development goals • Attracting influential sponsors • Forging strong bonds with your mentors

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• Giving back to them • Accepting and using feedback • Gauging your progress • Building a diverse “developmental network” • Learning from executives, peers, and protégés

vi

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Contents

Introduction: Taking Charge of Your Career

1

BY TAMARA ERICKSON

Section 1: WHAT GOOD MENTORING LOOKS LIKE 1. The Relationship You Need to Get Right

9

Understanding your role as a protégé. BY SYLVIA ANN HEWLETT, MELINDA MARSHALL, AND LAURA SHERBIN

2. Mentoring in All Its Shapes and Sizes

23

Mentoring comes from lots of sources—not just sage executives with 20 years on you. BY AMY GALLO

Section 2: MAPPING OUT YOUR DEVELOPMENT 3. Reaching Your Potential

31

Know yourself—and find fulfillment. BY ROBERT S. KAPLAN

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Contents

4. Making Yourself Indispensable

43

Shore up what you already do best. BY JOHN H. ZENGER, JOSEPH R. FOLKMAN, AND SCOTT K. EDINGER

5. Why You Didn’t Get That Promotion

71

Get the feedback you need to advance. BY JOHN BEESON

Section 3: GROWTH AND ADVANCEMENT 6. Finding the Right Mentors

87

Here are three common types—and when each works best. BY DIANE COUTU

7. Defining Your Goals and Expectations

95

Some questions to guide your thinking.

8. Starting and Maintaining Relationships with Mentors

99

It takes structure and rigor to build strong relationships and keep them fruitful. BY LEW MCCREARY

9. How to Get More from Your Mentors

113

Provide value—and receive more in return. BY JODI GLICKMAN

10. Employ a Personal Board of Directors

117

Hitching your career to one mentor won’t take you far. BY PRISCILLA CLAMAN

viii

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Contents

11. A Smarter Way to Network

121

Connect with carefully chosen people to get more out of your relationships. BY ROB CROSS AND ROBERT THOMAS

12. Accelerate Your Development: Tips for Millennials

135

Put your mentoring on a fast track to compete for bigger roles. BY JEANNE C. MEISTER AND KARIE WILLYERD

13. Mentoring for Gen Xers

143

Earlier in your career, it made sense to dabble. Now it’s time to play to your strengths. BY TAMARA ERICKSON

14. Keep Learning from Your Protégés

151

Stay humble, and stay sharp. BY HOLLIS HEIMBOUCH

Index

157

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Introduction Taking Charge of Your Career by Tamara Erickson

Think of the most valuable insights you’ve gained about work and life. Chances are, those gems came to you through some form of mentoring, not from textbooks or classroom lectures. People with the experience, knowledge, skills, or perspective you seek have shared their wisdom with you, maybe even helped you put it to use. Mentoring is indispensable to learning throughout our careers, not just while we’re wet behind the ears. It’s how we identify and fill critical gaps we’d struggle to address on our own. A good mentor is part diagnostician, assessing what’s going on with you now, and part guide, connecting you with the advice, ideas, people, and resources you need to grow and move ahead. That kind of support is essential these days, since career paths are anything but simple and straightforward. You now have more options than you know what to do with. And even if you do have a clear sense of direction,

1

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Introduction

you probably face organizational and personal hurdles. These factors complicate matters further: • Shifting roles. Your developmental needs change as you move from mastering content (producing the goods or services your company sells) to shaping context (setting the stage for other contributors to thrive). Generally, roles shift from content to context as you move up in an organization—but even that is changing as traditional, hierarchical structures break down. Many “senior” roles involve equal parts strategy and execution, and many “junior” folks get involved in high-level discussions about company values and goals. So it can be hard to sort out exactly which skills you need to build at what time. Mentors bring a fresh perspective, combined with a vested interest in your success— they work with you to identify the keys to your progress and modify your behavior appropriately. • Calibrating career potential. Sooner or later, most of us weigh our career expectations against our fundamental capabilities and passions, the time and energy we want to invest in our work, and the demands imposed by our lives outside work. That’s hard to do in isolation. Again, mentors can help you assess where you are and figure out next steps. Mentoring does not always have to be about climbing—it can involve finding peace with the life you’re leading, making the most of your choices, or carving out a new niche.

2

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Introduction

As critical as they are, good mentors almost never come your way unbidden. Waiting for others to reach out to you, or for your employer to play matchmaker, rarely pans out—certainly not with the frequency and commitment that you need and your career deserves. Although many companies recognize that mentoring leads to bench strength for them, not just opportunities for you, those that actually provide it tend to do so in old-school ways, through top-down, highly managed, overly scheduled “arranged marriages” between organizational veterans and newbies. Programs that assign senior individuals to junior counterparts—of course, in a good-faith effort to match interests and personalities—are minimally effective because they’re not tailored enough. They also force relationships instead of allowing them to develop organically, over time, through mutual trust and respect. And the follow-up is often spotty. Some company-assigned mentors take their mentees out to lunch once and then check that responsibility off their “to do” list. The bottom line: Even if you participate in a formal mentoring program, it’s up to you to find the right people to work with, form strong relationships with them, tap them when you need them the most, and—just as important—return the favor. This guide will help you do all that. For starters, Sylvia Ann Hewlett and her coauthors explain in the opening chapter how you’ll benefit from dedicated sponsors—mentors who go above and beyond to provide advocacy, resources, and tactical support so you’ll prosper in the organization. (Traditional mentors offer guidance and emotional support, but they’re not as

3

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Introduction

inclined as sponsors to stand up for you or call in favors for you.) Use the information in the first section of this guide to consider what kinds of mentoring will best serve your needs. You’ll also discover different, unexpected sources of mentoring that others have found valuable. Then, as you’re reading the second section, you’ll step back and think more deeply about your current situation and where you want to go. For example, Harvard Business School management professor Robert S. Kaplan advises taking a very personal look at what success means to you and offers thoughtful guidance on how to get there. Other expert authors wrestle with tough issues like how to make yourself indispensable at work and why you didn’t get the promotion you were hoping for. Finally, in the third section, you’ll get practical counsel on finding the right types of mentors, defining your goals and expectations, building relationships, establishing a give-and-take dynamic, networking effectively—in short, making mentoring work for you. You’ll also find tips expressly for Millennials and Gen Xers, and ways to learn meaningfully from your own protégés. At this point in your career, you may discover that you don’t enjoy your work and need help charting a better course. Or you might find your work engaging but still feel stuck or confused about where you’re headed in the future. Or you may simply want to change the intensity of your work—to do less or do more. Working closely and deliberately with a mentor, you can meet challenges like these by playing to your strengths, building the right skills, understanding your role in greater depth, learning

4

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Introduction

to manage up, expanding your career options through networking, and making smart work/life trade-offs. All this takes time and discipline—but it’s well worth the investment.

Tamara Erickson works with corporations to more effectively engage the changing workforce. She is the author of a trilogy of books on the generations: Retire Retirement, Plugged In, and What’s Next, Gen X? (Harvard Business Review Press, 2008, 2008, and 2010). She was named one of the 50 leading management thinkers in 2009 and 2011 by Thinkers50.

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Section 1

What Good Mentoring Looks Like

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Chapter 1 The Relationship You Need to Get Right by Sylvia Ann Hewlett, Melinda Marshall, and Laura Sherbin

Katharine, a senior HR executive at a global financial services firm, takes pride in developing rising stars. After a vice president on one of her teams consistently impressed her, she recommended him for a more challenging role in another part of the company. Months later Katharine heard through the grapevine that he was struggling in the job. She asked to meet with him. “You know we’re in this together, right?” she said. “I put my reputation on the line, but I have no idea how you’re performing and

Reprinted from Harvard Business Review, October 2011 (product #R1110K)

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What Good Mentoring Looks Like

whether you need help or air cover.” He promised to keep her in the loop, but communication dropped off again. Katharine realized that his commitment to the firm, and to her, had waned. She met with him once more and told him she could no longer be his sponsor. When Maria, a manager at a U.S. health care firm, was invited to join a mentoring program for high-potential women, she anticipated getting guidance that would help her advance. But her assigned mentor, a physician and vice president, took little interest in Maria’s career; instead she lectured to the group about her own path and gave direct advice only to the participants who were also MDs. In the end Maria turned to existing allies for career support. “Not everyone in leadership knows how to be an advocate,” she reflects. In 2003 Mark McLane, an openly gay innovation consultant at Whirlpool, was asked to serve on the company’s diversity council, headed by then-COO Jeff Fettig. He excelled at the work and in 2004 sought an appointment to southwest Michigan’s Council for World Class Communities, a nonprofit that furthers economic and social growth in the largely African-American community of Benton Harbor, Michigan, where the company is headquartered. Fettig supported his bid and also persuaded CEO David Whitwam to make McLane Whirlpool’s director of diversity, enabling him to be the council’s executive-on-loan. That year Fettig moved up to the CEO job and gave his protégé a new mission: to ensure gender balance among senior managers globally. McLane set four-year goals and aligned Whirlpool’s recruiting strategy accordingly. “Mark not only grasped our

10

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The Relationship You Need to Get Right

vision for key areas of the company, he played a critical role in implementing it,” Fettig says. McLane also demonstrated his allegiance to Fettig outside the office. The CEO is a trustee of the local Boys and Girls Club, a nonprofit he sees as key to making Benton Harbor a “world-class community” that might have greater appeal to Whirlpool recruits and be more likely to yield local talent. McLane joined the board and, with Fettig’s coaching, became president after six months. He instituted reforms that turned the organization’s $125,000 deficit into a $500,000 reserve and nearly doubled its membership within a year. “If someone believes in you and gives you an opportunity, it is incumbent upon you to go the extra mile,” he observes.

The Dynamics of Sponsorship As the earlier examples show, the relationship between sponsor and protégé works best when it helps both parties. Katharine, who requested anonymity to protect her firm’s reputation, cut ties with her former vice president because he failed to demonstrate basic responsiveness, let alone deliver the standout proactive effort she’d expected. Maria, who asked for anonymity because she still works with the physician once assigned to mentor her, found that the older woman lacked a grasp of the give-and-take intrinsic to effective guidance. By contrast, Fettig and McLane worked together on the twin goals of hitting Whirlpool’s business targets and enhancing their reputations as leaders in the community. Sponsorship can help catapult junior talent into top management while also greatly expanding the reach and

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impact of senior leadership—but only when both sponsor and protégé recognize that it’s a mutually beneficial alliance, a truly two-way street. Our recent research bears this out. We conducted three national surveys of nearly 4,000 professionals in large corporations, held focus groups with more than 60 vice presidents and senior vice presidents, and interviewed nearly 20 Fortune 500 executives. The best sponsors, we found, go beyond mentoring. They offer not just guidance but also advocacy, not just vision but also the tactical means of realizing it. They place bets on outstanding junior colleagues and call in favors for them. The most successful protégés, for their part, recognize that sponsorship must be earned with performance and loyalty—not just once but continually. We repeatedly heard CEOs and top managers say that they wouldn’t be where they are without strong sponsors and loyal protégés. One Fortune 500 CEO gave a powerful illustration. When interviewing candidates for senior positions, he always asks them, “How many people do you have in your pocket? If I asked you to pull off something impossible that involved liaising across seven geographies and five functions, who owes you one and could help you do it?” He told us, “I’m not interested in anyone who doesn’t have deep pockets.” Ensuring that you have sponsors is a lifelong project no matter what your position. As she neared retirement age, a senior partner at Ernst & Young belatedly recognized that she hadn’t “refreshed” her pool of sponsors. “I had always looked forward to a second career as a board director, but I’m realizing that being selected for a

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board seat is all about sponsorship,” she says. “You can’t apply for these positions; you’ve got to be tapped.” Nor is it ever too early for a junior executive to start cultivating protégés. Kris Urbauer, the manager of veterans’ initiatives at GE, acknowledged that to achieve CEO Jeffrey Immelt’s goal of making the company an appealing employer for returning vets, she would have to develop a posse of high-performing subordinates. “With all eyes on me to deliver, I’m going to need some dedicated help,” she told us. Our first exploration of sponsorship, a 2011 HBR special report titled “The Sponsor Effect,” revealed the impact a sponsor can have on virtually every aspect of an employee’s career, boosting the ability to ask for and get raises and promotions and find satisfaction at work. Yet relatively few of the employees we surveyed—19% of men and 13% of women—reported having a sponsor. The use of a sponsor as a career lever is sometimes poorly understood, other times perceived as rife with risk. And corporate initiatives designed to jump-start sponsorships have had at best mixed results. Leaders can’t lobby convincingly for up-and-comers they don’t know, and junior employees paired with sponsors don’t see what they can contribute or can’t deliver it. Seeking to better understand these relationships, we launched a second round of research. Our initiative, Sponsor Effect 2.0, enabled us to map the quid pro quo: how protégés can attract, sustain, and deploy sponsors to progress in their careers, and how sponsors can use the dynamic to extend their reach, expand their skills, build networks, and demonstrate leadership.

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The Sponsor’s Role What exactly does a sponsor do? According to our research, it boils down to two things: putting one’s reputation on the line for a protégé and taking responsibility for his or her promotion. A good sponsor will groom you to audition for a key part in a prominent production, nudge the director to choose you, and coach you on your performance. While you’re onstage, she’ll train a spotlight on you so that everyone takes note of your abilities and potential. Should you stumble, or should the audience turn hostile, she’ll come to your aid (at least the first time). After all, “protégé” means “one who’s protected.” When we asked managers what they hoped for in a sponsor, 74% said they want a sponsor to provide honest feedback, specifically by suggesting ways for the protégé to narrow gaps in skills and experience. Other frequent responses included “provide feedback on how to look and act like a leader” (59%), “provide opportunities for visibility internally” (49%), “help me define career goals” (44%), and “be willing to defend me” (41%). The degree to which a sponsor will come to the rescue of a protégé varies considerably, however. A Siemens executive told us her sponsorship has to be clearly merited lest it look like favoritism. “If you screw up, I may step in, but if you continue not to thrive, I’ll have to step away,” she says. At the law firm White & Case, by contrast, partner and tax attorney Jim Hayden supported his protégé Someera Khokhar repeatedly. When Khokhar had a conflict with another partner, Hayden intervened to mend

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fences. When long-term clients demurred at liaising primarily with an associate, Hayden vouched for Khokhar’s expertise. In subtle and overt ways he ensured that she could thrive—which indeed she did, eventually making partner. “Every time I needed something, he made it happen, whether by his presence or his influence,” Khokhar recalls.

The Protégé’s Part What protégés should do for their sponsors is less well understood. Our survey indicated that the top two imperatives are demonstrating trust and showing loyalty. (Some 61% agreed with the former idea and 49% agreed with the latter one.) When we asked potential sponsors, 62% said protégés should “assume responsibility and be self-directed,” 39% said they should “deliver 110%,” and 34% said they should “offer skill sets and bring a perspective different than mine.” One respondent summed it up this way: “A protégé who doesn’t do everything in her power to make her sponsor look smart for backing her is wasting the sponsor’s time.” Ed Gadsden, the chief diversity officer at Pfizer, emphasizes that a protégé should keep her sponsor apprised of critical developments, conversations that might be off his radar, and constituencies outside his circle. He recalls a conversation with his sponsor, the late legal scholar and federal judge Leon Higginbotham. Early on Gadsden asked Higginbotham what he got out of the relationship. Higginbotham replied, “You’re nothing like me. The people you’re around, the things you see, what you’re

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MENTORS AND SPONSORS: HOW THEY DIFFER Companies need to make a sharper distinction between mentoring and sponsorship. Mentors offer “psychosocial” support for personal and professional development, plus career help that includes advice and coaching, as Boston University’s Kathy Kram explains in her pioneering research. Only sponsors actively advocate for advancement. “Classical mentoring” (ideal but rare) combines psychosocial and career support. Usually, though, workers get one or the other—or if they get both, it’s from different sources. Analysis of hundreds of studies shows that people derive more satisfaction from mentoring but need sponsorship. Without sponsorship, a person is likely to be overlooked for promotion, regardless of his or her competence and performance—particularly at midcareer and beyond, when competition for promotions increases.

hearing—you provide a perspective I wouldn’t otherwise have.” Today Gadsden appreciates this quality in his own protégés. Several successful protégés spoke of achieving their sponsor’s vision (recall Mark McLane). At a large government contractor, one team leader, a former member of the military, described a boss whose big-picture goals required great tactical expertise. “I’d see where he wanted to go, and I didn’t say ‘That’s never going to work’ but rather ‘Yes, sir!’” he told us. “I found solutions—and he 16

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Mentors

Sponsors

• Can sit at any level in

• Must be senior manag-

the hierarchy • Provide emotional

ers with influence • Give protégés expo-

support, feedback on

sure to other execu-

how to improve, and

tives who may help

other advice

their careers

• Serve as role models

• Make sure their people

• Help mentees learn

are considered for

to navigate corporate

promising opportuni-

politics

ties and challenging

• Strive to increase mentees’ sense of

assignments • Protect their protégés

competence and

from negative publicity

self-worth

or damaging contact

• Focus on mentees’ personal and profes-

with senior executives • Fight to get their

sional development

people promoted

Excerpted from Harvard Business Review, September 2010 (product #R1009F)

appreciated that. Together we really drove results and fast-tracked both our careers.”

Finding Each Other Most sponsors cultivate protégés not from self-serving motives but because it’s “the right thing to do” and can be a gratifying experience. “Paying it forward is my way of 17

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paying back the people who helped me get where I am today,” says Annmarie Neal, the chief talent officer at Cisco. Leaders will give their time, attention, and relationship capital only to people who perform exceptionally well. Katharine’s vice president caught her attention, she told us, because he was “the kind of guy you could put in a room and he’d come up with that big idea.” Sponsors also get behind those who are hungry for backing. Cynthia Rivera, a senior diversity specialist at Freddie Mac, notes, “They’ve got to show me they’re going to make the most of what I have to give.” Finally, while many sponsors seek protégés who balance their own strengths and weaknesses, they also tend to support people with similar values, mind-sets, or backgrounds. “My race and gender often form the basis for my affinity, because there are so few female multicultural leaders in tech,” says Rosalind Hudnell, the chief diversity officer at Intel. “I see myself in them and in the challenges they’ll face, which allows me to help them in ways others might not be able to.” Junior executives should be just as selective when seeking sponsors, and they should take a proactive approach. One IT professional highlights a common mistake. “I was great at building business and had tons of cheerleaders, but I had that typical Asian keep-yourhead-down-and-you’ll-get-taken-care-of mind-set,” he recalls. “My boss had to take me aside and tell me that if I didn’t actively cultivate her as my sponsor, I would never progress beyond senior associate.” The most successful protégés are not content with one sponsor. Throughout their careers they scan the horizon for leaders who either embody their values (the quality

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most sought by 45% of the protégés we polled) or value their strengths (43%). They target leaders whose style they can complement—bringing tactical follow-through skills to visionaries or offering pushback to collaborators. They target leaders they think could benefit from their networks as well as their expertise. And they routinely ask for career guidance, feedback, and stretch assignments. A vice president with 26 years of experience remembers consistently approaching her bosses for more responsibility. “Sponsors cannot be clairvoyant,” she explains. “If you want to grow in the organization, then spell out how—and the introductions or team postings will follow.” Cynthia Rivera recalls that early in her career she asked for an appointment with the executive vice president; when his assistant pressed to know her business, she said it was a personal matter. During the meeting she laid out her career history and desired trajectory, soliciting feedback on the skills and experience she might need. “Ask for input, not a job,” she recommends. “You don’t want to go in there waving a résumé.” The strategy paid off: By the end of the meeting she had won a sponsor. Women seem particularly reluctant to be so proactive. “They don’t want to have to toot their own horn,” explains Subha Barry, a senior vice president at Freddie Mac. During a previous job at Merrill Lynch she found an alternate strategy. She asked three female colleagues, all reporting to different executives, to meet monthly over lunch to discuss one another’s work. That way they could knowledgeably promote the others to those in their own circles. “When women talk about each other, we can be quite

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eloquent,” Barry observes. “So I might say to my boss in response to a problem he was airing, ‘This is something my colleague Lisa’s been working on; she’s got some great ideas. You need to talk to her.’” The strategy was remarkably effective, gaining Barry and her lunchmates C-level positions within and outside the firm. Respondents offered several additional sponsorwinning tactics. Chief among them was “leading with a yes”: voicing enthusiasm when offered a challenging assignment. (If you have reservations, don’t air them right away.) Others included bringing in new business, keeping potential sponsors “in the know,” and developing a product or service on their behalf.

Maintaining the Relationship Winning a sponsor is just the beginning. The relationship must be consistently nurtured and periodically refreshed—tasks that fall to the junior player. Successful protégés understand that sustaining sponsorship looks a lot like earning it: meeting deadlines, exceeding targets, and proving you will advance the larger mission. They recognize the importance of regular meetings, whether face-to-face or by phone or e-mail. They know to look for opportunities to forge bonds. And they find ways to support a sponsor’s passion or help build his or her legacy outside the organization. Protégés can also strengthen their relationships with sponsors by becoming sponsors themselves, because harnessing and growing talent is arguably the best demonstration of leadership ability. “Tiger” Tyagarajan, the CEO of Genpact, is a case in point. During the 17 years

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when he was the protégé of then-CEO Pramod Bhasin, he distinguished himself by building highly effective teams from scratch. “I had to hire people with background and depth and then sell them a vision, because I was putting them into what looked like a small job and making it their business to grow it,” he recalls. “My ability to attract big people, get them excited, and keep them excited was one of the main drivers of my career.” Mark McLane is now the director of diversity and inclusion at Booz Allen Hamilton and is mindful of cultivating his own protégés. He recently lobbied for a team member’s advancement, and that associate is returning the favor, ensuring that what’s near and dear to McLane gets communicated across divisions. “He’s promoting not just the percentages I’ve driven but the cultural changes I’ve effected,” McLane says. “I’ll continue to expend capital on him because he’s taking my mission forward in ways neither of us could have foreseen.”

Sylvia Ann Hewlett is the founding president of the Center for Work-Life Policy and SA Hewlett Associates and the chair of the Hidden Brain Drain, a task force of 67 global companies. Melinda Marshall is a senior fellow at CWLP, and Laura Sherbin is a senior vice president and the director of research there.

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Chapter 2 Mentoring in All Its Shapes and Sizes by Amy Gallo

When you think of mentoring, do you envision a sage executive counseling a junior upstart for years and years? It doesn’t usually work that way anymore. Over the past few decades, mentoring has evolved into guidance and support from all kinds of sources—yet our collective thinking about it hasn’t changed with the times. Here’s a roundup of four dated but persistent myths you’ll need to push past to grow and advance in your career.

Myth #1: You have to find one perfect mentor It’s actually rare to get through your career with only one mentor; most people today have several. So it makes sense that Boston University management professor Adapted from content posted on hbr.org on February 1, 2011

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Kathy Kram prefers the term developmental network: “It’s that handful of people you can go to for advice and can trust to have your best interests in mind,” she says. Your developmental network can be as large or small as you want and may include people you know on a personal level, such as friends and family members. Some of the key benefits of having more than one mentor within close reach: You can get a variety of perspectives on a challenge you’re facing, you’ll have ready access to people with different areas of expertise, and you’re less likely to wear people out if you have more than one mentor to answer questions and respond to ideas. Consider how Soki Choi, a mobile app developer whose start-up was acquired, sought career mentoring from several people in her developmental network when she was considering next steps: Should she take a job with another telecom company, start a new business, or switch fields and pursue a degree in medical research, as she’d always wanted to do? For guidance, she turned to Ewa Ställdal, the CEO of a major medical research foundation, who connected Choi with others in the field so she could do her homework; former Ericsson CEO Björn Svedberg, who urged her to pursue her dreams as he wished he had done; and Choi’s friend Martin Lorentzon, who’d made a similarly dramatic career change of his own. All those perspectives shaped her decision to get a medical PhD at the Karolinska Institute rather than accept one of the many telecom job offers that came her way.

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Myth #2: Mentoring is always a formal long-term relationship Because we change jobs and careers more often than we used to, a long-term advising relationship may not be realistic or necessary. Think of mentoring as something you tap when you need it. “Mentoring can be a one-hour session. We don’t have to escalate it to a six-month or yearlong event,” says Karie Willyerd, cofounder of the executive development firm Future Workplace. “You don’t need to wait until you have some big thing in your career,” adds Jeanne Meister, Willyerd’s fellow Future Workplace cofounder. These days, Meister says, mentoring is often “more like Twitter and less like a psychotherapy session.” Of course, the guidance may be richer and more relevant if it comes from someone who knows you well and understands your goals. You still need to build other relationships, though, so you’ll have connections in place when you require advice that people closer to you can’t provide. Occasionally, you may want to turn to someone who doesn’t know you at all to get one-off counsel from an outsider’s point of view.

Myth #3: Mentoring is only for junior people “We used to think it was people at early stages of their career who needed mentoring, those just out of MBA programs,” says Kram. “Now we understand that people at every stage benefit from this kind of assistance.” Sometimes, as Meister and Willyerd point out in The 2020 Workplace, it even makes sense to flip the traditional

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Coaching versus mentoring Your coach should . . .

Your mentor should . . .

Focus on performance improvement Provide career guidance, protection, or skill development and (ideally) sponsorship within the organization Work with you to set clear, performance-based goals you can realistically meet in a short amount of time

Invite exploration and discovery, often over a longer period of time

Ask questions that prompt you to discover your own solutions

Model, teach, advise, motivate, and inspire

Adapted from The Center for Creative Leadership Handbook of Leadership Development (Jossey-Bass, 2010).

roles and have a junior colleague advising a senior one on things like new technology. No matter where the teaching comes from, if it’s smart and useful, we need to be receptive to it. That may not come naturally if you think you’re already at the top of your game, as Stephen Wachter did after two decades in the recruiting business. When he founded the firm Osprey One, he landed some of the largest clients in Silicon Valley, including Google, Yahoo, and Facebook. Two years ago, his view of himself changed when he sat next to Susan Robertson, a leadership development consultant, on a plane headed to the East Coast. When they started talking about what they did, Wachter proudly shared his successes—and Robertson asked him, “So, what’s your next step?” The question blew him away. He thought he simply had to keep doing what he was doing. In talking to Robertson, though, Wachter realized he 26

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had room to grow in how he interacted with his clients. He also saw that if he stopped developing, the industry would grow without him and pass him by. Wachter and Robertson have stayed in touch and continue to have a mentoring relationship. They have regularly scheduled conversations in which Robertson helps him think through challenges he’s facing and forces him to reflect on who he is and how he is with others. Because she holds him accountable for his own development, he doesn’t get complacent: “The danger,” he now understands, “is when you think you’ve got it all figured out.”

Myth #4: Mentoring is something more experienced people do out of the goodness of their hearts Though mentors can get a lot of satisfaction from helping people develop and learn, the relationship should be useful to both parties. Before you reach out to a mentor, think about what you have to offer as a mentee: Can you provide a unique perspective on the organization? Do you bring valuable information that might help your mentor succeed in his job? Whatever it is, be clear with your prospective adviser about what’s in it for him. This does not have to be a direct barter. Even the promise of future help, if and when it’s needed, may persuade a mentor to share his time and energy with you.

Now that you have a better understanding of what mentoring can be, do you need it? “The place to start is with self-assessment, to find out what are the challenges in

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front of you . . . and why,” says Kram. “Then ask yourself, do you have the relational resources to handle those challenges?” If the answer is no, it may be time to seek out one mentor or several, junior or senior. The key, as you’ll see throughout this guide, is to find the right kind of advice from the right person at the right time.

Amy Gallo is a contributing editor at Harvard Business Review. Follow her on Twitter at @amyegallo.

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Section 2

Mapping Out Your Development

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Chapter 3 Reaching Your Potential by Robert S. Kaplan

Ambitious professionals often spend a substantial amount of time thinking about strategies that will help them achieve greater levels of success. They strive for a more impressive job title, higher compensation, and responsibility for more sizable revenues, profits, and numbers of employees. Their definitions of success are often heavily influenced by family, friends, and colleagues. Yet many ultimately find that, despite their efforts and accomplishments, they lack a true sense of professional satisfaction and fulfillment. During my career with Goldman Sachs, as well as over the past few years of teaching and coaching managers and MBA students at Harvard Business School, I have met a surprisingly large number Reprinted from Harvard Business Review, July 2008 (product #R0807C)

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of impressive executives who expressed deep frustration with their careers. They looked back and felt that they should have achieved more or even wished that they had chosen a different career altogether. Consider a very successful research analyst at a large securities firm who came to see me because he was discouraged with his career progress. This was particularly ironic because he was well known, highly regarded (ranked number one in his industry sector), and well compensated. He told me that, after 10 years, he was tired of his job, disliked his boss, and felt he had no potential for further upward mobility. Most of all, he had always wanted to be an investment manager, but he had started out as an analyst and never really reassessed his career path. He felt trapped. He feared losing his stature and didn’t want to let anyone down, but at the same time he didn’t want to keep doing what he was doing. As we talked, he wondered if he’d been so busy trying to reach specific milestones and impress other people that he’d lost sight of what he really enjoyed doing. The truth was that he loved analyzing stocks and assessing management teams, but he also wanted to have the responsibility for making the actual investment decisions and then be held accountable for the results. I encouraged him to take action and speak to a number of investment firms (including his current employer) about a career change. After doing this, he ultimately was offered and accepted a portfolio manager position in the asset management division of his current firm. He learned that his firm’s leaders wanted to retain him regardless of job description and that they were quite surprised to find out

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he wanted to be on the investment side of the business. He has since become a superb investment manager, and although he wishes he’d stepped back and reexamined his career years earlier, he’s thrilled that he made the switch while there was “still time.” If you are experiencing similar feelings of frustration or even regret about the direction of your career, this article is intended to help you examine the question, “Am I reaching my potential?” This is not the same as asking, “How do I rise to the top?” or “How can I be successful in my career?” Rather, it’s about taking a very personal look at how you define success in your heart of hearts and then finding your path to get there. To do that, you must step back and reassess your career—starting with the recognition that managing it is your responsibility. Too many people feel like victims in their careers, when in fact they have a substantial degree of control. Seizing control requires you to take a fresh look at your behavior in three main areas: knowing yourself, excelling at critical tasks, and demonstrating character and leadership.

Knowing Yourself Taking responsibility for your career starts with an accurate assessment of your current skills and performance. Can you write down your two or three greatest strengths and your two or three most significant weaknesses? While most people can detail their strengths, they often struggle to identify key weaknesses. This exercise involves meaningful reflection and, almost always, requires soliciting the views of people who will tell you the

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brutal truth. Unfortunately, you often can’t count on your boss to accurately assess your strengths or to be willing to confront you with what you’re doing wrong. It’s up to you to take control of this process by seeking coaching, asking for very specific feedback, and being receptive to input from a wide variety of people at various levels within your organization. This gathering of feedback needs to be an ongoing process because, as your career progresses, you will face new challenges and demands. Recently I met with a division head of a large professional services firm. Though he’d been a rising star for several years, he felt he’d begun to stagnate. His direct reports and his CEO no longer seemed engaged and enthusiastic in their dealings with him, and he didn’t know why. In our discussions, he was able to specifically describe his strengths, but when I asked about his weaknesses, he gave me fairly generic responses, such as “Maybe I’m too impatient” and “I need to raise my profile.” When I pressed him about feedback from his boss he still struggled to identify even one specific weakness. I sent him off on an assignment: Interview at least five colleagues and subordinates. He returned a few weeks later with several “surprises.” He’d heard, for example, that while he was detailoriented and decisive, he micromanaged, had a dictatorial style, and failed to listen. Armed with these insights, he sought coaching, started working on his flaws, and began regularly soliciting feedback from his colleagues and subordinates. A year later he reported that his effectiveness had improved as a result of these ongoing efforts,

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and he was once again feeling confident and optimistic about his career. This type of initiative takes time, humility, and a willingness to confront weaknesses, fears, and blind spots that many of us would rather ignore. But I never cease to be impressed by the capacity of people to change and improve once they recognize their shortcomings as well as their strengths. Of course, getting others to tell you where you’re falling short isn’t easy—particularly if they’re your subordinates. It must be done in one-on-one conversations, and you need to give potential coaches time to learn that you’re sincere. When your employees see you actually act on their feedback, they are likely to become more proactive in offering advice, because they know you value their input. Your subordinates and colleagues will also feel they have a stake in your success and that of your unit—which will make them more likely to enjoy working with you. Once you have a grip on your strengths and weaknesses, your next challenge is to figure out what you truly enjoy doing. What’s your dream job? How well does it match what you currently do? Many people either don’t know what their passions are or are so focused on the views of their peers that they drift into the wrong career. I was recently approached by an MBA student who wanted advice on whether to go work for a hedge fund, a private equity firm, or an investment bank. When asked whether he had an interest in financial markets, he quickly said no. He wasn’t even sure about the key tasks that each of those jobs would entail. When asked what he would do

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if he had $10 million in the bank, however, his answer was very clear: pursue a career in the music industry. He was a concert-level musician and loved the music business. Once he recognized how much he had been swayed by his fellow students’ bias toward the lucrative financial services industry, he realized he needed to rethink his choices. The conventional wisdom about the attractiveness of various careers changes constantly. Twenty-five years ago the medical and legal professions were considered financially rewarding and socially desirable. Today, a number of doctors and lawyers are frustrated in their jobs and realize that they might have based their career choices excessively on the views of their peers and popular opinion, instead of on whether they would actually love the work. Hedge funds and private equity are today’s hot fields, but people who go into them without a strong enthusiasm for the actual tasks may find themselves starting from scratch a few years down the line. Loving what you do gives you the strength to weather personal setbacks, overcome adversity, face and address your weaknesses, and work the long hours typically needed to reach your full potential.

Excelling at Critical Tasks It’s very difficult to succeed if you don’t excel at the tasks that are central to your chosen enterprise. That sounds painfully simple, but many executives fail to identify the three or four most important activities that lead to success in their job or business. If you’re a medical researcher, the three keys are likely to be conducting cutting-edge re-

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search, getting published, and fund-raising. If you manage a large sales force, the crucial tasks might be attracting, retaining, and developing outstanding salespeople; customer segmentation; and client relationship management. If you’re assessing a potential job move, you need to know what will drive success in the new position and, then, ask yourself whether you enjoy those key tasks. In your current job, identifying critical tasks helps you determine how to spend your time and develop your skills. Promising leaders sometimes lose sight of this connection. Not long ago, a new division head at a large industrial company told me that he was struggling to grow sales and profits. He complained that he was spending too much time fighting fires and didn’t have enough hours in the day. When I asked him to identify the three main drivers of success in his business, he realized that he wasn’t sure. He spent the next several weeks interviewing staff and customers, and concluded that success in his business depended on developing close relationships with the purchasing managers at each of his top 25 customers, putting the right people in critical sales and manufacturing leadership positions, and staying at the cutting edge of product innovation. He also realized that his division was performing poorly in all three areas. He proceeded to clear his calendar, force himself to delegate tasks that were less central to success, and focus on raising the bar in each of these areas. Six months later he reported that he had replaced a number of executives—including the sales manager and head of product development—and created an executive committee that met weekly to discuss critical business issues. He

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also reported that he’d become much more disciplined in matching his priorities (and those of his leadership team) with the keys to success for the business. Sales and profits began to improve, and he felt confident that he would resume his upward career trajectory.

Demonstrating Character and Leadership While seemingly amorphous, character and leadership often make the difference between good performance and great performance. One measure of character is the

FOLLOW YOUR OWN PATH Reaching your potential requires introspection and certain proactive behaviors—but it starts with a basic philosophy, or “rules of the road.” 1. Managing your career is 100% your responsibility, and you need to act accordingly. Many promising professionals expect their superiors to mentor them, give them thoughtful coaching, provide them with challenging opportunities, and generally steer their development. Such a passive approach is likely to derail you at some point. While your superiors will play a role, your career is your own. 2. Be wary of conventional wisdom. It’s almost always wrong—for you. Hopping on the bandwagon may feel good initially but often leads to

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degree to which you put the interests of your company and colleagues ahead of your own. Excellent leaders are willing to do things for others without regard to what’s in it for them. They coach and mentor. They have the mind-set of an owner and figure out what they would do if they were the ultimate decision maker. They’re willing to make a recommendation that would benefit the organization’s overall performance, possibly to the detriment of their own unit. They have the courage to trust that they will eventually be rewarded, even if their actions may not be in their own short-term interest.

painful regrets years later. To reach your potential, you must filter out peer pressure and popular opinion; assess your own passions, skills, and convictions; and then be courageous enough to act on them. 3. Have faith that, although justice may not prevail at any given point in time, it should generally prevail over time. When you do suffer an injustice, you need to be willing to step back and objectively assess your own role in these events. That mind-set will help you learn from inevitable setbacks and eventually bounce back. It will also help you stay focused on issues you can control as well as bolster your determination to act like the ultimate decision maker.

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Being a leader also means being willing to speak up, even when you’re expressing an unpopular view. CEOs’ proposals often generate head nodding, even from people who secretly harbor serious reservations. In reality, most chief executives desperately want dissenting opinions so they can make better choices. While emerging leaders must use good judgment regarding the tone and timing of their dissent, they also need to be aware that they can hit a plateau by playing it safe when they should be asserting their heartfelt opinions. One CEO recounted to me his regrets over a recent key hire. His top three reports had each interviewed the various job candidates and expressed no major concerns about the final choice. After the new hire was on board— and had begun to struggle—it came to light that two of the three senior managers had privately held significant reservations but concluded that the CEO’s mind was made up and that speaking out was unwise. The CEO was furious. Though he recognized his own role in the mess (he vowed to more actively encourage dissent), he also lowered his opinion of the two executives who failed to express their views. Otherwise confident executives sometimes overestimate the career risk of speaking up and meaningfully under-estimate the risk of staying silent. I encourage people to develop various approaches to help them overcome this hesitancy: For example, I’ve counseled emerging executives to save their money to build financial security and to avoid getting too emotionally attached to their jobs. Though it may seem that you’ll never find another

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great job, you have to have faith that there are many attractive opportunities outside your firm. In some cases, I advise people to become experts in some specific business area in order to build their confidence. I also encourage people to spend more time deciding what they truly believe versus trying to guess what the boss might want to hear. At work, as in competitive sports, you must play with confidence and even a little abandon. I’ve talked to several executives whose finest moments came when they gathered their courage and confidently expressed disagreement with their boss and peers. To their surprise, they found that they were treated with more respect after these episodes. Most outstanding CEOs value emerging executives who assert themselves out of genuine concern for what is best for the company. Doing the right thing is a reward in itself—psychologically in the short run and professionally in the longer run. Of course, this approach requires that you have some reasonable level of faith that justice will prevail. I have seldom seen people hurt their careers by speaking up and appropriately articulating a well-thought-out contrary position (even when it was unpopular). However, I have seen many bitter and confused people who stalled their careers by playing it safe.

Every rewarding career will bring ups and downs, bad days, bad weeks, and bad months. Everyone will face setbacks and discouraging situations. Some people abandon their plans when they hit one of these bumps. They lose

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their way and ultimately undermine their own performance—and the wound is all the more painful because it is self-inflicted. The advice in this article is intended to help you avoid such self-inflicted wounds. There’s nothing anyone can do to prevent you from reaching your potential; the challenge is for you to identify your dream, develop the skills to get there, and exhibit character and leadership. Then, you need to have the courage to periodically reassess, make adjustments, and pursue a course that reflects who you truly are.

Robert S. Kaplan is the acting president and CEO of Harvard Management Company and a professor of management practice at Harvard Business School in Boston. He is also a former vice chairman of the Goldman Sachs Group.

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Chapter 4 Making Yourself Indispensable by John H. Zenger, Joseph R. Folkman, and Scott K. Edinger

A manager we’ll call Tom was a midlevel sales executive at a Fortune 500 company. After a dozen or so years there, he was thriving—he made his numbers, he was well liked, he got consistently positive reviews. He applied for a promotion that would put him in charge of a high-profile worldwide product-alignment initiative, confident that he was the top candidate and that this was the logical next move for him, a seemingly perfect fit for his skills and ambitions. His track record was solid. He’d made no stupid mistakes or career-limiting moves, and he’d had no run-ins with upper management. He was

Reprinted from Harvard Business Review, October 2011 (product #R1110E)

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stunned, then, when a colleague with less experience got the job. What was the matter? As far as Tom could tell, nothing. Everyone was happy with his work, his manager assured him, and a recent 360-degree assessment confirmed her view. Tom was at or above the norm in every area, strong not only in delivering results but also in problem solving, strategic thinking, and inspiring others to top performance. “No need to reinvent yourself,” she said. “Just keep doing what you’re doing. Go with your strengths.” But how? Tom was at a loss. Should he think more strategically? Become even more inspiring? Practice problem solving more intently? It’s pretty easy and straightforward to improve on a weakness; you can get steady, measurable results through linear development—that is, by learning and practicing basic techniques. But the data from our decades of work with tens of thousands of executives all over the world has shown us that developing strengths is very different. Doing more of what you already do well yields only incremental improvement. To get appreciably better at it, you have to work on complementary skills—what we call nonlinear development. This has long been familiar to athletes as cross-training. A novice runner, for example, benefits from doing stretching exercises and running a few times a week, gradually increasing mileage to build up endurance and muscle memory. But an experienced marathoner won’t get significantly faster merely by running ever longer distances. To reach the next level, he needs to supplement that regimen by building up com-

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plementary skills through weight training, swimming, bicycling, interval training, yoga, and the like. So it is with leadership competencies. To move from good to much better, you need to engage in the business equivalent of cross-training. If you’re technically adept, for instance, delving even more deeply into technical manuals won’t get you nearly as far as honing a complementary skill such as communication, which will make your expertise more apparent and accessible to your coworkers. In this article we provide a simple guide to becoming a far more effective leader. We will see how Tom identified his strengths, decided which one to focus on and which complementary skill to develop, and what the results were. The process is straightforward, but complements are not always obvious. So first we’ll take a closer look at the leadership equivalent of cross-training.

The Interaction Effect In cross-training, the combination of two activities produces an improvement—an interaction effect—substantially greater than either one can produce on its own. There’s nothing mysterious here. Combining diet with exercise, for example, has long been known to be substantially more effective in losing weight than either diet or exercise alone. In our previous research we found 16 differentiating leadership competencies that correlate strongly with positive business outcomes such as increased profitability, employee engagement, revenue, and customer

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satisfaction. Among those 16, we wondered, could we find pairs that would produce significant interaction effects? We searched through our database of more than a quarter million 360-degree surveys of some 30,000 developing leaders for pairings that resulted in far higher scores on overall leadership effectiveness than either attribute did on its own. The results were unambiguous. Take, for example, the competencies “focuses on results” and “builds relationships.” Only 14% of leaders who were reasonably strong (that is, scored in the 75th percentile) in focusing on results but less so in building relationships reached the extraordinary leadership level: the 90th percentile in overall leadership effectiveness. Similarly, only 12% of those who were reasonably strong in building relationships but less so in focusing on results reached that level. But when an individual performed well in both categories, something dramatic happened: Fully 72% of those in the 75th percentile in both categories reached the 90th percentile in overall leadership effectiveness. We measured the degree of correlation between overall leadership effectiveness and all possible pairings of our 16 differentiating competencies to learn which pairings were the most powerful. We also matched our 16 competencies with other leadership skills and measured how those pairs correlated with overall leadership effectiveness. We discovered that each of the 16 has up to a dozen associated behaviors—which we call competency companions—that were highly correlated with leadership excellence when combined with the differentiating competency. (For a complete list of the competencies and their companions, see the sidebar “What Skills Will Magnify My Strengths?”)

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Consider the main competency “displays honesty and integrity.” How would a leader go about improving a relative strength in this area? By being more honest? (We’ve heard that answer to the question many times.) That’s not particularly useful advice. If an executive were weak in this area, we could recommend various ways to improve: Behave more consistently, avoid saying one thing and doing another, follow through on stated commitments, and so on. But a leader with high integrity is most likely already doing those things. Our competency-companion research suggests a practical path forward. For example, assertiveness is among the behaviors that when paired with honesty and integrity correlate most strongly with high levels of overall leadership effectiveness. We don’t mean to imply a causal relationship here: Assertiveness doesn’t make someone honest, and integrity doesn’t produce assertiveness. But if a highly principled leader learned to become more assertive, he might be more likely to speak up and act with the courage of his convictions, thus applying his strength more widely or frequently to become a more effective leader. Our data suggest other ways in which a competency companion can reinforce a leadership strength. It might make the strength more apparent, as in the case of the technically strong leader who improves her ability to communicate. Or skills learned in developing the competency companion might be profitably applied to the main competency. A leader strong in innovativeness, for instance, might learn how to champion change, thus encouraging his team to achieve results in new and more creative ways.

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AN INFORMAL 360 Before you can build on your strengths, you need an objective view of what they are. Ideally, this comes from a formal, confidential 360-degree evaluation. But if that’s not possible, a direct approach can work. Try simply asking your team members, colleagues, and boss these simple questions, either in person or in writing. • What leadership skills do you think are strengths for me? • Is there anything I do that might be considered a fatal flaw—that could derail my career or lead me to fail in my current job if it’s not addressed? • What leadership ability, if outstanding, would have the most significant impact on the productivity or effectiveness of the organization? • What leadership abilities of mine have the most significant impact on you? Do your best to exhibit receptiveness and to create a feeling of safety (especially for direct reports). Make it clear that you’re seeking self-improvement. Tell your colleagues explicitly that you are open to negative feedback and that you will absorb it professionally and appropriately—and without retribution. Of course, you need to follow through on this promise, or the entire process will fail.

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Building Strengths, Step by Step As a practical matter, cross-training for leadership skills is clear-cut: (1) Identify your strengths. (2) Choose a strength to focus on according to its importance to the organization and how passionately you feel about it. (3) Select a complementary behavior you’d like to enhance. (4) Develop it in a linear way.

Identify your strengths Strengths can arguably be identified in a variety of ways. But we contend that in the context of effective leadership, your view of your own (or even some perfectly objective view, supposing one could be had) is less important than other people’s, because leadership is all about your effect on others. That’s why we start with a 360—as Tom did. Ideally, you should go about this in a psychometrically valid way, through a formal process in which you and your direct reports, peers, and bosses anonymously complete questionnaires ranking your leadership attributes on a quantitative scale. You and they should also answer some qualitative, open-ended questions concerning your strengths, your fatal flaws (if any), and the relative importance of those attributes to the company. By “fatal flaws,” we mean flaws so critical that they can overpower any strengths you have or may develop—flaws that can derail your career. Not every organization is able or willing to conduct 360s for everyone. So if that’s not feasible, you may be able to solicit qualitative data from your colleagues if—and this is a big caveat—you can make them feel

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comfortable enough to be honest in their feedback. You could create your own feedback form and ask people to return it anonymously. (See the sidebar “An Informal 360” for a suggested set of questions.) We have also seen earnest one-on-one conversations work for this purpose; if nothing else, they show your coworkers that you are genuinely interested in self-improvement. (Nevertheless, it’s unlikely that anyone will tell you directly if you have fatal flaws.) In interpreting the results, people commonly focus first on their lowest scores. But unless those are extremely low (in the 10th percentile), that’s a mistake. (We have found that 20% of executives do typically discover such a critical problem in their 360s; if you’re among them, you must fix the flaw, which you can do in a linear way.) What makes leaders indispensable to their organizations, our data unmistakably show, is not being good at many things but being uniquely outstanding at a few things. Such strengths allow a leader’s inevitable weaknesses to be overlooked. The executives in our database who exhibited no profound (that is, in the 90th percentile) strengths scored only in the 34th percentile, on average, in overall leadership effectiveness. But if they had just one outstanding strength, their overall leadership effectiveness score rose to the 64th percentile, on average. In other words, the difference between being in the bottom third of leaders and being almost in the top third is a single extraordinary strength. Two profound strengths put leaders close to the top quartile, three put them in the top quintile, and four put them nearly in the top decile.

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FIGURE 4–1

What difference can a single strength make? Raising just one competency to the level of outstanding can up your overall leadership effectiveness ranking from the bottom third to almost the top third.

PERCENTILE RANKING LEADERS WITH NO OUTSTANDING STRENGTHS

34 LEADERS WITH ONE

64 ...TWO

72 ...THREE

81 ...FOUR

89 ...FIVE

91

(See the figure “What difference can a single strength make?”) In this context, a look at Tom’s 360 results sheds light on the question of why he was passed over for a plum assignment. Tom had no critical flaws, but he hadn’t yet demonstrated any outstanding strengths either. With no strengths above the 70th percentile, he didn’t score “good,” let alone “outstanding,” in overall leadership ability. Anyone in the organization with a single notable strength

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was likely to outpace him for promotion opportunities. But if Tom could lift just a few of his relative strengths from the 70th to the 80th and then the 90th percentile, his overall leadership effectiveness might go from above average to good to exceptional. Clearly, those strengths merited a closer examination. Like many people, though, Tom was initially galvanized by the low bars on his chart, which evoked a mixture of guilt and denial. His relatively low score on building relationships called up uncomfortable memories of high school—something he didn’t mention as he looked over the results with his boss. But he did say that he couldn’t believe he wasn’t scored higher on innovativeness, and he started to tick off initiatives he felt he deserved credit for. Maybe he was innovative, and maybe he wasn’t. It’s common for your self-assessment to vary sharply from everyone else’s assessment of you. But remember that it’s others’ opinions that matter. When Tom did turn his attention to his strengths, he wasn’t surprised to see that he scored well in focusing on results and in solving problems and analyzing issues. Less obvious to him, and perhaps more gratifying, were his relatively high marks in developing strategic perspective and inspiring and motivating others. Now he could move on to the next step.

Choose a strength to focus on Choices between good and bad are easy. But choices between good and good cause us to deliberate and second-guess. It may not matter which competency Tom selected, since enhancing any one of them would

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WHAT SKILLS WILL MAGNIFY MY STRENGTHS? Our research shows that 16 leadership competencies correlate strongly with positive business outcomes. Each of them has up to a dozen “competency companions” whose development will strengthen the core skill. Character Displays honesty and integrity

• Shows concern and consideration for others • Is trustworthy • Demonstrates optimism • Is assertive • Inspires and motivates others • Deals well with ambiguity • Is decisive • Focuses on results Personal Capability Exhibits technical/professional expertise

• Solves problems and analyzes issues • Builds relationships and networks • Communicates powerfully and broadly • Pursues excellence (continued) 53

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(continued) • Takes initiative • Develops others • Displays honesty and integrity • Acts in the team’s best interest Solves problems and analyzes issues

• Takes initiative • Is organized and good at planning • Is decisive • Innovates • Wants to tackle challenges • Develops strategic perspective • Acts independently • Has technical expertise • Communicates powerfully and broadly Innovates

• Is willing to take risks and challenge the status quo • Supports others in risk taking • Solves problems and analyzes issues • Champions change 54

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• Learns quickly from success and failure • Develops strategic perspective • Takes initiative Practices self-development

• Listens • Is open to others’ ideas • Respects others • Displays honesty and integrity • Inspires and motivates others • Provides effective feedback and development • Takes initiative • Is willing to take risks and challenge the status quo Getting Results Focuses on results

• Is organized and good at planning • Displays honesty and integrity • Anticipates problems • Sees desired results clearly (continued) 55

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(continued) • Provides effective feedback and development • Establishes stretch goals • Is personally accountable • Is quick to act • Provides rewards and recognition • Creates a high-performance team • Marshals adequate resources • Innovates Establishes stretch goals

• Inspires and motivates others • Is willing to take risks and challenge the status quo • Gains the support of others • Develops strategic perspective • Champions change • Is decisive • Has technical and business expertise • Focuses on results

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Takes initiative

• Anticipates problems • Emphasizes speed • Is organized and good at planning • Champions others • Deals well with ambiguity • Follows through • Inspires and motivates others • Establishes stretch goals • Displays honesty and integrity Interpersonal Skills Communicates powerfully and broadly

• Inspires and motivates others • Develops strategic perspective • Establishes stretch goals • Deals effectively with the outside world • Is trustworthy • Involves others • Translates messages for clarity (continued)

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(continued) • Solves problems and analyzes issues • Takes initiative • Innovates • Develops others Inspires and motivates others

• Connects emotionally with others • Establishes stretch goals • Exhibits clear vision and direction • Communicates powerfully and broadly • Develops others • Collaborates and fosters teamwork • Nurtures innovation • Takes initiative • Champions change • Is a strong role model Builds relationships

• Collaborates and fosters teamwork • Displays honesty and integrity • Develops others

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• Listens • Communicates powerfully and broadly • Provides rewards and recognition • Practices inclusion and values diversity • Demonstrates optimism • Practices self-development Develops others

• Practices self-development • Shows concern and consideration for others • Is motivated by the success of others • Practices inclusion and values diversity • Develops strategic perspective • Provides effective feedback and development • Inspires and motivates others • Innovates • Provides rewards and recognition • Displays honesty and integrity Collaborates and fosters teamwork

• Is trustworthy • Builds relationships and networks (continued)

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(continued) • Practices inclusion and values diversity • Develops strategic perspective • Establishes stretch goals • Communicates powerfully and broadly • Displays honesty and integrity • Adapts to change • Inspires and motivates others • Develops others Leading Change Develops strategic perspective

• Focuses on customers • Innovates • Solves problems and analyzes issues • Communicates powerfully and broadly • Establishes stretch goals • Demonstrates business acumen • Champions change • Inspires and motivates others

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Champions change

• Inspires and motivates others • Builds relationships and networks • Develops others • Provides rewards and recognition • Practices inclusion and values diversity • Innovates • Focuses on results • Is willing to take risks and challenge the status quo • Develops strategic perspective Connects the group to the outside world

• Develops broad perspective • Develops strategic perspective • Inspires and motivates others • Has strong interpersonal skills • Takes initiative • Gathers and assimilates information • Champions change • Communicates powerfully and broadly

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markedly improve his leadership effectiveness. Nevertheless, we recommend that developing leaders focus on a competency that matters to the organization and about which they feel some passion, because a strength you feel passionate about that is not important to your organization is essentially a hobby, and a strength the organization needs that you don’t feel passionate about is just a chore. You can use your colleagues’ importance ratings from the 360 assessment to get a somewhat objective view of organizational needs. But the prospect of following his passions alarmed Tom, who didn’t know how to begin. Answering a series of questions made the notion more concrete. For each of the 16 competencies, he ran down the following list: • Do I look for ways to enhance this skill? • Do I look for new ways to use it? • Am I energized, not exhausted, when I use it? • Do I pursue projects in which I can apply this strength? • Can I imagine devoting time to improving it? • Would I enjoy getting better at this skill? Counting his “yes” answers gave Tom a solid way to quantify his passions. A simple worksheet showed him how his skills, his passions, and the organization’s needs dovetailed (see the sidebar “Narrowing Down the Op-

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tions”). When Tom checked off his top five competencies, his five passions, and the organization’s top priorities, he could see a clear convergence. He decided to focus on the strength that, as it happens, we have found to be most universally associated with extraordinary leadership: “inspires and motivates others.”

Select a complementary behavior People who excel at motivating others are good at persuading them to take action and to go the extra mile. They effectively exercise power to influence key decisions for the benefit of the organization. They know how to motivate different people in different ways. So it was not surprising that Tom already did those things pretty well. He scanned the list of competency companions: • Connects emotionally with others • Establishes stretch goals • Exhibits clear vision and direction • Communicates powerfully and broadly • Develops others • Collaborates and fosters teamwork • Nurtures innovation • Takes initiative • Champions change • Is a strong role model

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NARROWING DOWN THE OPTIONS The strength you focus on should be both important to the organization and important to you. A simple worksheet (like Tom’s, below) can help you see where your strengths and interests and the needs of your organization converge. Choose five competencies in each of the

TOTAL

ORGANIZATIONAL NEEDS

YOUR PASSIONS

YOUR COMPETENCIES

three categories.

1. DISPLAYS HONESTY AND INTEGRITY 2. EXHIBITS TECHNICAL/PROFESSIONAL EXPERTISE

X

1

3. SOLVES PROBLEMS AND ANALYZES ISSUES

X

1

4. INNOVATES

X

X

2

5. PRACTICES SELF-DEVELOPMENT 6. FOCUSES ON RESULTS

X

1

7. ESTABLISHES STRETCH GOALS 8. TAKES INITIATIVE

X

9. COMMUNICATES POWERFULLY AND BROADLY 10. INSPIRES AND MOTIVATES OTHERS

X

X

11. BUILDS RELATIONSHIPS 12. DEVELOPS OTHERS

X

13. COLLABORATES AND FOSTERS TEAMWORK

X

14. DEVELOPS STRATEGIC PERSPECTIVE

X

1 X

1

X

3

X

1 1 1

X

2

15. CHAMPIONS CHANGE 16. CONNECTS THE GROUP TO THE OUTSIDE WORLD

You should choose a companion behavior that, like a good strength, is important to the organization and makes you feel enthusiastic about tackling it. But at this point it’s also constructive to consider your lower scores. In talking these points over with his manager, Tom decided to work on his communication skills, which didn’t

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score particularly high but were high enough that raising them a little could make a significant difference.

Develop it in a linear way Having settled on a competency companion, Tom could now work at directly improving his basic skills in that area. Strong communicators speak concisely and deliver effective presentations. Their instructions are clear. They write well. They can explain new concepts clearly. They help people understand how their work contributes to broader business objectives. They can translate terms used by people in different functions. Tom saw lots of room for improvement here: No one would ever call him concise; he didn’t always finish sentences he’d started; and he found writing a challenge. We would have recommended that he look for as many opportunities as possible, both inside and outside work, to improve his communication. He could take a course in business writing. He could practice with friends and family, in his church or his community. He could volunteer to make presentations to senior management or ask colleagues to critique some of his memos and e-mails. He might volunteer to help high school students write college application essays. He could videotape himself making speeches or join a local Toastmasters club. Tom decided to seek the advice of a colleague whose communication skills he admired. The colleague suggested (among other things) that because writing was not a strong point, Tom should practice communicating more in person or over the phone. This turned out to be challenging: Tom found that before he could even begin,

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he had to change his approach to e-mail, because he was in the habit of constantly checking and replying to it throughout the day. He couldn’t always substitute the phone, because he couldn’t make calls while he was in a meeting or talking to someone else. He started to set aside specific times of the day for e-mail so that he could reply by phone or in person—a small change that had unexpected consequences. Instead of being interrupted and distracted at random moments throughout the day (and evening), his staffers had concentrated, direct interactions with him. They found these more efficient and effective, even though they could no longer choose when (or whether) to reply to Tom’s cryptic e-mails. Tom found that he connected better with people he talked to, both because his attention wasn’t divided between them and his BlackBerry and because he could read their tone of voice and body language. As a result, he absorbed more information, and his colleagues felt he was more attentive to their views. Tom also started to pay more attention not just to how he was communicating but to what he was saying. His colleague suggested that Tom start to keep track of how often he issued instructions versus how often he asked questions. Tom also took note of how much of what he said was criticism (constructive or otherwise) and how much was encouragement. Increasing the proportion of questions and encouragement had an immediate effect: His team began to understand him more quickly, so he didn’t have to repeat himself as often. Several team members actually thanked him for allowing them to express their points of view.

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Like Tom, you should expect to see some concrete evidence of improvement within 30 to 60 days. If you don’t, what you’re doing is not working. That said, complementary behaviors improve steadily with practice, and Tom’s progress is typical: Fifteen months later, on taking another 360, he found he’d moved into the 82nd percentile in his ability to inspire. He wasn’t extraordinary yet, but he was getting close. Our advice would be to keep at it—to improve another competency companion or two until he reaches the 90th percentile and becomes truly exceptional at inspiring others. Then he can start the entire process again with another strength and its complements, and another—at which point he will be making a uniquely valuable contribution to his company.

Can You Overdo It? Everyone knows someone who is too assertive, too technically oriented, too focused on driving for results. Many people cite examples like these to argue against the wisdom of improving your leadership effectiveness by strengthening your strengths. Our research does in fact show a point where balance becomes important. The data suggest that the difference between having four profound strengths and having five is a gain of merely 2 percentage points in overall leadership effectiveness. Thus leaders who are already exceptional should consider one more variable. You will note in the sidebar “What Skills Will Magnify My Strengths?” that the 16 differentiating competencies fall into five broader categories: character, personal capability, getting results, interpersonal skills, and leading

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change. People who have many strengths should consider how they are distributed across those categories and focus improvement efforts on an underrepresented one. But we cannot think of a less constructive approach to improving your leadership effectiveness than treating your strengths as weaknesses. Have you ever known anyone who had too much integrity? Was too effective a communicator? Was just too inspiring? Developing competency companions works precisely because, rather than simply doing more of the same, you are enhancing how you already behave with new ways of working and interacting that will make that behavior more effective.

Focusing on your strengths is hardly a new idea. Fortyfour years ago Peter Drucker made the business case eloquently in The Effective Executive: “Unless . . . an executive looks for strength and works at making strength productive, he will only get the impact of what a man cannot do, of his lacks, his weaknesses, his impediments to performance and effectiveness. To staff from what there is not and to focus on weakness is wasteful—a misuse, if not abuse, of the human resource.” Since then a body of work has grown up supporting and advocating for Drucker’s approach. Our own research shows how big a difference developing a few strengths can make. It is distressing to find that fewer than 10% of the executives we work with have any plan to do so. We are convinced that the problem is less a matter of conviction than of execution. Executives need a path to enhancing their strengths that is as clear as the one to

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fixing their weaknesses. That is the greatest value, we believe, of the cross-training approach: It allows people to use the linear improvement techniques they know and understand to produce a nonlinear result. Often executives complain to us that there are not enough good leaders in their organizations. We would argue that in fact far too many leaders are merely good. The challenge is not to replace bad leaders with good ones; it is to turn people like Tom—hardworking, capable executives who are reasonably good at their jobs—into outstanding leaders with distinctive strengths

John H. Zenger is the CEO, Joseph R. Folkman is the president, and Scott K. Edinger is the executive vice president of Zenger Folkman, a leadership development consultancy. They are the authors of The Inspiring Leader (McGraw-Hill, 2009).

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Chapter 5 Why You Didn’t Get That Promotion by John Beeson

You’ve been passed over for a key promotion despite stellar results and glowing reviews. You’ve asked where you’re falling short, but the responses have been vague and unsatisfying, leaving you angry, frustrated, and unsure of how to get ahead. Promotion decisions seem arbitrary and political. What’s going on? In most organizations, promotions are governed by unwritten rules—the often fuzzy, intuitive, and poorly expressed feelings of senior executives regarding individuals’ ability to succeed in C-suite positions. As an aspiring executive, you might not know those rules, much less the specific skills you need to develop or demonstrate

Reprinted from Harvard Business Review, June 2009 (product #R0906L)

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to follow them. The bottom line: You’re left to your own devices in interpreting feedback and finding a way to achieve your career goals. That’s what happened to Ralph Thomas, the vice president of operations for Smith & Mullins’s industrial products division, the company’s largest operating group. (All names and identifying details in this article are disguised.) He wasn’t blindsided by the announcement that Kelly Ferguson had been promoted to senior vice president and general manager for corporate markets—he’d been informed the week before. But Ralph had been a contender, and this was the second time in four years he’d missed out on a division GM job. The first time, Smith & Mullins had hired an outsider who later left the position for a major role at a rival firm. Ralph always had excellent performance reviews. His 360 results indicated that people loved working for him, and as far as he could tell, managers across the company were beating down the doors to join his group. In terms of execution, his track record was flawless: He and his team had met or surpassed their numbers in each of the past five years. Additionally, they had successfully implemented every major corporate program during that time, and his division had recently been selected to serve as the pilot site for an SAP installation. When he’d learned of these last two GM assignments, he’d also been told that he had a great future with the company and that with a little “seasoning,” he’d be ready for advancement. He’d tried several times to get the real scoop on why he hadn’t been promoted, only to hear vague comments about improving his “communication skills” and demonstrating

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more “executive presence” and “leadership.” It seemed to him that the company valued people who could look and sound good in the boardroom more than it cared about the year-over-year results of proven performers like himself. As for Kelly? She’d hired some top people in the past couple of years, but Ralph knew that she had a reputation for being tough on her reports and having “sharp elbows.” To Ralph, the promotion wasn’t much of an expression of the company’s leadership competency model, posted on his office wall: “Display ethics and integrity, envision the future, deliver results, focus on customers, engage in teamwork and collaboration, and develop talent.” Ralph bore Kelly no ill will, but it looked as though it was time to update his résumé and rekindle some relationships in his network. Distasteful as it was, testing the job market seemed to be the only way to advance.

The Unwritten Rules Ralph’s situation is surprisingly common, especially among people who aren’t politically inclined. Few organizations spell out the criteria for advancement. Though Ralph had been considered for the GM role both times, in each instance there were bona fide concerns about his readiness. The vague feedback about his communication skills actually alluded to tensions with peers in other units: He could be overly competitive and slow to resolve conflict, whereas Kelly’s powers of persuasion allowed her to manage discord and achieve superior results. She was also known for developing talent. Working for her was not for the faint of heart, but she

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challenged her staff members, and they grew in the process. Ralph didn’t recognize that his popularity reflected, in part, his reputation for being a little easy on people— he didn’t stretch them to grow and develop. Managers flocking to his unit were often B players who knew he’d cut them some slack. He was luring talent that was good but not great; Kelly was attracting A players who wanted a push. The company’s competency model included “develop talent” but didn’t specify that having a track record for doing so was nonnegotiable for anyone who wanted to rise beyond Ralph’s level. Under the heading of “leadership” lurked questions regarding Ralph’s strategic thinking. He was a go-to guy for implementing corporate initiatives, a master of continuous improvement. But senior management had seen no evidence of his ability to conceive a large-scale change that would produce a quantum leap in performance. Can strategic thinking be developed? That’s open to debate, but the fact was that Ralph had always worked for visionaries who never gave him the chance to flex his own strategic muscles, a problem everyone had overlooked. The information void wasn’t a matter of malice; rather, it was due to assumptions that nobody thought to make explicit and an all-too-human reluctance to deliver bad news. Managers and HR professionals often provide intentionally vague feedback for fear of losing a good employee. Further, although most leadership competency models refer in some way to important management skills and attributes, they typically fail to distinguish nice-to-have from nonnegotiable skills.

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What’s more, such models usually don’t spell out how leadership skills should be demonstrated at different levels or how the relative importance of those qualities will change as you rise in the hierarchy. For example, in middle management, teamwork—defined as the ability to maintain cohesion and morale within one’s group—is a vital competency. At higher levels, where Ralph hopes to play, it matters less. In fact, at most companies, cohesion tends to fall short at senior levels thanks to rivalry and ego, but teams function pretty well nonetheless. Acquiring and developing talent is the executive’s imperative, and teamwork becomes a nice-to-have. Ralph’s ability to orchestrate well-functioning teams to complete complex projects, among other skills, had singled him out for previous promotions. But when he was being considered for the GM jobs, strategic thinking became a much higher priority. Many of the unwritten rules are especially hard to nail down because they don’t pertain to technical ability, industry experience, or business knowledge. Rather, they relate to the “soft” skills that combine to give decision makers an intuitive sense of whether a candidate will succeed at the senior level. And, as predictable career paths become more or less extinct, the confusion for people seeking advancement just gets worse. In my 30 years of experience in and observation of succession planning and executive development at large companies, I’ve found that the unwritten rules of C-suite placement decisions fall into three categories. Nonnegotiables are the fundamental factors without which

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an executive will not be considered for promotion. Deselection factors are characteristics that eliminate an otherwise qualified candidate from consideration. Core selection factors are what ultimately dictate promotion decisions. The sidebar “Key Factors in Executive Career Advancement” shows the model I’ve developed for senior managers. The factors may differ at your company, but the ones highlighted in the sidebar are pretty typical. Ralph passes the test on the nonnegotiables and the deselection factors but falls short on several core selection factors, like thinking strategically, building a strong executive team, and having the organization savvy to work effectively across internal boundaries. If Smith & Mullins made a list of such factors available to its executives, along with a dose of constructive feedback, Ralph would probably be able to see where he needs to devote his energies. But since it doesn’t, Ralph has to tease out the underlying issues. Although he periodically gets feedback from 360s, such reviews—unless combined with confidential face-to-face interviews by a third party—are rarely sufficient to illuminate the core reasons behind a stalled career. One obvious way to get insight is to approach your boss and colleagues directly for their opinions, though their input might be of limited use. They may not be straight with you, and their perspectives may differ from those of the most senior decision makers. For additional information, you might have a conversation with your former manager or your boss’s boss. Try to contact the highest-level manager who is knowledgeable about your

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work and with whom you have a positive relationship, so your approach seems natural and appropriate. (Caveat: Don’t go behind your boss’s back. He or she should know about any contact with other executives and what your intentions are.) For the reasons stated earlier, you’ll probably have to dig a little to get useful information. That’s not easy, so let’s take a closer look at how you can go about having a truly constructive conversation.

How to Ask, How to Listen Getting past executives’ reluctance to provide direct and difficult feedback is tricky. When asking for input, project a sincere desire to understand what’s holding you back— and avoid appearing to lobby or argue. Your core question should be “What skills and capabilities do I need to demonstrate in order to be a strong candidate for higher levels of responsibility at some point in the future?” Get into active-listening mode. Any comment or body language that conveys defensiveness will most likely cause the other person to either clam up or move the conversation to easier (and vaguer) territory—such as the need for more “seasoning” that Ralph kept hearing about. Ask clarifying questions, but don’t challenge the content. (You can attempt to correct factual errors with the right person later; this isn’t the time.) Be alert to code words and phrases masking fundamental issues—general observations about the need for “increased leadership ability” or “better teamwork” or “improved communication.” For instance, a manager I’ll call Terry was told by her boss that she needed to improve her leadership skills before she’d be eligible for her next promotion. She was

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KEY FACTORS IN EXECUTIVE CAREER ADVANCEMENT Nonnegotiables Factors that are absolutely necessary for you to be a contender • Demonstrating consistently strong performance • Displaying ethics, integrity, and character • Being driven to lead and to assume higher levels of responsibility Deselection Factors Characteristics that prevent you from being considered as a serious candidate • Having weak interpersonal skills • Treating others with insensitivity or abrasiveness • Putting self-interest above company good • Holding a narrow, parochial perspective on the business and the organization Core Selection Factors Capabilities that breed others’ confidence in your ability to succeed at the senior executive level

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• Setting direction and thinking strategically; spotting marketplace trends and developing a winning strategy that differentiates the company • Building and continually upgrading a strong executive team; having a “nose for talent”; establishing an adequate level of team cohesion • Managing implementation without getting involved at too low a level of detail; defining a set of roles, processes, and measures to ensure that things get done reliably • Building the capacity for innovation and change; knowing when new ways of doing business are required; having the courage, tolerance for risk, and change-management skills to bring new ideas to fruition • Getting things done across internal boundaries (lateral management); demonstrating organization savvy; influencing and persuading colleagues; dealing well with conflict • Growing and developing as an executive; soliciting and responding to feedback; adjusting leadership style in light of experience

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managing multiple initiatives, and her teams were functioning effectively; she didn’t see how to improve her leadership except by taking on more projects. Fortunately, she had worked for her boss’s manager earlier in her career and could set up a meeting. In a series of probing questions, she asked the manager to help her define what “better leadership” would be in her case. She discovered that in her dedication she in fact had been doing herself a disservice. She’d been given an ever-increasing number of projects because of her superior organizational and people-management skills and her ability to stay on top of details. However, senior managers were concerned that she was maxed out by her personal involvement in every initiative and wanted to see that she could delegate more and create processes and systems that would ensure flawless execution without so much direct supervision. In response she put considerable effort into rethinking how she spent her time: which issues she should be involved in personally, which she could—with some coaching—learn to delegate to others, and what kinds of meetings and reports would allow her to stay as close to projects as was needed. She revamped her team’s staff meeting and the level of preparation required. She also designated a direct report as chief of staff to follow up on deadlines and alert her to situations that required her intervention. Terry admits that it was initially difficult to extricate herself from the details on some projects and confesses to poring over the status reports submitted by the staff. But with practice she got better at let-

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ting go. A year later she was promoted to lead a large operational unit. Things don’t always work out so well. Ed, a highly proficient finance manager, had advanced quickly because of his technical knowledge but recently missed out on several key promotions. His boss told him not to worry, everything was fine. Still, Ed met with his unit’s HR manager, who advised him to improve his communication skills. This confused him; he took pride in his ability to write and speak clearly and devoted a lot of time to communicating with his staff. At the suggestion of the HR manager, he met with three peers to get their opinions. All three were hesitant to offer their opinions until Ed probed specifically for examples of poor communication on his part. It turned out that he was right; his basic communication skills were fine. Rather, the underlying issue lay with his ability to listen and to be flexible. Colleagues complained that he tended to get locked into his own opinions, that he lacked openness to other perspectives and shut down creative alternatives. Some considered him arrogant. Overall, his peers recommended that Ed spend more time discussing his plans with them and soliciting input. Unfortunately, Ed saw this as “politics” and energy that would be diverted from getting things done. Exacerbating the situation was the fact that Ed’s boss was encouraging him to drive the implementation of a new corporate policy that Ed’s peers found onerous. When his boss took a new position within the company, Ed suddenly felt vulnerable. Using his extensive industry network, he

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quickly found another position with a well-regarded firm but ended up leaving his new job after only nine months. The official reason was that Ed was not a cultural fit in a highly collaborative environment. In reality Ed’s peers at the new company complained that he was a know-it-all who tried to sell major initiatives to his boss without taking the time to understand how the organization worked and what internal customers needed.

If you are having trouble decoding the feedback you receive, try asking at the end of each session, “What one or two things—above all others—would most build confidence in my ability to succeed at higher levels within the organization?” As long as the other person answers honestly, this question tends to circumvent vagueness and separate the wheat from the chaff. Keep in mind that changing deep-seated perceptions about you, formed over years, requires visible and consistent effort—which is why it is typically best to focus on one or two key areas of development. Think through whether your current position provides you with a platform to demonstrate needed skills. Ralph, for instance, may need to move to a position where his breakthrough thinking isn’t preempted by a visionary boss. Alternatively, he may find ample opportunities to exhibit strategic thinking in his current role—if he is aggressive and creative in pursuing them and his boss gives him room to experiment. Although this type of development isn’t easy, the payoff can be huge for both the individual and the organi-

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zation. Employees like Ralph learn what’s really holding them back, and companies like Smith & Mullins get a deeper and better bench.

John Beeson is the principal of Beeson Consulting, which specializes in succession planning, executive development, and organization design. He is based in New York.

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Section 3

Growth and Advancement

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Chapter 6 Finding the Right Mentors by Diane Coutu

If you’re waiting for a wise, dedicated mentor to recognize your potential and lead you down the yellow brick road to happiness and fortune, you’ll be waiting a long time—and even then you’re likely to be disappointed. To exploit your opportunities to grow and move ahead in your work and your life, your best bet will always be to take matters into your own hands and seek out the people who can help you. Before you decide which ones to turn to, though, you’ll have to figure out what kinds of mentors will best meet your needs. In my own long experience on both sides of the mentoring relationship, I’ve come across three distinct types:

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The co-mentor: This can be anyone—a peer, a colleague, a friend—who needs you as much as you need him A relationship between equals, co-mentoring is rooted in the desire for skill or knowledge exchange. For that reason, it’s often more short-lived than a top-down mentoring relationship. It dissolves when both parties have achieved their goals. When people co-mentor each other, they typically want to learn something very specific: They may want to become proficient in a software program, for example, or better at speaking a foreign language. My colleague David and I co-mentored each other years ago as senior editors at Harvard Business Review. We had a number of things in common: He was European; I had lived in Europe for 20 years. We had both studied at Oxford University and had lived in Germany. But it was what we didn’t share that brought us into our co-mentoring relationship. He had an MBA and was a banker; I had studied literature, philosophy, and psychology and was a journalist. He understood business strategy and finance and could write case studies; I understood leadership and organizational development, and I knew how to report on those topics. We both came to our senior editor positions at HBR with significant strengths—but we also had deep holes in our knowledge and capabilities. Together, though, we were a cohesive whole. We moved into the same office and worked at the same computer, sometimes with four hands on one keyboard, teaching each other how to develop HBR articles. We

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Find a co-mentor if... • You have a specific skill to learn. • You have something to teach in return. Find a remote mentor if… • You need a fresh perspective. • You’ve exhausted mentoring resources closer to you. Find an invisible mentor if… • You can’t find a co-mentor or remote mentor to provide the right guidance or support. • You can get what you need learning by example, with no interaction.

became increasingly productive as we learned more about editing and more about each other’s skills. Our comentoring relationship lasted about a year and a half, and during that time we learned how to succeed on our own as generalists. Although we remained good friends and continued to offer advice on each other’s articles, we’d become self-sufficient. The co-mentoring had served its purpose—ending it was the right thing to do. Though chances are good you can’t move into the same office as your co-mentor, you can set the stage for your own meaningful give-and-take in other ways. Try meeting

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regularly for a working breakfast or lunch, for example, or scheduling video chats on Skype—a medium that’s conducive to hands-on teaching and learning because your computer and files are right there while you’re using it.

The remote mentor: This is someone outside your organization who can offer a fresh perspective and objective advice Though mentors from your company can be invaluable, given their familiarity with the culture and the key players, certain needs are best served by outside, or “remote,” mentors. Suppose your unit needs to downsize, and you have to decide which people to keep on staff when there isn’t any dead weight to shed. If the senior managers you work with are short on creative ideas for solving the problem because it’s the first time they’ve faced it, you may want to consult with someone who has orchestrated a successful reorg at another company altogether. Or say you’re being groomed to lead your department or unit, and everybody knows it. You’ve got a lot of important learning to do, but people may not be open with their feedback, even when you ask for it directly. Sometimes they bite their tongues or, worse, stroke your ego, afraid that anything they say now might count against them when you take the reins. Look for one or more mentors on the outside to get you up to speed on setting agendas, building teams, delegating, and other senior management skills. Remote mentors can be family members, friends, old college professors—anyone in another company or another industry. They can even be strangers.

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That was the case with a mentor I’ll call Jon. When I was 35, on leave from the Wall Street Journal Europe, I decided to work on a short memoir about being a pioneering woman in the 1970s. I had never taken a creative writing course, had never published anything besides journalistic articles, and had nothing but hope—and stories—to fuel my efforts. Though I had the discipline to write every day, I knew I needed instruction in the craft of creative nonfiction: How do you tell a compelling personal story that will resonate for others? How much detail is too much? How do you avoid the narcissistic traps that so many memoir writers fall into? Living in Brussels at a time before there was much remote learning going on in universities, I didn’t have ready access to the relevant courses in English. I had also exhausted the other mentoring resources around me. So I sought out writers who shared my interest in psychology, writers whose creative work I admired. I read biographies and narrowed my search to authors whose backgrounds and sensibilities intersected with mine. After poring over their letters, essays, fiction, and whatever else they had produced, I sat down and sent out 15 customized letters asking for help. Because my search was so targeted, it was very successful—every writer responded. Two offered to work with me through correspondence. I chose Jon for his sense of humor, and so our remote mentoring relationship began. We never met; we never spoke on the phone. But we exchanged letters almost every week. I sent him pages of prose, which he marked up in red, teaching me about voice and pacing and segues from scene to scene. Even

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after I finally had a decent manuscript, Jon and I continued our correspondence until he died a few years later. The relationship was remote in the truest sense: He wrote to me only after I wrote to him. The advice was never unsolicited or paternalistic, and it was always in direct response to a question I had asked. In return, he asked me to critique his published works. I offered as much constructive criticism to him as he had to me—and in doing so, I honed a skill that was essential to my work as an editor both at McKinsey & Company and Harvard Business Review: giving honest, sometimes tough, feedback to authors.

The invisible mentor: This is someone you learn from with little or no direct interaction Choreographer and dancer Twyla Tharp knew that George Balanchine, the larger-than-life artistic director of the New York City Ballet, was the person she would learn from the most, structurally and musically. They met only three times—he didn’t teach open classes, so she couldn’t simply sign up for one—yet he served as her invisible mentor for 20 years. As Tharp explained when I interviewed her for an HBR article: “I mentally parked him in the corner of my studio, and the insistence on thoroughness that I saw in him became my standard.” A mentor like that doesn’t have a personal relationship with you but can be crucial to your development. Invisible mentors may be unresponsive or deceased, or even authors of books that speak to you. “When someone asks me how to find a mentor,” Tharp told me, “I tell them, ‘Just go to Barnes & Noble and pull down a book

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from a shelf—pick out a writer, pick out a thinker. Pick out somebody who can teach you something.’” History is filled with people who turned to books for their mentoring. John F. Kennedy read Winston Churchill; Bill Clinton read Kennedy. My literary mentor is Emily Dickinson. At every stage of my life, she’s had something to offer—whether I was studying the Holy Ghost in the fourth grade or struggling to understand human psychology when I was 30. I identified with Dickinson because she was an utterly free thinker. Her belief about the role of women in society was as complex and unconventional as she was. But above all she was a brilliant writer—someone who kept reaching out for mentors, and who kept writing to them, even though they didn’t help her find success (in the traditional sense) during her lifetime. When I tried my own hand at writing, she provided inspiration, wisdom, solace, and companionship. So how can you choose your own invisible mentors? Think about the leaders, thinkers, entrepreneurs, inventors, artists, athletes, and others at the top of their game who move you. Why do they move you? Is it because of their craftsmanship? Their drive to excel? Their creativity? Their integrity? That “why” will shine a light on values and talents they can, by example, help you cultivate.

No matter what type of mentoring relationship you’re in, it must have clear boundaries. You can deliberately draw and observe them, or the situation (a firm deadline, for instance) may force them. Either way, you need sharp

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lines to keep you out of murky personal territory: If you start expecting intimacy from your mentor, for example, or looking at him as the father you never had, you’re headed for trouble and disappointment. That said, feeling connected is key—whether it’s with a co-mentor, who benefits from the relationship as much as you do; a remote mentor, who interacts with you thoughtfully but from a distance; or an invisible mentor, who has no idea you exist but calls out to you all the same. “Clicking” with someone you look up to empowers and motivates you to do your best work. Sometimes that matters even more than expertise.

Diane Coutu is the director of client communications at Banyan Family Business Advisors. She also mentors high school students through the college application process.

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Chapter 7 Defining Your Goals and Expectations To set your mentoring relationship up for success, you have to decide what exactly you want to learn. “Do you want technical or strategic expertise?” asks Leslie Camino-Markowitz, director of Next Generation Leadership Development Programs at Agilent Technologies. “Cultural awareness of how business is done? Perhaps expertise in Asia?” How do you come up with your objectives? Try using the following questions to guide your thinking. 1. What do you really want to be and do? Examine not only your business goals but also your driving passions in life. Adapted from Harvard Management Update, March 2008 (product #U0803B), and from content posted on hbr.org on March 25, 2009

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2. What are you doing well that will help you get there? Which core strengths will best serve you? Your ability to lead and motivate your staff? Your careful management of detailed operations? 3. What are you not doing well that will prevent you from getting there? Take an honest look at the roadblocks, challenges, or weaknesses that are slowing you down. 4. What will you do differently tomorrow to meet those challenges? When you practice your tennis, do you tend to favor your forehand? How will you start giving your professional “backhand” the attention it requires? 5. Where do you need the most help—and who can provide it? Now that you’ve worked your way through the previous questions, you’re ready to articulate your goals for the mentoring relationship and map them to potential mentors who have the strengths, relationships, and resources to help you. Stick to four or five goals for the relationship. If you include more than that, you’ll have trouble taking in what your mentor has to offer. And be sure to spell them out for the person who agrees to mentor you. Steve Trautman, author of Teach What You Know: A Practical Leader’s Guide to Knowledge Transfer Using Peer Mentoring (Prentice-Hall, 2006), tells an all-toofamiliar story about what happens when you don’t:

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Ross and Julie are a mentor/protégé pair who have worked together for six months with little progress. They started down this road because one day, their boss had told Ross, “Hey, you should be Julie’s mentor.” Both Ross and Julie are often out of the office at meetings. They never sat down to clarify [expectations], such as when and how often they would meet and who would set up those conversations. Ross and Julie’s boss did not define the skills that Ross should teach Julie or even topics of conversation. Julie was worried about bothering Ross, and Ross did not want to presume Julie needed help.

If Julie had gone to her boss for more detail on which challenges he thought Ross could help her with and taken the time to assess her own goals for learning and growth, she could have roughed out a game plan with Ross. That small but crucial bit of direction would have led to a more focused and fruitful relationship.

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Chapter 8 Starting and Maintaining Relationships with Mentors by Lew McCreary

Years ago, I failed to go out and get the mentoring I needed. I was then in the midst of my first magazine launch. I had always worked on the editorial side of the company, with little exposure to sales and marketing. Nonetheless, I claimed for myself the grand dual title of editor in chief and publisher—wanting a stake in the magazine’s business future, not just its content. My boss, despite some skepticism, indulged me. But soon enough, I recognized that I was in over my head and would benefit from the guidance of someone with sales acumen and objective distance from my business unit’s maverick

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culture. I even picked out an especially good candidate: a seasoned executive from another unit who had a strong track record on the commercial side and a firm grasp of editorial values and practice. Many times I came close to asking him to mentor me, confident he would agree to it. However, something always stopped me: I’d been given responsibilities that exceeded my experience—and, I feared, my abilities. That’s not uncommon, of course. Throughout our careers, we must stretch and grow. I just wasn’t sure I wanted to admit to anyone that I felt overwhelmed by the challenge. Would others start doubting me the way I secretly doubted myself? And if I did start a mentoring relationship with my executive of choice, how candid could I safely be about my colleagues, up to and including my boss? If you’re on the verge of reaching out to a mentor, you’ll face difficult questions like these. The risks are real, but don’t let them stymie you as they did me. Instead, keep them in check with a few ground rules for establishing and maintaining a strong, productive mentoring relationship.

Getting It Going Here are some principles that will help you get started whether you’re creating your own mentoring experiences from scratch, as many of us have to do, or participating in a formal program.

Selecting appropriate mentors The first hurdle is picking the right people to guide you. If your company has a formal program, you may have a ros-

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ter of mentors to choose from. If it doesn’t, you’ll need to narrow the field yourself. (See “Finding the Right Mentors” by Diane Coutu.) As you consider colleagues and people outside your unit or company, look for someone with experience that suits your goals. The executive I nearly asked for mentoring had mastered the trick I wanted to learn: transitioning into the publisher role. But a mirror image isn’t always the best choice. Sometimes difference is more valuable than similarity. For example, in my more recent career, I mentored someone from the sales function. He was seeking a better understanding of the editorial operation and of the larger company culture, which I had lived in and helped shape for more than 15 years. Ideally, you’ll figure out early on whether you and your mentor are well matched. But even if it takes you awhile to conclude you’re not (we often suspend disbelief about initial impressions that prove truer than we’d hoped), cut bait as soon as you figure that out. Hanging on will just be a waste of your time—and your mentor’s.

Getting to know your mentor Once you’ve sized up your mentoring needs and identified the right person (or people) to help you meet them, there’s plenty yet to do. Kicking off a relationship may take more time and effort than you’d think. Michael Kohlman, an IT executive at a medical device manufacturer, says he and his mentor devoted their first three sessions last year to “getting an understanding of who we both were and what I wanted and needed.” Why did their preliminary work take so long? In part because they were interacting remotely, via tele-

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conference, e-mail, and the occasional webcast. “With a long-distance relationship, you lose a number of the cues we take for granted in face-to-face communication,” Kohlman says. “That doesn’t mean a distance-based relationship can’t work, but it does require more up-front investment.” But even if you’ve got proximity going for you, starting a mentoring relationship involves sharing and discovery on both sides, which may take a couple of sessions. Kohlman and his mentor—a long-tenured CIO—found they had much in common. Both had specialized in IT infrastructure and operations, and both had spent most of their careers in life-sciences companies. That gave them a lot to talk about—time well spent, in Kohlman’s view. Still, there are some shortcuts worth considering. Before you begin your mentoring sessions, you may want to complete the Myers-Briggs Type Indicator or some comparable personality assessment, if you haven’t already done so. I’ve worked with business coaches who use such tools to help them understand their clients (and help the clients understand themselves). Why not apply them in your mentoring relationship? The results can give you and your mentor quick insight into your strengths and preferred styles of work, collaboration, and leadership. When you meet, you can say, for instance, “I’m an INTP” (it stands for Introversion, Intuition, Thinking, and Perceiving). If it’s been awhile since your mentor has visited the Myers-Briggs website (www.myersbriggs.org), remind her what INTP means: You’re interested more in ideas than in social interaction, you’re flexible and adaptable, you’ll focus

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deeply on whatever problems you are called on to solve, and you’re skeptical by nature. If you have concerns about entering the relationship, air them at the start. You might want to begin with confidentiality, the big mental hurdle that kept me from enlisting a mentor. Productive mentoring demands candor— admitting your mistakes and revealing your fears, doubts, and limitations. You’ll need the mentoring equivalent of the Las Vegas Rule: What happens there stays there. Confidentiality has to be an explicit covenant. Don’t leave it to your mentor’s good judgment not to let it slip to your boss that he’s helping you conquer your morbid fear of delivering presentations to the executive committee. The discretion should be mutual. Your mentor might want the freedom to disclose to you details of business life that are, strictly speaking, some distance above your pay grade. If he doesn’t bring this up, raise it yourself. You’ll learn more from your mentor if he knows you’re not someone who talks out of school. You can also speed up the getting-to-know-you process by bringing to one of those early sessions a list of recent situations that have caused you difficulty. Pick examples that speak to your mentoring objectives. For instance, if you need help in managing up, you should probably recount yesterday’s contentious conversation with your boss about budgeting for expensive advanced encryption software to secure corporate information stored in the cloud. Much as your boss loves the idea of the cloud, he’s less keen on the cost of making it work. Ask your mentor for advice: How can you get your boss to trust—not micromanage—the routine recommendations you make?

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Such concrete examples are like case studies, only better: They’ll ground your mentoring conversations in the very reality you’re trying to improve. Extract from them three to five key areas where you need to develop expertise or comfort.

Creating milestones After articulating your goals, you’ll need to chart a clear path to get where you’re going. Work with your mentor to create milestones—they’ll give your plans direction and, just as important, help you measure your progress. Shelley Lineham, a senior IT director at a large energy retailer, finds them essential to making headway in both formal and informal mentoring environments. Without milestones, she says, “it’s not so clear where you started, what you got out of the relationship, and how that benefited you at the end.” Lineham actually prefers formal programs because they often provide basic milestones that you can then tailor to your needs. But if you’re on your own, map out your mentoring in much the same way you’d manage a large project—by breaking your goals into manageable, measurable chunks. To expedite the process, try drafting a list of milestones yourself and then asking your mentor for feedback. Say your goal is to become better at internally marketing the work of your crack SWAT team of process innovators. Identify ways to show your mastery of discrete areas of marketing competency: for example, creating metrics that capture the speed with which your team goes from concept to delivery of a newly designed process; developing outreach initiatives, such as rapid-

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prototyping demonstration sessions, to build demand for the team’s services; publishing the internal equivalent of a marketing brochure for your team; and delivering a PowerPoint presentation of ROI case studies at an allhands business-unit meeting. Lineham advises building in checkpoints for reflecting on what you’ve gained by achieving each milestone. Step back and ask yourself whether the milestones in front of you still make sense and build on what you’ve already accomplished. As you’re charting your path, you’ll also need to agree on its length. Work with your mentor to determine a time frame for achieving your goals. The notion of an openended relationship may be appealing if you have a lot to learn—but you and your mentor will both find it easier to stay productive with a time commitment that’s reasonably clear from the outset. You can always reassess your projected end point after you’ve hit a few milestones.

Sorting out logistics One more way to set the stage for mentoring success is attending to logistics: If you hate the telephone, try to arrange in-person meetings. If your energies are at low ebb late in the day, aim for morning sessions. These details may seem small, but they affect the quality of the exchange. Defer, of course, to your mentor’s preferences. She’s more likely to give you time and attention if the arrangement is convenient and comfortable for her.

Keeping It Going Now that you’ve established your expectations for the relationship, you’re ready to make progress—and measure

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it. The milestones you’ve agreed on will keep you honest and help you get value from your mentoring over time. But you’ll need more than that to maintain your momentum.

Providing structure To keep the mentoring relationship going, you’ll need structure—and it’s up to you, the mentee, to supply it. Set up regular meetings with agendas so your conversations won’t degenerate into aimless bull sessions, where the mentor holds forth on the triumphs of a sparkling career. Base your agendas on an overall plan—for example, “I want to develop, put forward, and win leadership approval for one entrepreneurial idea within the next year”—and make sure each meeting moves you closer to your objective. Formal programs’ processes can add structure and help you stay focused and motivated. Shelley Lineham joined a yearlong program called Pathways—an offering of the CIO Executive Council, which caters exclusively to IT professionals’ career development. (Michael Kohlman is also a participant. See the sidebar “Formal Mentoring Programs” for a description of his Pathways experience.) The program’s structure helped Lineham push herself to tackle one of her main goals: balancing her personal life with the growing demands of work. Pathways provides mentees with a menu of activities and resources—including participation in webcasts, seminars, discussion boards, and professional groups. Lineham took full advantage of these suggestions. Her mentor encouraged her to join Women in Technology In-

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ternational (WITI), a group dedicated to helping women achieve their potential in a field long dominated by men. She attended both online and in-person events, and learned through discussions with other participants how they’ve managed to meet the demands of a career in IT while maintaining life balance. Seek only enough structure to keep yourself fully engaged and making progress—and not so much as to stifle spontaneous exploration. Allow room to go in unexpected directions when circumstances warrant—for instance, when an opportunity or crisis presents itself, and your mentor can help guide you through it. Also, make time in each meeting for a “news of the week” segment, where you recount one or two anecdotes that show progress on your goals or highlight challenges that keep tripping you up.

Expecting rigor Beware of mentoring that demands too little of you: If your mentor isn’t providing regular assignments that sync up with your overall plan, ask for them, and work them into your agendas. They’ll keep you moving toward your goals. I once suggested that a mentee—someone eager to rise into the senior editorial ranks at a magazine—should volunteer to lead a special project. He would need to work with the art director to create a feature article that told its story graphically rather than mainly with text. He took to the assignment with gusto and executed it so well that such projects expanded his portfolio of skills, eventually helping him land the opportunity he was seeking.

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FORMAL MENTORING PROGRAMS Even if you’ve acquired effective mentoring on your own, there’s still much to gain from a formal program. Does your company lack an in-house offering? Try an external one. Career-development consultancies and professional associations are great places to look for mentoring that fits your industry and job function. Just ask Michael Kohlman, an IT executive for The Cook Group, a highly entrepreneurial medical technology company. With its strong culture of self-reliance, Cook offers no formal leadership-training programs; it regards mentoring as an exotic frill. So Kohlman has found his mentoring elsewhere. He describes “almost a classic journalistic technique” for seeking leadership guidance: “reaching out to people, doing research,” and doing a great deal of reading. “Peter Drucker, Tom Peters—I ate all that stuff up during my formative years,” he says. “I was mostly self-taught, with a limited budget.” He also cultivated informal relationships with senior executives. As valuable as all that networking and research was, Kohlman didn’t think it was enough. Four years ago, he became a member of the CIO Executive Council, a leadership-development organization for IT executives that’s run by the publishers of CIO magazine (my former employer). Among the Council’s offerings is Pathways, a program that provides group and individual mentoring. Kohlman signed up.

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The IT profession is well stocked with people who have far more responsibility than authority. Since they can’t do things by fiat, they have to be persuasive and consultative. Kohlman—soon to be in the thick of implementing a new IT architecture designed to tie together all of Cook’s far-flung business units and regions—felt he needed to fortify his selling skills to pull that off. Through a series of group mentoring sessions, Pathways helped Kohlman increase his powers of persuasion. The group aspect—about which he was initially apprehensive—had a natural multiplier effect. Each group in Pathways has about a half-dozen mentees, led by a single mentor. Because all the members are natives of the IT profession, they understand such defining conditions as the responsibility-without-authority problem. All of them share the need to be a world-class persuader. “Making a project happen is far more likely when you get people involved and enthused than when it’s a mandate,” says Kohlman. “Group mentoring gave me the chance to see the approaches others had tried. Having a group to use as a sounding board can be invaluable—especially when that group has no personal stake in the internal influences of your organization.” As much as he credits Pathways with helping him meet his goals, Kohlman is planning to leave the program: “It has nothing to do with its quality,” he says, (continued)

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(continued) “and everything to do with my progress in it.” In the past year he has brought two of his direct reports into Pathways. And he now finds himself acting more often as a mentor to others. He hopes to establish a Pathways-like program at Cook—specifically within the Global IT Management Group. The company has made great strides in reengineering its IT infrastructure to unify its many divisions around the world. But success brings challenges. “We need to develop leaders who will be able to grow with the organization,” Kohlman says. He sees mentoring as an indispensable tool for “creating a culture of continual leadership development.” Acknowledging the company’s skepticism about formal career development, he says, “I know I’m looking at an uphill battle.” Fortunately, the battle will demand the same selling skills that Pathways helped him enhance.

Moving on As noted earlier, most mentoring relationships have a natural end. After you’ve achieved your goals, move on before the law of diminishing returns kicks in. Of course, that doesn’t mean you should cut all ties. As the mentoring process winds down, your mentor may become a sponsor who advocates for your advancement in the company. Such rewards should be reciprocated. Perhaps your mentor has drawn fresh ideas, understanding, and inspiration from her exposure to you—the business’s 110

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next generation. That’s a good reason not to be stingy with your comments on what you find strange, perplexing, or exciting about the way your organization works. They may create a lasting—and useful—impression.

Looking back over my suggestions, I can see two things quite clearly. First, effective mentoring requires hard work and commitment from mentees and mentors alike. Second, I would have been far smarter and better served to go for it rather than hang back when I needed this kind of support. As it happened, my magazine launched as scheduled. It won some editorial awards, and it had an exciting twoyear run—before it was cut short by dwindling ad sales. Maybe if I’d gotten guidance from a mentor with commercial chops, things would have turned out differently. For one thing, had I enlisted the mentor I’d identified, I am sure he would have advised me to give up the publisher title—in retrospect it was a distraction—and instead use my editorial skills to boost the magazine’s business prospects. Later in my career, I learned a lot about how editors add value to the sales process. I am certain that mentoring would have shortened my learning curve. Plus, I would have developed an important new skill: asking for help and then making the most of it.

Lew McCreary is an editorial consultant and a contributing editor to HBR. He has launched five magazines over the course of his career and served as a formal and informal mentor to numerous colleagues. 111

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Chapter 9 How to Get More from Your Mentors by Jodi Glickman

A senior publishing executive at William Morris once told me how baffled she was when an aspiring literary agent asked her to be a mentor. She looked at me and said, “She’s got to make me want to be her mentor. Isn’t she supposed to do something for me?” The answer is a definitive yes. Mentors can provide valuable insight into your organization, inside information about the politics of the place, and useful over-the-shoulder advice about which people to work with and which ones to avoid. But to get all that and more, you’ve got to figure out how to repay the favor and make the relationship work for both of you. We’re all busy. Like you, your mentors have competing demands on their time and resources. They might let Adapted from content posted on hbr.org on September 23, 2009

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mentoring fall by the wayside when they’re closing a deal, bringing a new product to market, or putting out a fire for an important client. That’s why you, as the mentee, must make your mentors’ investment in you worth their time and energy. Here are four ways to provide value to your mentors— and receive more in return. 1. Keep their interests on your radar so you can

share relevant ideas and articles or provide access to resources. Talia, a coaching client of mine, knew her mentor Fred was keen to create a diverse workplace in the male-dominated financial industry. (Names in this article are disguised.) Shortly after she had interned at his investment management firm as a college student, she decided to pursue a career in an entirely different field—but she still valued his feedback and advice, so she kept the mentoring relationship going. In return for Fred’s ongoing guidance, Talia looked for ways to help him recruit female talent. She promoted his firm to her career center on campus and referred potential interns to him. She also introduced him to various women’s groups at her university and sent him articles and blog posts about why women were—or weren’t— seeking financial jobs. Fred appreciated the introductions and the market intelligence, and continued to counsel Talia on positioning herself and speaking to her skill set as she carved out her new career path. He even tapped his network and

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put her in touch with several people in her new industry of choice.

2. Provide insight into the rank and file of your organization. Your mentor may feel out of touch with the cubicle culture, as leaders often do. You can help by sharing your peers’ reactions to new social-media restrictions at the office, for example. Or, like Margot, a nonprofit program manager, you can explain that your fellow employees have been wanting a flextime policy for ages and offer yourself up as an organizational experiment. Margot’s boss and mentor, Bruce, lobbied for her flextime arrangement (the organization’s first) and had real skin in the game: If Margot’s performance suffered as a result of her working at home one day a week, so would his reputation. But the experiment went well, and Bruce asked Margot to put together a proposal on his behalf for a firm-wide flextime policy. Bruce earned points with colleagues for being forwardthinking and became known as an accommodating (and desirable) boss. He also benefited from Margot’s continued loyalty: She was always willing to put in extra time and energy whenever he needed help moving something new through the organization.

3. Participate in activities and programs your mentor cares about. Perhaps one of your mentors does a lot of college recruiting for your firm and runs a leadership development program. Why

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not offer to accompany her on a recruiting trip or suggest speakers for her leadership program? Consider Caroline, a magazine copy editor who took a special interest in her mentor’s “lunch and learn” series, a lineup of informal lectures by guest experts from various fields. Caroline made a point of flagging speakers who were in town for her own alumni events and took the initiative to book several of them for the brown-bag series. Soon her mentor turned the entire series over to her—and Caroline received high marks on her performance review for helping to promote learning in the organization.

4. Buy ’em lunch. At the very least, if you really struggle to find ways to add value, take your mentors to lunch or dinner (one at a time, of course). Even if they try to foot the bill, be firm and generous in your offer. Let them know that you appreciate their help and it’s your pleasure to be able to return the favor in some small way. A nice glass of wine and a good meal goes a long way toward building goodwill.

Jodi Glickman, founder and president of the communication training firm Great on the Job, is the author of Great on the Job (St. Martin’s, 2011).

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Chapter 10 Employ a Personal Board of Directors by Priscilla Claman

Like avocado-colored appliances, traditional mentoring is something you don’t see much anymore. Yes, corporate-sponsored mentoring programs will always improve personal exposure and connections. But the career strategy of hitching your future to some rising manager is outdated. That’s partly because midlevel and senior managers are no longer the ones with stable jobs. Many organizations are dealing with restructuring, downsizing, acquisitions, mergers, and, of course, recessions—so your mentor is just as likely to move on or be laid off as you are. And if you are considered her special protégé, you may lose your job when she does. Adapted from content posted on hbr.org on October 20, 2010

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Another reason one mentor alone won’t cut it is that no single person can possibly give you all the guidance and nurturing you’ll need to reach your potential. Even the wisest, most insightful people have blind spots, and even the most loyal and committed mentors can offer you only so much of their energy and time. What you need instead is a board of directors for your career, a group of people you consult regularly to get advice and feedback on matters ranging from job performance to career advancement to personal enrichment. There’s no need to hold meetings or even inform each person of his or her status as a board member—but you do need to select the right people, stay in touch, and reciprocate their generosity. Just like any good board, the people you choose should make different contributions to your thinking about how to reach your professional and personal goals. You might want to include your boss or a colleague you admire—or both. If you are a senior manager, consider job search professionals, academics, and consultants with expertise in your specialty. The people on your board should know more than you about something, be better than you at something, or offer different points of view. Putting only buddies on your board won’t help you grow and develop. Worried that assembling your board will take too much time away from your work? It’s actually not all that time-consuming—and your board will help you do your job better and more efficiently, especially if you’ve been placed in a role before you’re fully equipped to handle it. The key is to match up your weaknesses with oth-

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ers’ strengths—and, so you can give as well as get, your strengths with their weaknesses. For example, I often go to my friend Ted, an expert in the world of finance, with questions like “What do the Basel Accords really mean?” and “Why did my corporate client’s stock shoot up?” (Names in this article have been changed.) He is full of statistical information, but when he is looking for some up-to-date hunches, like what I think is going on in the job market, he calls me. I get in touch with Kerry, a former colleague of mine who has a gift for delivering bad news, when I have something particularly difficult to communicate. For instance, Kerry helped me come up with an effective way to tell an upset client why I thought his employer wasn’t giving him the promotion he thought he deserved. Kerry turns to me when he has a hard job to fill and wants some leads. Pat, a longtime client of mine, goes to all the conferences in our field, and she always knows the latest theories and research, so I check in with her periodically to find out what’s new. She introduced me to concepts in emotional intelligence and neuroscience long before they became trends. And because she knows I enjoy batting around training ideas, she asks me for suggestions when she’s looking for a creative new training exercise. I have learned from each of these folks. They know I think highly of their advice, and I do what I can to help them in return. Mentoring from a personal board is also invaluable if you’re making a career transition. Ellen, another client of mine, took six years off from a demanding technology career to raise her children. When she was ready to

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return to work full time, she looked for advice on how to make the transition. She sought out a former colleague, and he was candid: Her technical skills just weren’t upto-date. With his assistance, Ellen identified the new software she needed to know and took a training class. When she asked for extra help in the class, the instructor found her a software coach, and the coach got her connected with a user group. Then, the user group connected her with a headhunter, who told her he could find her a job if she were certified in the software. While working toward the certification, Ellen regularly stays in touch with her former colleague, the instructor, her software coach, and the headhunter to make sure she is on track. No single mentor could have made the contributions to Ellen’s career that all these individuals did. Finding and tapping her personal board members required some elbow grease, but it paid off. Go forth and consult your own network. Instead of relying on a single upper-level manager, assemble a team of specialists for yourself as if you were creating a company’s board of directors. Their combined efforts could yield real results for you.

Priscilla Claman is the president of Career Strategies, a Boston-based firm offering coaching to individuals and career management services to organizations. She is a former corporate human resources executive and the author of Ask . . . How to Get What You Want and Need at Work (Insights, 2002).

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Chapter 11 A Smarter Way to Network by Rob Cross and Robert Thomas

One of the happiest, most successful executives we know is a woman named Deb. She works at a major technology company and runs a global business unit that has more than 7,000 employees. When you ask her how she rose to the top and why she enjoys her job, her answer is simple: people. She points to her boss, the CEO, a mentor who “always has her back”; Steve, the head of a complementary business, with whom she has monthly brainstorming lunches and occasional gripe sessions; and Tom, a protégé to whom she has delegated responsibility for a large portion of her division. Outside the company, Deb’s circle includes her counterparts in three strategic partnerships, who inspire her with new ideas; Sheila, a Reprinted from Harvard Business Review, July–August 2011 (product #R1107P)

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former colleague, now in a different industry, who gives her candid feedback; and her husband, Bob, an executive at a philanthropic organization. She also has close relationships with her fellow volunteers in a program for atrisk high school students and the members of her tennis group and book club. This is Deb’s social network (the real-world kind, not the virtual kind), and it has helped her career a lot. But not because the group is large or full of high-powered contacts. Her network is effective because it both supports and challenges her. Deb’s relationships help her gain influence, broaden her expertise, learn new skills, and find purpose and balance. Deb values and nurtures them. “Make friends so that you have friends when you need friends” is her motto. “My current role is really a product of a relationship I formed over a decade ago that came back to me at the right time,” she explains. “People may chalk it up to luck, but I think more often than not luck happens through networks where people give first and are authentic in all they do.” Over the past 15 years, we’ve worked with many executives like Deb, at more than 300 companies. What began as organizational research—helping management teams understand and capitalize on the formal and informal social networks of their employees—has since metamorphosed into personal programs, which teach individual executives to increase their effectiveness by leveraging their networks. The old adage “It’s not what you know, it’s who you know” is true. But it’s more nuanced than that. In spite of

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what most self-help books say, network size doesn’t usually matter. In fact, we’ve found that individuals who simply know a lot of people are less likely to achieve standout performance, because they’re spread too thin. Political animals with lots of connections to corporate and industry leaders don’t win the day, either. Yes, it’s important to know powerful people, but if they account for too much of your network, your peers and subordinates often perceive you to be overly self-interested, and you may lose support as a result. The data we’ve collected point to a different model for networking. The executives who consistently rank in the top 20% of their companies in both performance and well-being have diverse but select networks like Deb’s— made up of high-quality relationships with people who come from several different spheres and from up and down the corporate hierarchy. These high performers, we have found, tap into six critical kinds of connections, which enhance their careers and lives in a variety of ways. Through our work advising individual managers, we’ve also identified a four-step process that will help any executive develop this kind of network. But first, let’s take a look at some common networking mistakes.

Getting It Wrong Many people take a misguided approach to networking. They go astray by building imbalanced networks, pursuing the wrong kind of relationships, or leveraging relationships ineffectively. (See the sidebar “Are You Networking Impaired?”) These people might remain successful for a time, but often they will hit a plateau or

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ARE YOU NETWORKING IMPAIRED? In our work, we have identified six common managerial types who get stuck in three kinds of network traps. Do any of the following descriptions fit you? The wrong structure • The formalist focuses too heavily on his company’s official hierarchy, missing out on the efficiencies and opportunities that come from informal connections. • The overloaded manager has so much contact with colleagues and external ties that she becomes a bottleneck to progress and burns herself out. The wrong relationships • The disconnected expert sticks with people who keep him focused on safe, existing

see their career derailed because their networks couldn’t prompt or support a critical transition. Consider Dan, the chief information officer of one of the world’s largest life-sciences organizations. He was under constant pressure to find new technologies that would spur innovation and speed the drug commercialization process at his company, and he needed a network

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competencies, rather than those who push him to build new skills. • The biased leader relies on advisers much like herself (same functional background, location, or values), who reinforce her biases, when she should instead seek outsiders to prompt more fully informed decisions. The wrong behavior • The superficial networker engages in surfacelevel interaction with as many people as possible, mistakenly believing that a bigger network is a better one. • The chameleon changes his interests, values, and personality to match those of whatever subgroup is his audience, and winds up being disconnected from every group.

that would help him. Unfortunately, more than 70% of his trusted advisers were in the unit he had worked in before becoming CIO. Not only did they reinforce his bias toward certain solutions and vendors, but they lacked the outside knowledge he needed. “I had started to mistake friendship, trust, and accessibility for real expertise in new domains,” he told us. “This didn’t mean I was going

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to dump these people, as they played important roles for me in other ways. But I needed to be more targeted in who I let influence my thinking.” Another overarching mistake we often see in executives’ networks is an imbalance between connections that promote career advancement and those that promote engagement and satisfaction. Numerous studies have shown that happier executives are higher-performing ones. Take Tim, the director of a large practice area at a leading professional services firm. On the surface he was doing well, but job stress had taken its toll. He was 40 pounds overweight, with alarmingly high cholesterol and blood sugar levels, and prone to extreme mood swings. When things went well at work, he was happy; when they didn’t, he wasn’t pleasant to be around. In fact, Tim’s wife finally broke down and told him she thought he had become a career-obsessed jerk and needed to get other interests. With her encouragement, he joined Habitat for Humanity and started rowing with their daughter. As a result, his social network expanded to include people with different perspectives and values, who helped him focus on more healthful and fulfilling pursuits. “As I spent more time with different groups, what I cared about diversified,” he says. “Physically, I’m in much better shape and probably staved off a heart attack. But I think I’m a better leader, too, in that I think about problems more broadly, and I’m more resilient. Our peer feedback systems are also clearly indicating that people are more committed to the new me.”

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Getting It Right To understand more about what makes an effective network, let’s look again at Deb. She has a small set of core contacts—14 people she really relies on. Effective core networks typically range in size from 12 to 18 people. But what really matters is structure: Core connections must bridge smaller, more-diverse kinds of groups and cross hierarchical, organizational, functional, and geographic lines. Core relationships should result in more learning, less bias in decision making, and greater personal growth and balance. The people in your inner circle should also model positive behaviors, because if those around you are enthusiastic, authentic, and generous, you will be, too. More specifically, our data show that high performers have strong ties to 1. people who offer them new information or expertise, including internal or external clients, who increase their market awareness; peers in other functions, divisions, or geographies, who share best practices; and contacts in other industries, who inspire innovation; 2. formally powerful people, who provide mentoring, sense-making, political support, and resources; and informally powerful people, who offer influence, help coordinating projects, and support among the rank and file; and 3. people who give them developmental feedback, challenge their decisions, and push them to be

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better. At an early career stage, an employee might get this from a boss or customers; later, it tends to come from coaches, trusted colleagues, or a spouse. Meanwhile, the most satisfied executives have ties to 1. people who provide personal support, such as colleagues who help them get back on track when they’re having a bad day or friends with whom they can just be themselves; 2. people who add a sense of purpose or worth, such as bosses and customers who validate their work, and family members and other stakeholders who show them work has a broader meaning; and 3. people who promote their work/life balance, holding them accountable for activities that improve their physical health (such as sports), mental engagement (such as hobbies or educational classes), or spiritual well-being (music, religion, art, or volunteer work). How does one create such a varied network? We recommend a four-point action plan: analyze, de-layer, diversify, and capitalize.

Analyze Start by looking at the individuals in your network. Where are they located—are they within your team, your unit, or your company, or outside your organization?

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What benefits do your interactions with them provide? How energizing are those interactions? The last question is an important one. Energizers bring out the best in everyone around them, and our data show that having them in your network is a strong predictor of success over time. These people aren’t necessarily extroverted or charismatic. They’re people who always see opportunities, even in challenging situations, and create room for others to meaningfully contribute. Good energizers are trustworthy and committed to principles larger than their self-interest, and they enjoy other people. “De-energizers,” by contrast, are quick to point out obstacles, critique people rather than ideas, are inflexible in their thinking, fail to create opportunities, miss commitments, and don’t show concern for others. Unfortunately, energy-sapping interactions have more impact than energizing ones—up to seven times as much, according to one study. And our own research suggests that roughly 90% of anxiety at work is created by 5% of one’s network—the people who sap energy. Next, classify your relationships by the benefits they provide. Generally, benefits fall into one of six basic categories: information, political support and influence, personal development, personal support and energy, a sense of purpose or worth, and work/life balance. It’s important to have people who provide each kind of benefit in your network. Categorizing your relationships will give you a clearer idea of whether your network is extending your abilities or keeping you stuck. You’ll see where you have holes and redundancies and which people you depend on too much—or not enough.

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Let’s use Joe, a rising star in an investment bank, as a case study. He had 24 close advisers—on the surface, a more than healthy number. But many of the people he relied on were from his own department and frequently relied on one another. If he eliminated those redundancies, his network shrank to five people. After giving it some thought and observing his peers’ networks, he realized he was missing links with several important types of people: colleagues focused on financial offerings outside his own products, who could help him deliver broader financial solutions to customers; coworkers in different geographies—particularly London and Asia—who could enhance his ability to sell to global clients; and boardlevel relationships at key accounts, who could make client introductions and influence purchasing decisions. His insularity was limiting his options and hurting his chances of promotion to managing director. He realized he would need to focus on cultivating a network rather than allowing it to organically arise from the day-to-day demands of his work.

De-layer Once you’ve analyzed your network, you need to make some hard decisions about which relationships to back away from. First, look at eliminating or minimizing contact with people who sap you of energy or promote unhealthful behaviors. You can do this by reshaping your role to avoid them, devoting less time to them, working to change their behavior, or reframing your reactions so that you don’t dwell on the interactions.

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John, an academic, realized that two university administrators in his network were causing him a great deal of anxiety. This had so soured his view of his school that he was considering leaving. He therefore decided to devote less time to projects and committees that would involve the negative contacts and to avoid dwelling on any sniping comments they subjected him to. Within a year he was much more productive and happy. “By shifting my role and how I reacted to the idiots, I turned a negative situation around,” John says. “In hindsight it was an obvious move—rather than leave a place I loved—but emotions can spiral on you in ways you don’t recognize.” The next step is to ask yourself which of the six categories have too many people in them. Early-stage leaders, for example, tend to focus too much on information and not enough on personal development and might want to shed some of the contacts who give them the former to make more time for those who give them the latter. Beyond this, consider which individuals—and types of people as determined by function, hierarchy, or geography—have too much of you, and why. Is the cause structural, in that work procedures require you to be involved? Or is your own behavior causing the imbalance? What can you change to rectify the situation? Too often we see leaders fail because they accept or create too many collaborative demands. Paul, the head of research in a consumer products company, had a network of almost 70 people just at work. But he got many complaints from people who said they needed greater access to him. His productivity, and

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his unit’s, was suffering. When he analyzed his network, he realized that he was missing “people and initiatives one or two levels out.” To address this, he decided to delegate—stepping away from interactions that didn’t require his presence and cultivating “go to” stand-ins in certain areas of expertise. He also changed his leadership style from extraordinarily accessible to helpful but more removed, which encouraged subordinates to solve their own problems by connecting with people around him. “As a leader you can find yourself in this bubble of activity where you feel like a lot is happening moving from meeting to meeting,” Paul says. “You can actually start to thrive on this in some ways. I had to move past this for us to be effective as a unit and so that I could be more forward-thinking.”

Diversify Now that you’ve created room in your network, you need to fill it with the right people. Simple tools like work sheets can help you get started. For example, you might make a list of the six categories of relationships and think about colleagues who could fill the holes you have in each. Remember to focus on positive, energetic, selfless people, and be sure to ask people inside and outside your network for recommendations. You should also think about how you could connect your network to your professional and personal goals. Here’s another simple exercise: Write down three specific business results you hope to achieve over the next year (such as doubling sales or winning an Asia-based

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client) and then list the people (by name or general role) who could help you with them, thanks to their expertise, control over resources, or ability to provide political support. Joe, the investment banker, identified counterparts in the Asian and European operations of his company who had relationships with the clients he was focused on and then scheduled regular calls with them to coordinate efforts. “In a couple of cases this helped me identify opportunities I could pitch proactively. In others it just helped us appear more coordinated when we were competing against other banks,” he says. One of the big challenges for Paul, the consumer products executive, was managing a new facility and line of innovation in China. Because none of his trusted advisers had ever even been to that country, he reached out to the head of R&D at a major life-sciences organization that had undertaken a similar effort.

Capitalize Last, make sure you’re using your contacts as effectively as you can. Are there people you rely on in one sphere, such as political support, that you could also use to fill a need in another, such as personal development? Could you get more out of some relationships if you put more energy into them? Our research shows, for instance, that high performers at all levels tend to use their information contacts to gain other benefits, such as new ideas. Reciprocal relationships also tend to be more fruitful; the most successful leaders always look for ways to give more to their contacts.

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Alan, a top executive at a global insurance company, realized that although he had a good network, he was still making decisions in relative isolation. He failed to elicit insights from others and, as a result, wasn’t making enough progress toward his goals. So he started inviting his more-junior contacts, who were informal opinion leaders in his company, to lunch and asking them openended questions. These conversations led him to streamline decision making and uncover innovation deep within the firm’s hierarchy. “When I met with one lady, I was stunned at a great new product idea she had been pushing for months,” Alan says. “But she hadn’t been able to get the right people to listen. I was able to step in and help make things happen. To me the right way to be tapping into people is in this exploratory way—whether it is about strategic insights or just how they think I’m doing on some aspect of my job. That’s how I get to new ways of thinking and doing things, and I know it makes me much more effective than people who are smarter than me.” A network constructed using this four-point model will build on itself over time. In due course, it will ensure that the best opportunities, ideas, and talent come your way.

Rob Cross is an associate professor at the University of Virginia’s McIntire School of Commerce. Robert Thomas is the executive director of the Accenture Institute for High Performance.

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Chapter 12 Accelerate Your Development: Tips for Millennials by Jeanne C. Meister and Karie Willyerd

Many of the 70 million jobs that Baby Boomers will vacate over the next two decades—from the front lines up to senior management—will go to Gen Xers and Millennials (also known as Generation Y). If you’re a Millennial (born after 1980), that might mean early career advancement for you, though you’ll have lots of competition for those positions: 88 million others in your generation, plus about 50 million Xers, will also be vying for them. How do you compete for jobs formerly held by people with decades more experience, especially when you’re younger than at least a third of the candidates out there? By putting your mentoring and development on a fast track. Don’t wait for your company to notice you and

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groom you. Be bold—and hungry—as you seek out the counsel you need to become a serious contender for one of those roles Boomers are leaving open. These seven tips will help you scour the landscape for the right mentors, persuade them to work with you, and collaborate with them to accelerate your development.

1. Build a diverse network of mentors to round out your skills and knowledge. To fill a retiring Boomer’s shoes, you’ll probably need to broaden and deepen your skill set—and the longer that takes, the more likely you’ll be to lose out to someone who’s a quicker “study.” Got your eye on a position above you that may open up in a year or two? Compare your experience with that of the person currently in the role to see where you have catching up to do—and look for several mentors who can speed up your learning in key areas. For example, consider reaching out to: – A senior executive with experience in a country where your company is expanding— perhaps in an emerging market, such as Brazil or Russia. Use this mentoring relationship as an opportunity to develop a global mind-set about the business you’re in. – A high-performing peer in an adjacent unit or industry. Say you’re a health care marketer, and you’re struggling to create innovative campaigns. Try connecting with someone who nat-

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urally looks at the health care world through an innovator’s lens—a medical-product developer, for instance. He may be equally eager to glean your insights into customer needs. – A midlevel manager in a sector your business serves. Suppose you work at a tech company, and one of your biggest customers is a government agency. An IT manager in that sector can help you understand how agencies think about security, for example, and what impact new regulations will have on the services your company is developing. Each mentor in your network should have a distinct area of expertise that complements your knowledge. (For more on building a diverse network of mentors, see Priscilla Claman’s article, “Employ a Personal Board of Directors,” earlier in this guide.)

2. Select at least one mentor with only a few more years of experience. Experts may be so far removed from your day-to-day world that they can’t articulate good approaches to the kinds of problems you face. If you wanted to learn to play chess, Bobby Fischer wouldn’t be the best person to teach you the basics. Same goes for acquiring work-related skills: Ask a senior executive to counsel you on challenges she hasn’t tackled in 20 years, and you’ll both probably end up frustrated.

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As Andi Litz, a Millennial who works in human resources at General Electric, explains, “Those who are only a couple of years senior can . . . relate to our experiences. Their input and advice will be realistic and achievable.” Also, she points out, it’s often “easier to develop a trusting relationship” with them, because they’re more accessible than senior executives. When Litz moved to Selmer, Tennessee, to take a new job with GE, she reached out to the person she was replacing. “Since he had just left the job for another one at GE,” she says, “he was really helpful. We exchanged lots of phone calls, text messages, and instant messages. I’d be on a big call with people from all over the place, and I could IM him to get quick insight on an initiative that came up in the discussion.” If your organization has an affinity group for Millennials, such as a new-hire club or a young leaders’ group, start there to find people who have recently walked in your shoes. Or look for groups in your community that sponsor development for young leaders.

3. Show potential mentors that they can have a big impact with their limited time. Your potential mentors—Boomers and Xers in particular—may have complex jobs, time commitments outside work, and multiple mentoring requests coming in from other Millennials. So it’s important to treat their time as a precious resource. With some

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thought and creativity, you can design a mentoring relationship that moves your development along without placing too many demands on the mentor’s schedule. For starters, select a few critical goals to focus on, and identify ways of measuring success. There’s nothing more draining for a mentor than a growing list of goals, with no end in sight. Also, consider buddying up with Millennial peers at your company and asking an experienced manager to work with you as a group on a specific skill, such as making a compelling business case for a new product. A mini class on a discrete topic like that is attractive to a busy mentor because it reins in the conversation. It not only gives the mentor bigger bang for buck but also lends you and your Millennial cohort strength in numbers: You gain visibility as a group that pursues professional growth—and your mentor earns a reputation for nurturing young talent.

4. Use your mentor’s preferred method of communication. As a Millennial, you may rely heavily on Skype, Facebook, LinkedIn, Twitter, and texting to communicate efficiently. These tools accommodate you wherever you are and can help you keep a brisk dialogue going with your mentor— but only if she likes using them, too. If she prefers interacting with you in face-toface meetings and over e-mail, then so be it. She’s sharing her time and expertise with you.

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Make it easy for her to be generous. After you’ve found a method that works for her and established a comfortable rhythm, you may discover that she’s interested in learning more about social media, for example. That would be a good time to offer a crash course on Twitter and see whether she’d like to start using it to supplement your dialogue.

5. Remember to listen. Your goal is to learn and develop quickly—and rich feedback is a critical part of rapid development. As a young protégé, you may view your mentoring sessions as opportunities to impress someone who has the power to advance your career. But your mentor will be put off if you do more self-promoting than learning. Access to someone with influence is a terrific benefit of mentoring, but you’ll gain greater access by putting growth first, showing a little humility, and making it clear that you take your mentor’s advice seriously. So, if he provides feedback on how to make a more succinct, polished customer pitch, don’t respond with a knee-jerk “Yes, I knew that already” or “That doesn’t really apply to me now.” Instead, restate in your own words what your mentor said, to make sure you’ve got it right, and ask questions to clarify. Mentors will test you by seeing how you respond to feedback, and the better you are at receiving it, the more of it you will get.

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6. Ask what you can do for your mentor. Look for ways to give rather than always take. As a Millennial, you have digital skills that your mentor may want to pick up, so offer some reverse mentoring: Show her how to sign up for Google Alerts and receive articles on topics of mutual interest. And if you share documents with your mentor—for example, PowerPoint presentations or white papers from industry analysts—teach her how to use a cloud service like Dropbox so you can easily discuss these without having to e-mail them back and forth. She may discover she likes collaborating this way and start doing the same thing with her own team.

7. End the relationship before it becomes a chore for the mentor. It’s easy to extend mentoring relationships beyond their usefulness. You get into a groove; you enjoy the stimulating conversations; and you’ve still got lots to learn in a tight time frame. But resist the temptation to wring evermore value from your mentor. Follow the excellent advice of Ryan Healy, a Millennial who cofounded Brazen Careerist, a career website for young professionals: “Be clear about setting goals, and assess whether you have achieved them,” he says. “If the answer is yes, it’s time to move on and find a new mentor to assist you with another set of goals while continuing to keep in touch with your mentors past and

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current.” Thank your mentor for all the help you’ve received—and ask permission to use him as a reference when you’re scouting for the next one.

Jeanne C. Meister is a partner at Future Workplace, which helps organizations redefine their corporate learning and talent management strategies. Karie Willyerd is the chief learning officer at SuccessFactors, a cloud-basedsoftware company. They are the authors of The 2020 Workplace: How Innovative Companies Attract, Develop, and Keep Tomorrow’s Employees Today (HarperBusiness, 2010).

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Chapter 13 Mentoring for Gen Xers by Tamara Erickson

If you’re a member of Generation X (born between the early 1960s and the late 1970s), you may worry that Gen Ys (born after 1980) will get all the mentoring love at work, but don’t: You’re actually in a pretty good position. For starters, you’re armed with more experience, which you can use to attract good mentors. Think of all that experience as a stack of poker chips acquired for being an effective, valuable contributor over the years— chips that you can now cash in to get the specific career advice and support you need. Your Gen Y colleagues, no matter how “golden,” often receive indiscriminant, same-for-all counsel. Like college freshmen, they have to study the core curriculum before they can spend much time concentrating on a major. So they may sit in on group sessions to learn more about

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the corporation’s values and strategies, for example, or receive coaching on writing effective memos. Much of their mentoring is either broad orientation or basic tactical learning. As a result, it covers a wide range of skills and knowledge, and can be hit or miss—more like the rewards from a slot machine than a payout for a poker game well played. Now that you’re well into your thirties or forties, you need mentoring that’s tailored to your individual strengths and career goals. And at this point, you’ve earned it. But don’t expect the company or your Baby Boomer bosses to think of it on their own—you’ve got to be the one to make it happen. How? By playing to your strengths, building a network of mentors who can help you achieve your goals, and working with those mentors to optimize your current role.

Playing to Your Strengths Earlier in your career, it made sense to try a bit of everything and to push yourself to improve in areas of weakness. Though self-improvement is still an admirable goal, now is the time to consolidate your efforts and focus on what you do best. You’ll deepen your expertise and, just as important, attract the attention of mentors who can help you grow and advance in your areas of strength. Ask yourself:

“Am I pursuing opportunities at work that demonstrate my strengths?” Consider Jonathon, a software specialist at a large distribution firm, who had come to realize that his ability to

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manage projects well set him apart from his colleagues. (All examples in this article are drawn from my research on Gen X.) He began to seek work assignments that allowed him to highlight that skill set. Because he was organized and good at meeting deadlines, he frequently offered to lead projects. Over time, the VP of his company’s project management office took note and began to send increasingly challenging opportunities Jonathon’s way. To set him up for success, the VP also mentored Jonathon by sharing the tacit knowledge he’d gained over the years—tips for handling negotiations with difficult stakeholders, for example, and ways to access scarce resources.

“Do my external activities reinforce my professional strengths and reputation?” When you sign up for responsibilities outside work, try to choose ones that build on your expertise. If you’re good at managing large projects, consider joining the school building committee in your district. Or if marketing campaigns are your bailiwick, offer to develop one for a local animal shelter. Susan, a human resource generalist, was fascinated by the strategic issues associated with talent management and realized she wanted to specialize in that area. As part of her career development plan, she volunteered to serve on the long-range strategy committee of a local arts organization. Helping this committee consider the impact a changing workforce would have on the organization gave her strategy-development experience relevant to her field—and a number of stories she could inject into watercooler conversations at work. She posted updates

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and lessons learned in her profile on the company’s social network. Her reputation for big-picture planning spread quickly. Soon her enthusiasm attracted the attention of several senior managers, who were willing to invest time in mentoring such an obviously dedicated individual: They shared their own experiences and best practices with her, gave her assignments that required an innovative look at future trends’ implications for the company, critiqued her work on those assignments, and supported her requests for corporate funding for additional education.

Building a Mentoring Network At this stage in your career, it’s critical to broaden your perspective and increase your access to careeradvancement opportunities—and you can do both by building and tapping a network of multiple mentors. Of course, younger employees create networks of contacts, too, but not typically for the kind of mentoring you’ll benefit from. Theirs are often designed to help them get necessary information for immediate tasks or guidance on specific challenges, like delivering effective presentations. Given where you are in your career, your networking goal should be much larger than that: to open doors for growth and advancement. Ben, a specialist in procurement, worked in a corporation that had several strong, decentralized divisions. He had a solid relationship with his department head, but no contacts in other parts of the company. However, by asking his mentor for targeted introductions, he formed a cross-unit network of influential, in-the-know people

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within the operational functions in multiple divisions. That’s how he learned about a plum opportunity to move into a broader operational management role when it came up in another division. And then there was Laura, a star in sales who had a long-term goal of moving into marketing. She worked with her mentor to understand which aspects of her past experience would be most applicable to marketing roles (her detailed understanding of the distribution channels, for instance)—and then to position herself as a potential marketer in conversations with others in the firm. Her mentor also introduced her to people who coached her on skills she lacked, such as conducting market research. With confidence in her base of experience and exposure to some new skills, Laura made a successful move into a product manager role when the next one opened up. Start building your mentoring network by creating a personal relationship map. Identify all the people you need to collaborate with in order to do your current job successfully and everyone who might help you achieve your next job or career goal. Ask yourself which of those individuals you need to know better, and leverage your current mentors to form stronger relationships with them. For example, ask existing contacts to provide key introductions, as Ben’s and Laura’s mentors did, and have them fill you in on people’s backgrounds and interests. Work with your mentors to identify issues or projects your target contacts are working on: Maybe you can offer relevant expertise or ideas, or find ways for your team to assist theirs.

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Optimizing Your Current Role Many midcareer challenges you’ll face as a Gen Xer are likely to stem from a mismatch between your tried-andtrue approaches to work and your changing roles over the course of your career. In your earlier roles, success probably depended on acquiring knowledge, gaining technical proficiency, and working hard to produce whatever your company produced. But now you may be responsible for managing processes, activities, or other people. Or perhaps you’ve moved into a senior role, where your job is to establish and reinforce the company’s values, strategies, policies, and leadership behaviors. Success, in either case, now depends on your ability to create an environment where other people can shine. Making such transitions is tough because knowledge and skills that previously served you well no longer apply. One of the most important roles mentors play at this point in your career is to help you see yourself clearly and modify your behavior appropriately as you strive to meet new expectations. It’s difficult to get this perspective yourself—and the kind of honest feedback that’s required is not something a casual colleague is likely to provide. You need trusted mentors, invested in helping you succeed. Take Barbara’s situation. Based on her terrific work as a research analyst, she was viewed as a rising star at her company and promoted at a young age to a senior position that involved managing many others. Her new direct reports were also acknowledged stars or eager to become recognized. Barbara’s role abruptly shifted from

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producing content as an individual contributor to creating context where other contributors could perform well. Fortunately, a mentor helped her adjust her focus and tone—for instance, by doing some role-playing with Barbara to prepare her for difficult types of conversations. From such exercises, Barbara learned that she needed to soften her tone and adopt a more nurturing attitude. Her mentor showed her how to convey genuine respect and caring for her direct reports through word choice and body language, and explained the importance of gaining their trust by acknowledging their accomplishments and their need for recognition.

Mentoring for Gen Xers is a reinforcing circle: The more you use your experience to build your reputation and your network, the easier it will become to attract effective mentors. And by working with those mentors, you can leverage the knowledge and skills honed in your current role to grasp the next big opportunity.

Tamara Erickson works with corporations to more effectively engage the changing workforce. She is the author of a trilogy of books on the generations: Retire Retirement, Plugged In, and What’s Next, Gen X? (Harvard Business Review Press, 2008, 2008, and 2010). She was named one of the 50 leading management thinkers in 2009 and 2011 by Thinkers50.

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Chapter 14 Keep Learning from Your Protégés by Hollis Heimbouch

I’m fortunate to work in publishing, a field that has long relied on an apprenticeship model of talent management and promotion. Like many of my peers, I began my career as an editorial assistant, reporting to two senior editors. They were responsible for finding and developing new book projects, which seemed to require many fancy meals and trips to glamorous locales. And I was responsible for handling all the sundry details of getting books out the door, which required lots of trips to the photocopier and the mailroom. (We’re talking late 1980s.) A recent college graduate, fresh-faced and naive, I thought I knew a lot about literature—but I knew absolutely nothing about the business of books. I was mentored well by my two supervisors. They allowed me to sit in on calls with authors, read manu-

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scripts, and contribute feedback. They offered me an unvarnished look into the life of an editor. A few years later I was finally in charge of my own projects and mentoring an editorial assistant of my own—and I learned as much from her as I did from my senior colleagues. The great thing about working with people who are eager to learn is they aren’t afraid to ask questions. Bone-headed questions, profound questions: Why don’t we just publish best sellers? Why is one author a dream to work with and another the subject of recurring nightmares? How do I edit a book? How do I judge a good jacket design? How do I say no without burning a bridge? How much is a project “worth”? I tried to be a good mentor, but I can’t lie: At first I resented the amount of time and effort involved, afraid that all the yammering might take me away from “important” editorial work. But the more we talked about what it meant to be an editor and what it was I actually did, the more I came to understand the craft myself. In these conversations, I was able to articulate the mental checklist I used to assess a project’s merits and inherit risks— financial, psychic, and otherwise. I was able to identify a set of communication techniques, a list of dos and don’ts, that had proven helpful in dealing with difficult authors. And I came to see that my work didn’t depend solely on hyper-productivity (the number of projects acquired, the number of best sellers); emotional intelligence and the care and feeding of long-term relationships mattered just as much. Previously these so-called soft skills hadn’t much figured into my daily to-do list, but I now real-

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ized they were at the heart of what made some editors great. My assistant’s almost total lack of inhibition gave me, the smarty-pants senior editor, a second chance to learn critical, intangible aspects of my job: why I did things the way I did and what assumptions were behind my actions. Psychologists call this practice of “thinking about how we think” metacognition, and I would argue it lies at the heart of every productive reverse mentoring relationship, where the teacher learns from the student. The first time around, as novices, we learn a lot by doing—by making mistakes, by self-correcting, by having our errors pointed out by others. The second time around we learn by teaching someone else to do what we do. That process forces us to be explicit about the embedded rules and mental models we’ve been using to make decisions. It reinforces and clarifies what we know in our guts. It’s this second-time-around learning that turns good professionals and managers into great ones. While we’re imparting new knowledge and perspectives to our mentees, we’re also gaining deeper insight into what we do. In the best of these relationships, it’s hard to tell the mentee from the mentor, so symbiotic is the learning and exchange. The trick is not to get hung up by hubris once you feel you’ve “arrived.” Even the most seasoned of us have much to learn not just by looking up the ladder but also by looking down, around, and even outward, to people in other departments or fields. If you get snooty and dismiss unusual suspects from your lineup of potential mentors,

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you’ll miss out on important guidance and growth. I picked up that lesson the hard way. As a lifelong runner, I had gotten bored with marathons as I approached my 40th birthday and decided to compete in a triathlon. But I’d never swum competitively, despite having learned basic swimming skills as a kid. So what did I do? I brought the same discipline to swimming that I’d brought to running and, for that matter, editing. I read books, watched videos, and spent several hours a week thrashing through laps on my own and trying to pick up tricks by observing other swimmers. And still I wasn’t getting much better. Stubbornly I completed a few triathlons training this way. But when I examined the race results, my swim times consistently put me in the bottom 20% of overall finishers. How could this happen after I’d worked so hard? At a loss, I spoke to another triathlete, a much better swimmer than I was. She pointed out that swimming is highly technical, more so than running or cycling; much depends on the physics of body position, stroke, and so forth. I’d read as much in my manuals, of course, and tried to follow the instructions, but something was still missing. Finally I gave up and hired a swim coach, even though I found it galling to take advice from a brawny guy named Coach Mike, whom I could easily outrun in a 10K road race. In the pool, though, he was Baryshnikov. Together we began breaking down my so-called technique, with Coach Mike showing me how poor form and a bevy of tiny errors had caused me to be inefficient in the water. It was tedious work, often involving my performing idioticlooking drills as other swimmers sliced the water in adja-

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Keep Learning from Your Protégés

cent lanes. Coach Mike spoke somewhat mystically about learning to “feel” the water, understanding instinctively how it works with and against your body. The metacognition of swimming, if you will. Even as I longed to experience that “feel,” I was amazed at how a shift in the position of my hips or a slightly more bent elbow, for instance, resulted in marked and immediate improvements. I was not only swimming faster but also expending less energy doing so. I could never have made these corrections on my own, no matter how much time I spent in the water or how many DVDs I watched. Even today, swimming is still my weakest sport, but I’ve graduated from thrashing to “feeling it”—and perhaps more important, I’m now able to recognize when I’m starting to lose that feel so I can refocus on the fundamentals of good form. Of course, the larger lesson isn’t about the need to refine technique or even to hire a coach. It’s about how difficult, but necessary, it is to prevent ourselves from becoming atrophied by success and pride. It took me three times longer to become a decent swimmer than it should have because I’d lost the openness and humility that makes learning possible. I’d considered myself proficient in other parts of my life—working, editing, running, being a grown-up in general—and expected the rules I already knew to apply to swimming. I’d brought my ego to the pool, acting with fear and self-consciousness rather than with the inquisitiveness that had served me well early in my professional life. Mastery can become a closed world; we do only those things that reinforce a positive image of ourselves. By

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Growth and Advancement

contrast, being a novice can make highly specialized skills seem easy to master: a simple matter of jumping in and flapping around. That’s why it’s so powerful to bring together the intensity of learning-by-doing with the reflection in learning-by-teaching. It’s the reciprocity between the two that leads to satisfaction and growth over the course of a career. As I head toward my third decade in publishing and my sixth year as a swimmer, I’m trying to stay in close touch with the kids in the world—not just because they can teach me jazzy things about social media and computer games but also because their questions encourage me to keep asking my own.

Hollis Heimbouch is the vice president and publisher of Harper Business, an imprint of HarperCollins, and a former associate publisher/editorial director of Harvard Business Review Press. She continues to compete in road races and triathlons, creaky joints permitting.

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Index active listening, 79–80. See also listening skills advancement key factors in, 77–78 reasons for getting passed over for, 71–83 unwritten rules for, 73–76 Baby Boomers, 135 board of directors, personal, 117–120 career advancement. See also advancement finding dream job, 35–36 managing your, 33, 38 reaching potential in, 2, 31–42 reassessing, 33 taking charge of, 1–5, 33, 38 transitions, 119–120 character, 38–41, 53 coaching vs. mentoring, 26 collaboration, 59–60 co-mentors, 88–90 communication modes, 139–140 communication skills, 57–58 company-assigned mentors, 3, 117

competency companions, 46, 48, 53–61 complementary skills, 44–45, 49, 63–67 confidentiality, 103 conventional wisdom, 38–39 core selection factors, in career advancement, 76, 77–78 critical tasks, 36–38 de-energizers, 129 deselection factors, in career advancement, 76, 77 developmental network, 127–128, 129 discretion, 103 employees, feedback from, 35, 47 energizers, 129 expectations, defining your, 95–97, 104–105 feedback 360-degree, 47, 49–52, 76, 79 decoding, 82 developmental, 125–126 responding to, 80–82, 140 seeking out, 34–35, 79–83 vague, 74, 75

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Index

formal mentoring programs, 108–110 Generation X career opportunities for, 135 mentoring for, 143–149 midcareer challenges for, 148–149 network building for, 146–147 playing to strengths by, 144–146 Generation Y. See Millennials goals defining your, 95–97 milestones for, 104–105 setting, 144–145 interaction effect, 45–48 interpersonal skills, 57–60 invisible mentors, 89, 92–93 leadership change, 60–61 competencies, building, 49–69 competency models, 76–79 demonstrating, 38–41 effectiveness, 45–46, 50–51, 67–68 skills, 53–61, 75–79 linear development, 44, 65–67 listening skills, 140. See also active listening logistics, 105 mastery, 155–156 mentoring classical, 16 vs. coaching, 26 confidentiality and, 103 formal programs for, 108–110

for Gen Xers, 143–149 goals and expectations for, 95–97, 104 logistics of, 105 milestones for, 104–105 for Millennials, 135–142 moving on from, 110–111, 141–142 myths about, 23–27 from personal board of directors, 117–120 reverse, 141, 153 for senior executives, 25–27 short-term, 25 structure for, 106–107 value of, 1–3 mentors benefits for, 27, 88–90, 102, 114–116, 141 co-mentors, 88–90 company-assigned, 3, 117 finding, 3, 87–93, 100–101 getting to know, 101–104 invisible, 89, 92–93 multiple, 23–24, 117–120, 136–137, 146–147 providing value to your, 114–116, 141 relationships with, 99–111, 114–116 remote, 89, 90–92 selecting, 23–24, 100–101, 118 vs. sponsors, 16–17 types of, 87–93 milestones, 104–105 Millennials affinity groups for, 138 mentoring tips for, 135–142 Myers-Briggs Type Indicator, 102–103

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Index

networks. See also relationships analyzing current, 128–130 building, for Gen Xers, 146–147 capitalizing on, 133–134 de-layering, 130–132 developmental, 23–24 diversifying, 132–133, 136–137 mistakes in forming, 121–126 of multiple mentors, 117–120 size of, 121–123 smart approach to, 121–134 social, 121–123 nonlinear development, 44–45 nonnegotiables, in career advancement, 75–76, 77 personal board of directors, 117–120 personal capabilities, 53–55 personality assessments, 102–103 potential, reaching your, 2, 31–42 professional satisfaction, 31–32 promotions, reasons for not getting, 71–83. See also advancement protégés cultivating, 17–20 learning from, 151–156 role of, 15–17 sponsors and, 9–21 value provided by, 114–116, 140–141, 151–156 relationships. See also networks analyzing current, 128–130 core, 125 ending, 110–111, 141–142 maintaining, 20–21

mentoring, 99–111 short-term, 25 sponsor-protégé, 9–21, 151–153 remote mentors, 89, 90–92 reverse mentoring, 141, 153 rigor, 107 self-assessment, 27, 33–36 senior executives, mentoring for, 25–27 skills interpersonal, 57–60 leadership, 53–61, 75–79 listening, 140. See also active listening social networks, 121–123 sponsors and sponsorship, 9–21 dynamics of, 11–13 finding, 17–20 impact of, 13 vs. mentors, 3–4, 16–17 protégé’s role and, 15–17 relationships with, 9–11, 20–21 role of, 14–15 strengths assessing your, 33–34 complementary skills for, 44–45, 49, 63–67 developing your, 44–45, 49–67 feedback on, 48–50 focusing on one, 52, 62–63 identifying, 49–52 nonlinear development of, 44–45 overdoing, 67–68 playing to your, 144–146 structure, for mentoring, 106–107

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Index

success critical tasks for, 36–38 definitions of, 31 360-degree evaluations, 46, 49–52, 62, 76 unwritten rules, for advancement, 73–76, 79

value, providing, to your mentors, 114–116, 141 weaknesses assessing your, 33–36 improving on, 44 women, sponsorship and, 19–20

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