Making Exit Interviews Count

Article from Harvard Business Review by Everett Spain and Boris Groysberg

Some pointers that I've got are:

Overall Goals

A strategic EI program provides insight into what employees are thinking, reveals problems in the organization, and sheds light on the competitive landscape. In shaping their programs, companies should focus on six goals:

1. Uncover issues relating to HR.
Companies that conduct exit interviews almost always pursue this goal but often focus too narrowly on salary and benefits. To be sure, people need a certain level of financial compensation to remain with an organization, but unless their salary is out of alignment with their peers’, money doesn’t usually drive them out the door. Plenty of other HR practices can play into an employee’s decision to leave. One leader from a food and beverage company told us that exit interviews inform his company’s succession planning and talent management process.

2. Understand employees’ perceptions of the work itself.
This includes job design, working conditions, culture, and peers. This can help managers improve employee motivation, efficiency, coordination, and effectiveness.

3. Gain insight into managers’ leadership styles and effectiveness.
This equips the organization to reinforce positive managers and identify toxic ones. One executive at a major restaurant chain told us that several exit interviews she’d recently conducted revealed that micromanagement was a big problem. The conversations, she said, “led to some very tangible outcomes,” such as establishing training and development initiatives to create better managers.

4. Learn about HR benchmarks (salary, benefits) at competing organizations.
“We use exit interviews to see how competitive we are against other employers: time off, ability to advance, different benefits, and pay packages,” an HR executive at a global food and beverage company told us. “And we want to see who is poaching our people.”

5. Foster innovation by soliciting ideas for improving the organization.
EIs should go beyond the individual’s immediate experience to cover broader areas, such as company strategy, marketing, operations, systems, competition, and the structure of his or her division. One emerging best practice is to ask every departing employee something along the lines of “Please complete the sentence ‘I don’t know why the company doesn’t just ____.’” This approach may reveal trends.

6. Create lifelong advocates for the organization.
Treat departing employees with respect and gratitude. That may encourage them to recommend their former companies to potential employees, to use and recommend the companies’ products and services, and to create business alliances between their former and new employers. “You want [a departing employee] to leave as an ambassador and customer,” said one North American financial services executive.

Tactics and Techniques

Our most troubling finding is that, as noted earlier, EIs are wholly an HR function at most companies. Indeed, HR often conducts the interviews and consolidates the data, sharing it with management only when directly asked. But this approach marginalizes the process and suggests that it is an operational duty rather than a strategic opportunity. Human resources may administer the program day to day, but it is imperative that the right line leaders participate in the interviews and that the executive committee oversees the program’s design, execution, and results. Our research suggests that the committee should meet to discuss this topic at least annually.

After defining goals and assigning ownership, organizations can focus on tactics and techniques. Here are the main factors to consider:

1. The interviewer.

We found that interviews conducted by second- or third-line managers are most likely to lead to action. Second-line managers (direct supervisors’ managers) typically receive more-honest feedback precisely because they’re one step removed from the employee. Also, these managers are in a position to follow up immediately and effectively. Their participation signals that the company cares about the opinions of departing employees.

If your company institutes a second interview post-departure, consider hiring a consultant to conduct it. An external consultant typically has several advantages over an internal interviewer, including expertise in exit interviewing and a complete lack of bias, so he or she is more likely to produce reliable data. (You might not want to use a consultant for the first EI, because you’d lose the value of the line manager’s participation.)
The interviewee.

Some organizations interview everyone who leaves, and some interview only professional employees, executives, or high potentials. We recommend making EIs mandatory for at least some employees, because research has shown that doing so increases the odds that some specific action will be taken. Our study revealed that the organizations with the most-progressive programs prioritized high potentials and stars over others—a sensible course, given that they’re harder to replace. Furthermore, high potentials are generally knowledgeable about the company and also likely to know more about competitors, because they are often recruitment targets. Those who leave can be the most valuable organizational ambassadors, because they’re likely to wield plenty of influence in the future. One global telecommunications executive told us that when a high potential leaves, “we want to know everything about it.”

2. Timing.

Some experts argue that the most productive moment to conduct the initial EI is halfway between the announcement of an intention to leave and the actual departure—after the initial rush of emotion has died down, but before the employee has checked out mentally. Unfortunately, most exit interviews are conducted during the last week of an employee’s tenure, which is probably long after he or she has disengaged.

Another effective approach is to wait until after the employee has left the company. “We typically do the exit interview about a month later, and it’s much more relaxed,” says one leader in the auto industry. “This is especially if the person who left was a high potential. They normally tell us very honestly why, and often we respond with programs to work on the problems.”

Recommendations about the optimal length of an EI vary. Some executives believe it should be kept to an hour, with the option of continuing should the conversation merit it. Others recommend up to 90 minutes. You may want to let departing employees choose the setting and timing of their exit interviews.

3. Frequency.

Should you conduct one, two, or three exit interviews? Companies can get rich feedback by scheduling several interactions—an interview, a survey, a phone call—before and after an employee departs. Many experts advocate conducting one interview while the employee is still there and one a few months after departure as an effective way of getting forthright responses. In one study, by Joel Lefkowitz, of Baruch College, and Myron Katz, of BFS Psychological Associates, 59% of former employees who answered a questionnaire mailed several months after their exit gave reasons for leaving that differed from those they’d offered during their initial exit interviews. And every employee who had initially failed to cite causes for leaving mentioned specific reasons on the questionnaire. Many company managers feel that three to six months between the initial interview and a follow-up is optimal.

4. Method.

Most experts believe that a face-to-face interview is the best way to create rapport, though some consider telephone interviews just as effective. Scholars who have found that telephone interviewing may elicit greater honesty than face-to-face meetings argue that the additional cost of in-person interviews is not justified. We generally prefer face-to-face interviews for the most valued employees. But depending on the individual who’s leaving, the questions to be asked, and other factors, telephone interviews may be preferable.

If the program calls for more than one interview, varied approaches can help elicit candid responses and test for consistency. We believe that telephone interviews and web surveys are typically best used as complements to face-to-face interviews, and that at least one in-person interview is essential to promote long-term ambassadorship.

5. Structure.

An unstructured interview can yield unexpected and helpful responses, but it makes consolidating the information more difficult, especially when turnover is heavy. The strength of standardized interview questions is that they make it easier to spot trends. However, they rarely deliver surprising insights and may come off as perfunctory, unintentionally signaling that employees’ ideas are not important to the organization. By combining the two approaches companies can more effectively probe areas of frequent dissatisfaction while also leaving room for unanticipated responses.
Manner.

Interviewers should be trained to listen more than they talk and to avoid displays of authority. They should be patient and friendly, occasionally asking open-ended questions and speaking only enough to prompt the interviewee or steer the discussion toward an important topic. They should refrain from discussing fixes for any problems that surface. For example, if a departing employee says that the company requires too many signatures for contract approval, a skilled interviewer will ask him or her to recommend a solution but won’t talk about possible company responses. “Don’t try to fix issues then,” a European telecommunications executive recommends. “Allow the employee to vent. Don’t draw it out. Don’t second-guess management.” Again, training is critical, given the emotional nature of most resignations. It takes skill to reach the heart of the matter.

Interviewers should also frame questions positively and avoid embarrassing interviewees or delving into their personal lives. They might ask how an employee liked the job (was it rewarding, challenging, too easy?) and how working conditions could be improved. Sometimes interviewers ask departing employees how their colleagues feel about their work, because someone who’s reluctant to offer a candid opinion might be comfortable ascribing his or her feelings to coworkers. Regardless of whose feelings are shared, useful insights may result.

Most employees have other jobs lined up by the time they announce their departure. An interviewer should consider asking about the new job, but not about how the two positions compare; it’s important not to make the employee feel he has to defend his or her choice. The point is to gather benchmarking information. Also, the interviewer should ask for suggestions for improving the job, the work group, or the entire company. Finally, interviewees should have an opportunity to talk about any other pressing matters or thoughts.

6. Information gained.

How will the company consolidate, share, and act on the EI data? First, any distribution plan should respect the sensitivity of the data and protect interviewees’ candor, particularly about their bosses.

Second, the distribution of data should be timed according to the executive decision cycle. A company might require senior line managers to present their subunits’ EI data in detail at an executive committee meeting, including specific actions that will be taken in response to feedback or specific reasons for not taking action. When the EI process identifies performance or opportunity gaps, the committee can demand solutions and provide the needed resources.

Leaders often ask if they should share EI data with current employees. That should be up to the executive committee; many executives argue that the company is not obligated to share the data.

Recognizing the uniqueness of each employee, organizations can create an “exit interview menu” that allows him or her to customize the EI experience by choosing the interviewer(s), location, method, length, follow-up, and so on. This design honors departing employees by letting them leave on their own terms, and can lead to better data and stronger ambassadorship in the future.

Yours,
Something Small Thinking Big

Control the Negotiation Before It Begins

Article from Harvard Business Review by Deepak Malhotra

Some pointers that I've got are:

1. Negotiate Process Before Substance

The more clarity and commitment you have regarding the process, the less likely you are to make mistakes on substance. Negotiating process entails discussing and influencing a range of factors that will affect the outcome of the deal. Ask the other party: How much time does your company need to close the deal? Who must be on board? What factors might slow down or speed up the process? Are there key milestones or dates we should be aware of? Remember to find out simple things such as, Who will be in the meeting tomorrow? What will the agenda be? Since we are not going to discuss the issues of importance to us in the next meeting, when will we address them?

Of course, you can’t always get clear answers to every question at the outset—and sometimes it is premature to ask certain questions. But you should seek to clarify and reach agreement on as many process elements as possible—and as early as is appropriate—to avoid stumbling on substance later.

2. Normalize the Process

Unless business partners understand what is “normal” in a given context or culture, they are likely to misunderstand or overreact to adverse events. The same is true in negotiations of all kinds: It is important to normalize the process. If you’ve ever been involved in an ugly conflict that went into mediation, you may have seen this in action. When a good mediator sits down with parties who are in a bitter dispute, she might say something like, “You think you hate each other today? I can assure you, about three days into this process, you’re going to hate each other even more. And when that happens, I want you to remember something: That’s normal.”

If the mediator does not give this warning, the parties are much more likely to abandon the process when emotions heighten and things seem to be falling apart. But if she explains at the outset that it’s normal for things to get worse before they get better, the parties are more likely to keep at it. By normalizing the process, she effectively manages their expectations.

The same principle applies to any negotiation where there’s a risk that things will not go perfectly smoothly. If you anticipate delays or disruptions on your side, tell your counterparts. This allows you to shape how they will interpret a negative event should one occur and to ensure that they do not overweight its significance. You’ll have a much harder time trying to influence their perceptions or win back their trust after something goes wrong that they did not expect.

Normalizing the process entails discussing, in advance, any factors that might cause the other side to question your intentions or ability or to doubt the likelihood of a successful outcome. You might explain typical barriers that need to be overcome, moments during the process when it’s common for parties to feel anxious or pessimistic, events that might delay progress, and the difference between disruptions that are commonplace and easy to resolve and ones that are more serious.

Encourage the other side to do the same for you. People often hesitate to discuss “what might go wrong,” because they’re focused on presenting themselves and the merits of the deal in the best possible light. This is especially true in certain cultures and in contexts where competition is fierce. Your counterpart might be thinking, “Why should I talk about problems if my rivals are pretending things will be great?”

That’s understandable. If other parties think that mentioning a potential disruption could cost them the business, or that you’ll use it as a lever to extract greater concessions, they’re unlikely to be truthful. To encourage people to be open about problems, make it safe for them. Explain that you are experienced enough to know that every deal and relationship is likely to encounter difficulties and disruptions, and that you want to learn more about the specific risk factors that might play a role in this case. And if you can signal (or commit to) having no intention of holding those factors against them, you have a better chance of reaching an understanding that works for both sides.

3. Map Out the Negotiation Space

This consists of every party that can affect the negotiation, along with any party that will be affected by the negotiation. In my experience, a strategy that makes perfect sense when you’re thinking bilaterally—that is, about the relationship between any two parties in the negotiation—can suddenly become ineffective or even disastrous when you take a multilateral perspective. I encouraged my client to evaluate the interests, constraints, alternatives, and perspective of all the relevant parties.

In the real world, you’ll never have as complete a picture as you’d like, but you put yourself at further disadvantage if you focus too narrowly on the party on the other side of the table. You have to assess the perspective of all the parties that can influence or are influenced by the deal: Who has the ability to influence the person on the other side of the table? How might the strategy or actions of other parties change your alternatives, for better or worse? How does the deal affect the interests of those who are not at the table? How will this negotiation affect your leverage with future negotiation partners? If multiple parties are involved in the deal, does it make sense to negotiate with them simultaneously or in sequence, together or separately?

Your analysis might suggest a change of strategy—that you should negotiate with a different party first, delay the deal or speed it up, bring others into the room, expand or contract the scope of the deal, and so on.

4. Control the Frame

The outcome of a negotiation depends a great deal on each side’s leverage—the better your outside options are and the more ways you have to reward or coerce the other side, the more likely you are to achieve your objectives. But the psychology of the deal can be just as important.

In my experience, the frame, or psychological lens, through which the parties view the negotiation has a significant effect on where they end up. Are the parties treating the interaction as a problem-solving exercise or as a battle to be won? Are they looking at it as a meeting of equals, or do they perceive a difference in status? Are they focused on the long term or the short term? Are concessions expected, or are they seen as signs of weakness?


Effective negotiators will seek to control or adjust the frame early in the process—ideally, before the substance of the deal is even discussed. Here are three elements of framing that negotiators would be wise to consider.

A. Value versus price.

One of the most common mistakes salespeople make in those situations—without even realizing it—is to apologize for having a high price. They do this when they say “I understand it’s pricey, but…” or when they hastily signal a willingness to adjust the price. My advice: Always justify your offer, but never apologize for it. When you apologize, you signal that even you don’t think the price is appropriate, and you give the other side license to haggle. The entire frame of the negotiation becomes about price, when what you really want to discuss is value.

A better response would be, “What you seem to be asking is, How is it that despite a higher price, we still have a long and growing list of customers? We both know that no one will pay more for something than it’s worth, so let’s discuss the value we bring so that you can decide what’s best for you.”

In negotiations of all kinds, the sooner you can shift the discussion away from the cost to your counterpart and focus on the value you bring to the table, the more likely it is that you will be able to monetize that value.

B. Your alternatives versus theirs.

Research and experience suggest that people who walk into a negotiation consumed by the question “what will happen to me if there is no deal?” get worse outcomes than those who focus on what would happen to the other side if there’s no deal. When you are overly concerned with your own alternatives, and especially when your outside options are weak, you think in terms of “what will it take (at a minimum) to get them to say yes?” When you make the negotiation about what happens to them if there is no deal, you shift the frame to the unique value you offer, and it becomes easier to justify why you deserve a good deal.

C. Equality versus dominance.

To keep the dominance frame from taking hold, we started shaping expectations and perceptions at the very beginning, before we even considered the economics of the deal. For example, any time our counterpart made a procedural demand—however small—that we felt they would not have made of an equal, we respectfully pushed back on it. Any time they included a provision in the term sheet that seemed one-sided, even if it would not have been a costly concession, we redrafted it to be symmetrical. And throughout the negotiation, we made sure they understood that although our firm was much smaller, we were equals in this negotiation because of the tremendous value we offered. While I am not an advocate of nitpicking on minor issues, in this case we did so intentionally to help set the right frame.

Negotiators can shape the frame in countless other ways and on many other dimensions. At the very least, you want to ensure that the psychological lens that takes hold respects the value you bring to the table.

Yours,
Something Small Thinking Big

Emotion and the Art of Negotiation

Article from Harvard Business Review by Alison Wood Brooks

Some pointers that I've got are:

Avoiding Anxiety

Anxiety is a state of distress in reaction to threatening stimuli, particularly novel situations that have the potential for undesirable outcomes. In contrast to anger, which motivates people to escalate conflict (the “fight” part of the fight-or-flight response), anxiety trips the “flight” switch and makes people want to exit the scene.

Because patience and persistence are often desirable when negotiating, the urge to exit quickly is counterproductive. But the negative effects of feeling anxious while negotiating may go further.

People experiencing anxiety made weaker first offers, responded more quickly to each move the counterpart made, and were more likely to exit negotiations early (even though their instructions clearly warned that exiting early would reduce the value they received from the negotiation). Anxious negotiators made deals that were 12% less financially attractive than those made by negotiators in the neutral group. We did discover one caveat, however: People who gave themselves high ratings in a survey on negotiating aptitude were less affected by anxiety than others.

Those experiments examined what happens when people feel anxious. But what happens when they express that anxiety, making it clear to their counterparts that they’re nervous (and perhaps vulnerable)? We found that relative to people who did not feel anxious, they were less confident, more likely to consult others when making decisions, and less able to discriminate between good and bad advice. In the most relevant of these experiments, we found that anxious participants did not discount advice from someone with a stated conflict of interest, whereas subjects feeling neutral emotions looked upon that advice skeptically. Although this research didn’t directly address how the subjects would negotiate, it suggests that people who express anxiety are more likely to be taken advantage of in a negotiation, especially if the other party senses their distress.

The takeaway from both research and practice is clear: Try your utmost to avoid feeling anxious while negotiating. How can you manage that? Train, practice, rehearse, and keep sharpening your negotiating skills. Anxiety is often a response to novel stimuli, so the more familiar the stimuli, the more comfortable and the less anxious you will feel. (That’s why clinicians who treat anxiety disorders often rely on exposure therapy: People who are nervous about flying on airplanes, for instance, are progressively exposed to the experience, first getting used to the sights and sounds, then sitting in airliner seats, and ultimately taking flights.) Indeed, although many people enroll in negotiation classes to learn strategies and increase skills, one of the primary benefits is the comfort that comes from repeatedly practicing deal making in simulations and exercises. Negotiation eventually feels more routine, so it’s not such an anxiety-inducing experience.

Another useful strategy for reducing anxiety is to bring in an outside expert to handle the bargaining. Third-party negotiators will be less anxious because their skills are better honed, the process is routine for them, and they have a lower personal stake in the outcome. Outsourcing your negotiation may sound like a cop-out, but it’s a frequent practice in many industries. Home buyers and sellers use real estate brokers partly for their negotiating experience; athletes, authors, actors, and even some business executives rely on agents to hammer out contracts. Although there are costs to this approach, they are often more than offset by the more favorable terms that can be achieved. And although anxious negotiators may have the most to gain from involving a third party (because anxiety can be a particularly difficult emotion to regulate in an uncomfortable setting), this strategy can also be useful when other negative emotions surface.


Managing Anger

Like anxiety, anger is a negative emotion, but instead of being self-focused, it’s usually directed toward someone else. In most circumstances, we try to keep our tempers in check. When it comes to negotiating, however, many people believe that anger can be a productive emotion—one that will help them win a larger share of the pie.

This view stems from a tendency to view negotiations in competitive terms rather than collaborative ones. Researchers call this the fixed-pie bias: People, particularly those with limited experience making deals, assume that a negotiation is a zero-sum game in which their own interests conflict directly with a counterpart’s. (More-experienced negotiators, in contrast, look for ways to expand the pie through collaboration, rather than nakedly trying to snatch a bigger slice.) Anger, the thinking goes, makes one seem stronger, more powerful, and better able to succeed in this grab for value.

Angry negotiators are less accurate than neutral negotiators both in recalling their own interests and in judging other parties’ interests. And angry negotiators may seek to harm or retaliate against their counterparts, even though a more cooperative approach might increase the value that both sides can claim from the negotiation.

In many contexts, feeling or expressing anger as a negotiating tactic can backfire. So in most cases, tamping down any anger you feel—and limiting the anger you express—is a smarter strategy. This may be hard to do, but there are tactics that can help.

Building rapport before, during, and after a negotiation can reduce the odds that the other party will become angry. If you seek to frame the negotiation cooperatively—to make it clear that you’re seeking a win-win solution instead of trying to get the lion’s share of a fixed pie—you may limit the other party’s perception that an angry grab for value will work well. If the other party does become angry, apologize. Seek to soothe. Even if you feel that his anger is unwarranted, recognize that you’re almost certainly better positioned tactically if you can reduce the hostility.

Perhaps the most effective way to deal with anger in negotiations is to recognize that many negotiations don’t unfold all at once but take place over multiple meetings. So if tensions are flaring, ask for a break, cool off, and regroup. This isn’t easy when you’re angry, because your fight-or-flight response urges you to escalate, not pull back. Resist that urge and give the anger time to dissipate. In heated negotiations, hitting the pause button can be the smartest play.

Finally, you might consider reframing anger as sadness. Though reframing one negative emotion as another sounds illogical, shared feelings of sadness can lead to cooperative concession making, whereas oppositional anger often leads to an impasse.

Handling Disappointment and Regret

Disappointment can be a powerful force when it’s expressed to the other party near the end of the negotiation. There’s a relationship between anger and disappointment—both typically arise when an individual feels wronged—and it’s useful to understand how one can be used more constructively than the other. (Think back to how you reacted as a child if your parents said “I’m very disappointed in you” instead of “I’m very angry with you.”) Although expressing anger may create defensiveness or increase the odds of a standoff, expressing disappointment can serve a more tactical purpose by encouraging the other party to look critically at her own actions and consider whether she wants to change her position to reduce the negative feelings she’s caused you.

Research shows that one cause of disappointment in a negotiation is the speed of the process. When a negotiation unfolds or concludes too quickly, participants tend to feel dissatisfied. They wonder if they could or should have done more or pushed harder.

Regret is slightly different from disappointment. While the latter tends to involve sadness about an outcome, someone feeling regret is looking a little more upstream, at the course of actions that led to this unhappy outcome, and thinking about the missteps or mistakes that created the disappointment. Research shows that people are most likely to regret actions they didn’t take—the missed opportunities and errors of omission, rather than errors of commission. That can be a powerful insight for negotiators, whose primary actions should be asking questions, listening, proposing solutions, and brainstorming new alternatives if the parties can’t agree. Ironically, people often don’t ask questions while negotiating: They may forget to raise important matters or feel reluctant to probe too deeply, deeming it invasive or rude. Those fears are often misplaced. In fact, people who ask a lot of questions tend to be better liked, and they learn more things. In negotiations, information is king and learning should be a central goal. One way to reduce the potential for regret is to ask questions without hesitation. Aim to come away from the negotiation with the sense that every avenue was explored.

Skilled negotiators use another technique to minimize the odds of regret: the “post-settlement settlement.” This strategy recognizes that tension often dissipates when there’s a deal on the table that makes everyone happy, and sometimes the best negotiating happens after that tension is released. So instead of shaking hands and ending the deal making, one party might say, “We’re good. We have terms we can all live with. But now that we know we’ve reached an agreement, let’s spend a few more minutes chatting to see if we can find anything that sweetens it for both sides.” Done ineptly, this might seem as if one party is trying to renege or renegotiate. However, when handled deftly, a post-settlement settlement can open a pathway for both sides to become even more satisfied with the outcome and stave off regrets.

Tempering Happiness and Excitement

The National Football League prohibits and penalizes “excessive celebrations” after a touchdown or big play because such conduct can generate ill will. For the same reason, the “winner” in a deal should not gloat as the negotiations wrap up.

Although it’s unpleasant to feel disappointed after a negotiation, it can be even worse to make your counterparts feel that way. And in certain situations, showing happiness or excitement triggers disappointment in others. The best negotiators achieve great deals for themselves but leave their opponents believing that they, too, did fabulously, even if the truth is different. In deals that involve a significant degree of future collaboration—say, when two companies agree to merge, or when an actor signs a contract with a producer to star in an upcoming movie—it can be appropriate to show excitement, but it’s important to focus on the opportunities ahead rather than the favorable terms one party just gained.

Another danger of excitement is that it may increase your commitment to strategies or courses of action that you’d be better off abandoning.


There are two lessons for negotiators. 

First, be considerate: Do not let your excitement make your counterparts feel that they lost. 

Second, be skeptical: Do not let your excitement lead to overconfidence or an escalation of commitment with insufficient data.

Managing Your Counterpart’s Emotions

Negotiating is an interpersonal process. There will always be at least one other party (and often many more) involved. In the adjoining article I discuss how to manage your own emotions during a negotiation. But what about the other people at the table? Can you manage their emotions as well? I suggest two strategies for doing so.

1. Be observant. Perceiving how other people are feeling is a critical component of emotional intelligence, and it’s particularly key in negotiations (as Adam Galinsky and his colleagues have found). So tune in to your counterpart’s body language, tone of voice, and choice of words. When her verbal and nonverbal cues don’t match up, ask questions. For example, “You are telling me you like this outcome, but you seem uneasy. Is something making you uncomfortable?” Or “You say you’re angry, but you seem somewhat pleased. Are you truly upset about something? Or are you trying to intimidate me?”

Asking pointed questions based on your perceptions of the other party’s emotional expressions will make it easier for you to understand her perspective (a task people are shockingly bad at, according to research by Nicholas Epley). It will also make it difficult for a counterpart to lie to you; evidence suggests that people prefer to tell lies of omission about facts rather than lies of commission about feelings.

2. Don’t be afraid to exert direct influence on your counterpart’s emotions. This may sound manipulative or even unscrupulous, but you can use this influence for good. For example, if your counterpart seems anxious or angry, injecting humor or empathetic reassurance can dramatically change the tone of the interaction. By the same token, if your counterpart seems overconfident or pushy, expressing well-placed anger can inspire a healthy dose of fear.

In recent research with Elizabeth Baily Wolf, I have found that it’s possible to go even further in managing others’ emotions: You display an emotion, your counterpart sees it, and then you shape his interpretation of it. For example, imagine that you start crying at work. (Crying is a difficult-to-control and often embarrassing behavior.) Saying “I’m in tears because I’m passionate” rather than “I’m sorry I’m so emotional” can completely change the way others react and the way they view your self-control and competence.

Yours,
Something Small Thinking Big

Be Your Own Best Advocate

Article from Harvard Business Review by Deborah M. Kolb

Some pointers that I've got are:

Recognize

Negotiation opportunities aren’t always obvious, especially if you’ve never thought to ask for anything in the past. But some routine situations cry out for bargaining. For example, if you say yes to a special assignment or a request for help when you want to say no, that’s an opportunity to negotiate for something in return. When you’re asked to take on a new initiative, with its attendant risks, that’s an opportunity to negotiate for support. If your workload expands beyond what’s reasonable and cuts into your family time, that’s an opportunity to negotiate for more resources or to change the scope of your role. You must pick your battles, though. The issue should be important to you, but your desired outcome should not only benefit you personally but also benefit your organization, as a result of your increased productivity and commitment and new cultural norms that allow colleagues to achieve the same. The decision to negotiate should be made with a sense of the end in mind.

Prepare

Preparation is critical to any negotiation. But how can you prepare for an informal one that your counterpart isn’t expecting?

First, gather good information.

The more you know about what others have asked for and been granted at work, the more comfortable you’ll feel crafting your own negotiation. You also need intelligence on the parties with whom you’ll be negotiating. How do they like to receive news or special requests? Do they want a lot of advance notice? Do they want you to present a solution or to develop one with you?

Second, position yourself.

Interdependence gives people a reason to negotiate. So look at how your work enables your counterpart and others to succeed; that will help you discern what he or she values in you and assess yourself in a currency that matters. Another way to think about your value proposition and your relative bargaining position is to consider your—and your partner’s—“best alternative to a negotiated agreement,” or BATNA (as Roger Fisher and William Ury call it in Getting to Yes). 

Third, anchor with options.

Negotiations require creativity. When you present many ideas, you’re framing the negotiation in a way that encourages the other party to join. You shouldn’t fixate on a single solution that works for you. Instead consider what matters to your counterpart and find multiple ways to satisfy both of you.

In developing options, it helps to think what good reasons your counterpart might have for saying no to an arrangement you propose. These are on the hidden agenda of any negotiation.

Initiate

Any two people typically feel asymmetrical desires to engage in everyday negotiations. One has a problem or sees an opportunity; the other probably doesn’t and therefore expects business as usual. How can you shift a normal interaction into a collaborative rather than combative negotiation? Start by making your value visible. If the other party stonewalls, you can consider various tactics. One is to round up allies who will vouch for your value and encourage the person to negotiate with you. Another approach is to acknowledge and address one or more of your counterpart’s good reasons for saying no to prove that you’ve thought about his or her perspective. Often the response will be “Right, this is my concern,” which opens the door to a conversation about the issue. You can also introduce a BATNA, but you must do so carefully, so it’s not perceived as a threat. You might mention yours and then retract it. To make your counterpart more aware of his or her own BATNA, ask a question such as “What do you think will happen if we don’t have this conversation?”

Navigate

Once you’ve enticed the other party to engage in a negotiation, you must go into the conversation with an open mind. The proposals you’re prepared to offer are just starting points for an agreement. 

Three types of questions can help the two of you develop a plan that works for everyone.

1. Hypothesis-testing questions start with “What if” and enable you to introduce ideas, whether broad or specific, and solicit a reaction. 
2. Reciprocity questions involve if-then scenarios and build the notion of trading into the negotiation: “If I agree to do X, then what will you do?” 
3. Circular questions, which simultaneously introduce and gather information, ensure that the conversation is collaborative, not adversarial. They emphasize the relationship between you and your counterpart and often unearth deeper issues at stake. 

Yours,
Something Small Thinking Big

The New Science of Customer Emotions

Article from Harvard Business Review by Scott Magids, Alan Zorfas and Daniel Leemon

Some pointers that I've got are:

High-Impact Motivators - Hundreds of “emotional motivators” drive consumer behavior. Below are 10 that significantly affect customer value across all categories studied.

1. Stand out from the crowd - Project a unique social identity; be seen as special
2. Have confidence in the future - Perceive the future as better than the past; have a positive mental picture of what's to come
3. Enjoy a sense of well-being - Feel that life measures up to expectations and that balance has been achieved; seek a stress-free state without conflicts or threats
4. Feel a sense of freedom- Act independently, without obligations or restrictions
5. Feel a sense of thrill- Experience visceral, overwhelming pleasure and excitement; participate in exciting, fun events
6. Feel a sense of belonging- Have an affiliation with people they relate to or aspire to be like; feel part of a group
7. Protect the environment- Sustain the belief that the environment is sacred; take action to improve their surroundings
8. Be the person I want to be- Fulfill a desire for ongoing self-improvement; live up to their ideal self-image
9. Feel secure- Believe that what they have today will be there tomorrow; pursue goals and dreams without worry
10. Succeed in life- Feel that they lead meaningful lives; find worth that goes beyond financial or socioeconomic measures


Why Emotional Connections Matter

Although brands may be liked or trusted, most fail to align themselves with the emotions that drive their customers’ most profitable behaviors. Some brands by nature have an easier time making such connections, but a company doesn’t have to be born with the emotional DNA of Disney or Apple to succeed. Even a cleaning product or a canned food can forge powerful connections.

The process, in brief, looks like this: Applying big data analytics to detailed customer-data sets, we first identify the emotional motivators for a category’s most valuable customers. High-value automobile customers, for example, might want to “feel a sense of belonging” and “feel a sense of freedom.” Next we use statistical modeling to look at a large number of customers and brands, comparing survey results about people’s emotional motivators with their purchase behavior and identifying spikes in buying that are associated with specific motivators. This reveals which motivators generate the most-profitable customer behaviors in the category. We then quantify the current and potential value of motivators for a given brand and help identify strategies to leverage them.

The model also allows us to compare the value of making strong emotional connections with that of scoring well on standard customer metrics such as satisfaction and brand differentiation, thus highlighting the potential gains from looking beyond traditional measures. We find that customers become more valuable at each step of a predictable “emotional connection pathway” as they transition from (1) being unconnected to (2) being highly satisfied to (3) perceiving brand differentiation to (4) being fully connected.

Although customers exhibit increasing connection at each step, their value increases dramatically when they reach the fourth step: Fully connected customers are 52% more valuable, on average, than those who are just highly satisfied. In fact, their relative value is striking across a variety of metrics, such as purchases and frequency of use.

The pathway is an important guide to where companies should invest—and it reveals that they often invest in the wrong places. To increase revenue and market share, many companies focus on turning dissatisfied customers into satisfied ones. However, our analysis shows that moving customers from highly satisfied to fully connected can have three times the return of moving them from unconnected to highly satisfied. And the highest returns we’ve seen have come from focusing on customers who are already fully connected to the category—from maximizing their value and attracting more of them to your brand.

Four insights from our research are especially relevant to firms looking to build on emotional connection.

1. Emotional motivators vary by category and brand.

Of the 300-plus motivators we’ve identified, 25 significantly affect customer value across all the categories we’ve analyzed. Anywhere from five to 15 additional motivators are important in any given category. For example, the sense that a home furnishings store “helps me be creative” inspires consumers to shop there more often. The wish to “feel revived and refreshed” drives loyalty to fast-food restaurants. Emotional motivators also vary within categories, depending on the desires of brands’ most valuable customers. Because brands differ in how well they align with their customers’ motivators, each may have a different starting point in any effort to strengthen emotional connections—and that point won’t necessarily relate to conventional measures of brand perception.

2. Emotional motivators vary across customer segments.

Recall the credit card designed with Millennials in mind. Our model uncovered desires to “protect the environment” and “be the person I want to be” as key motivators in the banking category for that age group. (Traditional industry motivators such as desires to “feel secure” and to “succeed in life” are more typical of older groups.) The bank crafted messaging and features to connect to those sentiments, leading to its fastest-growing new credit card.

3. Emotional motivators for a given brand or industry vary with a person’s position in the customer journey.

In banking, the desire to “feel secure” is a critical motivator when attracting and retaining customers early on. When cross-selling products later, the wish to “succeed in life” becomes more important. To maximize results, companies must align their emotional-connection strategies with their specific customer-engagement objectives—acquisition, retention, cross-selling, and so on.

4. Emotional-connection-driven growth opportunities exist across the customer experience, not just in traditional brand positioning and advertising.

For example, social media can have a big impact on emotional connection. One condiments brand found that 60% of its social-network-affiliated customers (especially followers on Facebook, Twitter, and Pinterest)—versus 21% of all customers—were emotionally connected. It accelerated growth in a matter of months by increasing its focus on its social media network, developing its online customer community, and pointing customers to the website for recipes and promotions.
Putting Emotional Connections to Work

Let’s look at how an emotional-connection strategy paid off for a national fashion retailer. The company was struggling with common industry challenges. Although it had a well-known brand and a strong market presence, same-store sales were stagnating, and promotional pricing was shrinking margins. So it focused on cost management, logistical efficiency, and streamlining the merchandise and store mix—with limited success. Over the past two years we worked with the retailer on a four-part strategy to identify, understand, and quantify the value of the most emotionally connected customers. This exposed large, unexploited opportunities and allowed the retailer to better direct investments across the firm.

A. Target connected customers.

We set out to answer two basic questions: How valuable were the retailer’s fully connected customers, and could the company attract more of them? We used statistical techniques to measure the strength of customers’ emotional connections with the retailer and with its competitors. The process began with surveys to discern how consumers related to key motivators in the category and with analysis to see which motivators best predicted purchase behavior. We then modeled the financial impact of building emotional connections with customers at each step on the pathway from unconnected to fully connected.

Our analysis showed that although fully connected customers constituted just 22% of customers in the category, they accounted for 37% of revenue and they spent, on average, twice as much annually ($400) as highly satisfied customers. Enhancing emotional connection could be a viable growth strategy if the retailer could attract fully connected customers from competitors, transform satisfied customers into fully connected ones, or both.

Further segmentation revealed a group of especially valuable customers. We labeled them Fashion Flourishers, because apparel connects to their deep desire for excitement, social acceptance, and self-expression. As a group, Flourishers are the most emotionally connected segment by far; half are already fully connected to the category. Comparing the ratios of various emotion-based segments’ spending to those segments’ size highlights extraordinary differences in value: Flourishers have a ratio of 1.9—nearly twice the market average and more than nine times that of the least-connected group (whom we called Can’t Please Them, and whose ratio is just 0.2). Given the relatively fixed cost structure of retailing, acquiring and retaining Flourishers represented an opportunity to boost revenue and margins.

B. Quantify key motivators.

Next, by analyzing tens of thousands of Flourishers across the category, we quantified the impact of more than 40 motivators on the group’s purchasing, spending, loyalty, and advocacy. We identified the most important category motivators—the ones that bore the strongest relationship to purchases—and assessed the retailer’s competitive position in each. The financial analysis and modeling showed that further investments to strengthen the customer experience around the desires to “feel a sense of belonging,” “feel a sense of thrill,” and “feel a sense of freedom”—the motivators driving category purchase behavior and for which the retailer already had the strongest position—were likely to yield the highest ROI. Those motivators therefore became the focus of specific customer-experience investments.

C. Optimize investments across functions.

To maximize opportunities from emotional connection, companies must look beyond the marketing department. The retailer examined every function and customer touchpoint to find ways to enhance high-ROI emotional motivators. This brought four major investment areas into focus: stores, online and omnichannel experiences, merchandising, and message targeting.

D. Systematize, measure, and learn.
Leveraging emotional connection does not require turning your business processes upside down; you can embed relevant strategies into existing work streams. This is most effectively done by making emotional connection a key performance indicator and including it on the cross-functional senior-management dashboard.

The retailer developed a scorecard that gives the CEO and the executive team a single-page view of customers’ progression on the emotional-connection pathway, along with the increase or decrease in connected customers of the company and its key competitors. The scorecard shows the correlation of customers’ emotional-connection scores with lifetime value measures such as annual spending, churn, and tenure. It also shows how the business impacts of specific emotions are trending and how Flourishers engage with key in-store and omnichannel touchpoints that drive emotional connection. In addition, the retailer includes emotional-connection metrics in its ongoing testing of media messages, store designs, and digital and mobile experiences.


Getting Started

Identifying and leveraging customers’ emotional motivators can be broken into three phases.

First, inventory your existing market research and customer insight data. You will probably find qualitative descriptions of your customers’ motivating emotions, such as what aspects of life they value most (family, community, freedom, security) and what they aspire to day-to-day and in the future. From there, pursue research to add detail to your understanding of those emotions. Define a set of emotional motivators to probe—the list in the exhibit “High-Impact Motivators” will provide ideas, as will your qualitative research. Online surveys can help you quantify the relevance of individual motivators. Are your customers more driven by life in the moment or by future goals? Do they place greater value on social acceptance or on individuality? Don’t assume you know what motivates customers just because you know who they are. Young parents may be motivated by a desire to provide security for their families—or by an urge to escape and have some fun (you will probably find both types in your customer base). And don’t undermine your understanding of customers’ emotions by focusing on how people feel about your brand or how they say it makes them feel. You need to understand their underlying motivations separate from your brand.

Second, analyze your best customers—those who buy and advocate the most, are the least price-sensitive, and are the most loyal. To do this, identify those who are highly satisfied with your brand—whatever the degree of their emotional connection—and divide them into quartiles according to annual purchases, advocacy, and so on. Examine the top quartile to see how the characteristics and behavior of your best customers differ from those of people in the other quartiles. Look at demographics, whether people buy in person or online, how much they buy from your competitors, and where they get their information about your brand (traditional media, social networks, and so on). Compare the emotional motivators of your best customers with the ones you’ve researched for your overall customer base and see which are specific or more important to the high-value group. Find the two or three of these key motivators that have a strong association with your brand. They will serve as an initial guide to the emotions you need to connect with in order to grow the most valuable customer segment of your business and to the marketing strategies and customer experience tactics that will provide the greatest connection opportunities.

Third, make the organization’s commitment to emotional connection a key lever for growth. Use the language of emotional connection when you talk about your customers—not just in the marketing department but across the firm. In our experience, successful strategies based on emotional connection require buy-in from the top and must be embraced across functions. For example, if people in product development are working on a version that’s easier to use, they shouldn’t just ask whether customers will be satisfied with it; they should learn which emotional motivators it resonates with and how it will strengthen emotional connections.

Yours,
Something Small Thinking Big

The Organizational Apology

Article from Harvard Business Review by Maurice E. Schweitzer, Alison Wood Brooks, and Adam D. Galinsky

Some pointers that I've got are:

Companies need clear guidelines for determining whether a misstep merits an apology and, when it does, how to deliver the message. In this article, we present an apology formula, drawn from our work and research in management and psychology, that provides a diagnostic and practical guidance on the who, what, where, when, and how of an effective apology. The bottom line for serious transgressions: Senior leaders must immediately express candor, remorse, and a commitment to change in a high-profile setting—and make it sincere.


The Apology Dilemma

Let’s recognize two facts about apologies at the outset: First, we are psychologically predisposed to find reasons (or excuses) to delay or avoid saying we’re sorry. Apologizing feels uncomfortable and risky. There’s a loss of power or face involved—it rearranges the status hierarchy and makes us beholden, at least temporarily, to the other party. That doesn’t feel good. So it’s no wonder people try to avoid dwelling on or drawing attention to mistakes and that when one is pointed out, they get defensive, arguing their side of the story and shifting blame to others.

Apologies are even more difficult in an organizational context. When considering whether and how to apologize, even seasoned leaders can become gripped by indecision. That’s understandable. A company mistake is often caused by a single division or employee, and a bad situation is frequently made worse by events beyond its control. It can feel unjust for a CEO or an entire organization to have to take responsibility.

Second, companies have a strong tendency to evaluate the situation through a legal lens. Corporate counsel may fixate on whether any laws were broken and warn managers that an apology might be construed as an admission of liability (possibly exposing the company to litigation) rather than as an effort to empathize with the wronged party. This is an important distinction, because effective apologies address the recipients’ feelings—they don’t prove a point. Unfortunately, a litigious perspective has become ingrained in many organizations: Even a leader who isn’t actively consulting with an attorney may worry that an apology could create legal problems.

Companies need to stop thinking this way. Most apologies are low cost—and many create substantial value. They can help defuse a tense situation, and fears of litigation are often unfounded. Consider health care providers. For many years, medical professionals were advised not to apologize when they made mistakes that hurt or even killed patients, because doing so might make the hospital vulnerable to a malpractice lawsuit. But research has revealed that when some hospitals began allowing doctors to offer apologies to patients and families, or even made apologizing mandatory, the likelihood of litigation was reduced.
Should You Apologize?

If a company is debating whether or not to apologize, managers should consider the nature and severity of the violation and the costs and benefits of offering an apology. Four questions can help determine if an apology is necessary.

1. Was there a violation, whether real or perceived?

When a company apologizes, it accepts full or partial blame for causing harm. So it needs to first determine whether a violation has in fact occurred and if so, whether the company is responsible. But here’s the tricky part—this needs to be done quickly and perceptions of responsibility matter.

Consider the crisis Coca-Cola faced in 1999. It began on June 8, when a schoolboy in Belgium reported feeling ill after drinking a Coke. Within days, hundreds of people had attributed fevers, dizziness, and nausea to Coca-Cola beverages, and many made their way to hospitals. At first, the company insisted that its products did not pose a health risk and that bad carbon dioxide at a plant in Antwerp had triggered unnecessary alarm. CEO M. Douglas Ivester, hoping that the crisis would “blow over,” said that he’d decided to “take a lower profile on this.” But by the end of the week, the company was forced to remove more than 50 million beverages from the shelves in France, Germany, and Belgium. Finally, more than a week after the first incident, Ivester said publicly that he and his executives “deeply regret any problems encountered by our European consumers.”

If we put ourselves in Ivester’s shoes, we can easily understand why Coca-Cola might have had trouble making a quick decision about whether to apologize. First, we’d all prefer to see the results of an internal investigation and understand exactly what caused the bad outcome—and how to prevent it from happening again—before making any statements. Second, we’d be just as likely to hope that the issue would fade from attention. And third, we’d probably feel defensive and that we’d been unfairly blamed. The senior executives at Coca-Cola honestly believed that the reported health concerns were exaggerated and that many of the complaints had nothing to do with their products.

But companies must overcome the tendency to wait, to keep a low profile, or to argue the facts. Instead, leaders should consider others’ perceptions of the potential violation and move swiftly to address them. An apology enables an executive to express concern and convey the organization’s values—even as an investigation into exactly what happened and who was responsible unfolds.

As we make the apology decision, we need to consider the “psychological contract”—the expectations customers, employees, business partners, or other stakeholders have about an organization’s responsibilities and what is right or fair. This often extends well beyond any explicit contract. To understand those expectations, managers have to imagine the situation from different vantage points.

Consider Mattel’s launch of Hello Barbie, a doll that records and uploads conversations to Mattel online so that it can make personalized responses. Mattel thought that the doll’s ability to remember a child’s name and preferences would be a unique selling point, but critics quickly voiced privacy concerns. Mattel never intended to cause harm, but consumers’ perceptions of an “eavesdropping Barbie” were so negative that it was forced to offer public reassurances to customers that Mattel was committed to safety and security. Presumably, leaders could have predicted that a toy that recorded children’s play and uploaded it to the company would raise flags. In the Facebook situation, had the company considered the perspectives of its stakeholders before launching its emotion manipulation study, it might have avoided much of the fallout. And Coca-Cola should have known that even the perception of health concerns related to its products should be addressed immediately.

2. Was the violation core or noncore?

Certain activities and responsibilities are central to a company’s products, services, and mission. Other responsibilities are peripheral or less consequential. If an automaker’s vehicles contain a flaw that imperils drivers’ safety or a restaurant’s diners suffer food poisoning, those are core violations. When the accounting firm Arthur Andersen certified Enron’s financial statements and failed to expose the company’s massive fraud, it violated its core responsibility.

Other violations might involve a business function that’s outside the company’s operational core. For instance, Apple and other companies have been criticized for using transfer pricing and other financial tools to minimize their tax bills—a practice that offends people who see paying taxes as a civic duty. Although it constitutes a violation for at least some of their consumers, it is not core, because tax accounting is not those companies’ central activity.

Core violations pose a fundamental threat to the mission of the organization. Therefore, a robust apology is critical—and a botched one can cause significant damage. A company that has committed a noncore violation has greater flexibility, though an apology may still be warranted or beneficial.

3. How will the public react?

Sometimes violations that harm only a single person or a small group can remain private matters. But remember, thanks to Twitter, Instagram, Yelp, Facebook, and other social media outlets, a single customer complaint can easily go viral and influence the perceptions of millions of potential customers. Even the smallest transgressions can blow up into epic (and costly) public relations nightmares.

Consider what happened to United Airlines in 2008. The company allegedly damaged a Canadian singer’s guitar during a flight from Halifax to Nebraska and then subjected him to a Kafkaesque customer service experience. In the pre-internet era, the public would probably never have learned about the incident. Social media has changed that: In this case, the frustrated singer wrote a song called “United Breaks Guitars” and posted a video of it on YouTube. It became a sensation, with nearly 15,000 views its first day and more than 14 million since. Eventually, Rob Bradford, United’s managing director of customer solutions, telephoned the singer and apologized directly; he also asked if the airline could use the video to help improve its customer service.

In gauging the probable reaction to an incident, companies should take into account the relative size and status of the parties. A violation committed by a large, powerful, or high-status organization (such as United, Google, Walmart, or the U.S. government) against a low-status, low-power person or group is more likely to engender public outrage—and require an apology—than a violation committed by a mom-and-pop business or one that hurts only wealthy individuals or corporations.

4. Is the company willing to commit to change?

In assessing whether or not to apologize, organizational leaders must also focus on the extent to which they are willing—and able—to change the company’s behavior. If they can’t or don’t want to do things differently in the future, the case for making an apology is weak, because it will sound hollow and unconvincing.

When Target and Home Depot suffered cybersecurity breaches that exposed customers’ credit card information to hackers, the companies’ apologies would have been ineffective without promises to institute procedures to prevent a reccurrence. (For a look at instances when it makes sense for companies to stand firm in the face of perceived harm, see the sidebar “‘Sorry, Not Sorry’: The Power of Being Unapologetic.”)

Sometimes managers become so focused on their new course of action that they forget to apologize. That’s a mistake; without a show of remorse, people are likely to think you’re whitewashing the violation.

The Apology Formula: The Right Way to Apologize

Once a company has decided that it should apologize, it has to do it right. It’s astonishing how many well-intentioned, sophisticated organizations completely botch apologies. While a good apology can restore balance or even improve relationships, a bad apology can make things much worse. As a framework for getting it right, companies need to think carefully about who, what, where, when, and how.

Who.

The more serious and the more core the violation, the more necessary it becomes that a senior leader—up to and including the CEO—make the apology. In cases where there is a clear transgressor—an employee who made the mistake—there may be merit in involving that person. But if he or she isn’t sufficiently senior, you risk offending the wronged party or the public by conveying that you are not taking the violation seriously. Just as it’s better to be overdressed than underdressed, when in doubt, you should err on the side of having a senior executive offer the apology.

For example, Target released a statement from then-CEO Gregg Steinhafel the day after its security breach came to light. When a plane full of JetBlue passengers was stranded on a runway for eight hours, it was then-COO Rob Maruster who issued the apology on YouTube.

Deciding who should receive the apology is often straightforward—although companies can slip up here too. Consider the video that Chip Wilson, the founder of Lululemon, released during the furor over an interview in which he had said that his brand’s yoga pants weren’t suitable for some bodies. His “I’m sorry to have put you all through this” was addressed to employees, not customers, and was roundly criticized. Effective apologies are delivered directly to the person or people harmed. When that group is large and diffuse, the organization might want to offer an “open” apology through the press or social media.

What.

This is the substance of the apology—the words you say and the actions you take. It’s important to keep three goals in mind: candor, remorse, and a commitment to change.

The best apologies show candor. They leave no room for equivocation or misinterpretation, and they make absolutely clear that the organization acknowledges both the harm that was caused and its own responsibility. Consider the candid apology Razer’s CEO gave after severe delays for preorders of the company’s Blade laptop in 2014. “We’ve been doing a terrible job anticipating and meeting demand for our products…We suck at this. I suck at this. I apologize to all of you who have had to wait for ages each time we launch a new product.”

Organizations should never sound defensive or as if they’re trying to justify a violation. However, explanations and information can help. For instance, an airline’s apology for a mechanical delay is more effective if the airline explains exactly what part is broken, what’s being done to fix it, how much time it will take, and why the issue will pose no safety risk once fixed. Military condolence letters—a form of institutional apology—routinely offer details regarding the circumstances of the mission on which the soldier was killed. After receiving some information, those affected have a greater appreciation for the broader context and the institution’s perspective.

Effective apologies also express remorse. We’ve criticized Facebook’s handling of the emotion manipulation study, but in 2006, when users were upset by the company’s just-launched News Feed feature, CEO Mark Zuckerberg offered a pitch-perfect apology. “We really messed this one up,” his written statement began. He went on to use phrases like “bad job,” “errors,” “we missed this point,” “big mistake,” and “I’m sorry.” He even thanked groups that had formed to protest. “Even though I wish I hadn’t made so many of you angry, I am glad we got to hear you.” His choice of words was remorseful and self-abasing—and effective.

The third key ingredient is demonstrating a commitment to change. An apology should create distance from the “old self” that committed the violation and establish a “new self” that will not engage in similar behavior. Sometimes the employee responsible for an error is fired. Sometimes, as in the Target and Home Depot security breaches, new procedures are put in place. Organizations might also demonstrate a seriousness of purpose by appointing an independent authority to investigate the incident and recommend changes—and pledging to implement the recommendations.

Consider how the Vancouver Taxi Association responded in 2014 after a cab driver left a mother and her sick child on the side of the road after he realized that they intended to pay for their ride from a local hospital to the airport with a hospital-issued taxi voucher, which he didn’t believe his cab company would accept. (In fact it would.) Not only did the taxi association express remorse for the incident, it demonstrated a commitment to change by suspending the driver and instituting a clear policy instructing all cabs to accept all vouchers from local hospitals at all times.

Now let’s consider an apology that lacked the three “what” elements: candor, remorse, and a commitment to change. In 2009, Goldman Sachs CEO Lloyd Blankfein issued a vague apology for unspecified acts by the financial industry that led to the Great Recession. His language was roundly criticized. As the New York Times editorialized, “His remarks do not come close to an apology…since he never actually said what he was sorry for…or to whom he was apologizing.” Nor did he explain how the bank would change its behavior.

Blankfein learned his lesson, however. After this very public rebuke, he held another press conference, in which he admitted that Goldman had participated “in things that were clearly wrong and we have reasons to regret and apologize for.” The firm pledged $500 million to help small businesses recover from the recession. This apology was far more candid, expressed remorse, and demonstrated a commitment to change.

Where.

If a company wants to control the coverage of an apology, the setting can determine how loud—and widely heard—the message will be. Organizations often default to written statements that reach a broad audience, especially when they’re published in newspapers. Target did this following its security breach, as did News International after some of its newspapers were found to have illegally hacked phones. For a more personal touch, the CEO or another executive might videotape an on-camera statement, as JetBlue’s Maruster did. A live statement, with or without an audience, increases the perceived importance of the apology. In some instances, it may even make sense for leaders to travel to the place where the violation happened—a crash site, the location of an industrial accident, and so on. This not only provides a camera-ready backdrop, but also it shows that the executive cares enough to view the damage firsthand and apologize to victims in person. For example, when a Southwest Airlines flight overshot the runway at Chicago’s Midway Airport in 2005, killing a six-year-old boy and injuring others, CEO Gary Kelly immediately flew to Chicago, visited the hospital, held a press conference, and offered several apologies, winning high marks for sensitivity.

Managers should realize, however, that there are risks to this approach. A live, on-site apology puts a leader in an uncontrolled environment. Apologizing to victims face-to-face can be effective if they accept the apology—but if they don’t, the event could turn into a public confrontation. Sometimes public apologies come off as publicity stunts. Social media has changed the calculus for choosing where to make an apology, since now a company’s written statement can be shared and retweeted, reaching many more people than would typically see an address on the evening news.

When.

A good apology arrives quickly. Speed signals sincerity and dispels the idea that executives feel uncertainty or ambiguity about their responsibility. Sometimes, companies delay apologies for good reasons, such as Coke’s desire, in 1999, to investigate customers’ health concerns and their root cause. Facebook’s intention to present a fully-formed plan to show its commitment to change appears to have been one factor in its slow apology for the emotion-manipulation study. The desire to be cautious is reasonable, but we believe that it’s better to offer a quick “placeholder” apology than to be silent. “While we’re still gathering the facts to understand exactly what took place, we want our customers and employees to know that we apologize for any harm we have caused. Know that we are developing plans to ensure that this doesn’t happen again. We will follow up by the end of the week with details.”

While speedy apologies are preferable, the window of opportunity for apologizing never completely closes, and for many victims a belated apology is better than none at all. Consider the well-received statement made by GM’s Mary Barra after the company’s 2014 recall of faulty ignition switches—a problem the company had known about, but not acted on, for 10 years: “Today’s GM will do the right thing…I am deeply sorry.” Barra also told employees that the violation was “unacceptable”; 15 leaders deemed responsible for the cover-up were let go. If a previous CEO decided not to offer an apology for a violation but the new CEO believes one is warranted, the organization should make one regardless of the time lag.

How.

The way an apology is delivered can matter just as much as the content of the apology. Informal language and personal communication can help. Recall Zuckerberg’s use of the phrase “We really messed this one up.”

Or consider what happened when DiGiorno pizza used the hashtag #WhyIStayed to promote its pizzas, not realizing that the tag was already being used by women to share their experiences of abuse. The company not only deleted its initial tweet but also followed it with another: “A million apologies. Did not read what the hashtag was about before posting.” It sent direct tweets to every person who had expressed outrage: “@ejbrooks It was. And I couldn’t be more sorry for it, Emma. Please accept my deepest apologies.”

Written statements have the benefit of being broadcast quickly, but it is often easier to strike the right tone through speech. A leader can rely on nonverbal cues to convey emotion, humility, and empathy. For example, remorse can be shown through facial expressions, and a commitment to change reinforced through vigorous gestures.

But in-person apologies are tricky to master. It can be difficult for business leaders accustomed to displaying power and self-confidence to strike the right repentant tone. For some, it may require careful planning and rehearsal. One glaring example of a leader who got the “how” of his apology wrong is Tony Hayward, then-CEO of BP. During the catastrophic Deepwater Horizon oil spill, in the Gulf of Mexico, he delivered the following apology: “We’re sorry for the massive disruption it’s caused to [people’s] lives. There’s no one who wants this thing over more than I do. I’d like my life back.” It was a strikingly tone-deaf remark, one that illustrates the danger of an off-the-cuff or improvised apology. (Hayward resigned a few weeks later.)
Preparing to Apologize

As a general rule, the more central to the mission of the company the violation is and the more people it affects, the more important it is that the apology be pitch-perfect. For core violations, the “what” has to show a tremendous commitment to change, the “who” has to be senior leaders, the “when” has to be fast, the “where” has to be high profile, and the “how” must be deeply sincere and demonstrate empathy.

There are some industries that apologize so frequently that they have the practice down to a science. Restaurants inevitably make mistakes—taking an order incorrectly, preparing the wrong dish, miscalculating the bill—and diners have come to expect a quick visit and an apology from the manager, along with a small offering (often a free dessert) as a consolation. When a Ritz-Carlton hotel failed to deliver a wake-up call at the appointed hour, causing a guest to run late for an important meeting, the front desk manager immediately apologized and offered to send up a complimentary breakfast. When the guest returned that evening, she found a handwritten apology from the general manager, fresh strawberries, dried fruit, and candy. Rather than lambaste the hotel, she raved to her friends about the five-star service she received.

It’s imperative to give forethought to the kinds of events that will create the need for an organizational apology and how it will be executed. We recommend role-playing and “apology rehearsals.” Making these investments is not strictly about damage control: A well-executed apology can improve relationships with customers, employees, and the public, leaving the company better positioned than it was before the error. That’s an outcome to which every leader should aspire.

Yours,
Something Small Thinking Big

Beyond Automation

Article from Harvard Business Review by Thomas H. Davenport and Julia Kirby

Some pointers that I've got are:

Augmentation -  It stands in stark contrast to the automation strategies that efficiency-minded enterprises have pursued in the past. Automation starts with a baseline of what people do in a given job and subtracts from that. It deploys computers to chip away at the tasks humans perform as soon as those tasks can be codified. Aiming for increased automation promises cost savings but limits us to thinking within the parameters of work that is being accomplished today.

Augmentation, in contrast, means starting with what humans do today and figuring out how that work could be deepened rather than diminished by a greater use of machines. Some thoughtful knowledge workers see this clearly. Camille Nicita, for example, is the CEO of Gongos, a company in metropolitan Detroit that helps clients gain consumer insights—a line of work that some would say is under threat as big data reveals all about buying behavior. Nicita concedes that sophisticated decision analytics based on large data sets will uncover new and important insights. But, she says, that will give her people the opportunity to go deeper and offer clients “context, humanization, and the ‘why’ behind big data.” Her shop will increasingly “go beyond analysis and translate that data in a way that informs business decisions through synthesis and the power of great narrative.” Fortunately, computers aren’t very good at that sort of thing.

Intelligent machines, Nicita thinks—and this is the core belief of an augmentation strategy—do not usher people out the door, much less relegate them to doing the bidding of robot overlords. In some cases these machines will allow us to take on tasks that are superior—more sophisticated, more fulfilling, better suited to our strengths—to anything we have given up. In other cases the tasks will simply be different from anything computers can do well. In almost all situations, however, they will be less codified and structured; otherwise computers would already have taken them over.

Five Steps to Consider

Step up

Your best strategy may be to head for still higher intellectual ground. There will always be jobs for people who are capable of more big-picture thinking and a higher level of abstraction than computers are. In essence this is the same advice that has always been offered and taken as automation has encroached on human work: Let the machine do the things that are beneath you, and take the opportunity to engage with higher-order concerns.

If stepping up is your chosen approach, you will probably need a long education. A master’s degree or a doctorate will serve you well as a job applicant. Once inside an organization, your objective must be to stay broadly informed and creative enough to be part of its ongoing innovation and strategy efforts. Ideally you’ll aspire to a senior management role and thus seize the opportunities you identify - “people who can go really deep in their particular area of expertise and also go really broad and have that kind of curiosity about the overall organization and how their particular piece of the pie fits into it.” That’s good guidance for any knowledge worker who wants to step up: Start thinking more synthetically—in the old sense of that term. Find ways to rely on machines to do your intellectual spadework, without losing knowledge of how they do it.

Step aside

Stepping up may be an option for only a small minority of the labor force. But a lot of brain work is equally valuable and also cannot be codified. Stepping aside means using mental strengths that aren’t about purely rational cognition but draw on what the psychologist Howard Gardner has called our “multiple intelligences.” You might focus on the “interpersonal” and “intrapersonal” intelligences—knowing how to work well with other people and understanding your own interests, goals, and strengths.

If stepping aside is your strategy, you need to focus on your uncodifiable strengths, first discovering them and then diligently working to heighten them. In the process you should identify other masters of the tacit trade you’re pursuing and find ways to work with them, whether as collaborator or apprentice. You may have to develop a greater respect for the intelligences you have beyond IQ, which decades of schooling might well have devalued. These, too, can be deliberately honed—they are no more or less God-given than your capacity for calculus.

Step in

Those capable of stepping in know how to monitor and modify the work of computers. Taxes may increasingly be done by computer, but smart accountants look out for the mistakes that automated programs—and the programs’ human users—often make.

Here you might ask, Just who is augmenting whom (or what) in this situation? It’s a good moment to emphasize that in an augmentation environment, support is mutual. The human ensures that the computer is doing a good job and makes it better. This is the point being made by all those people who encourage more STEM (science, technology, engineering, and math) education. They envision a work world largely made up of stepping-in positions. But if this is your strategy, you’ll also need to develop your powers of observation, translation, and human connection.

Step narrowly

This approach involves finding a specialty within your profession that wouldn’t be economical to automate. 

Those who step narrowly find such niches and burrow deep inside them. They are hedgehogs to the stepping-up foxes among us. Although most of them have the benefit of a formal education, the expertise that fuels their earning power is gained through on-the-job training—and the discipline of focus. If this is your strategy, start making a name for yourself as the person who goes a mile deep on a subject an inch wide. That won’t mean you can’t also have other interests, but professionally you’ll have a very distinct brand. How might machines augment you? You’ll build your own databases and routines for keeping current, and connect with systems that combine your very specialized output with that of others.

Step forward

Finally, stepping forward means constructing the next generation of computing and AI tools. 

Stepping forward means bringing about machines’ next level of encroachment, but it involves work that is itself highly augmented by software.  If this is your strategy, you’ll reach the top of your field if you can also think outside the box, perceive where today’s computers fall short, and envision tools that don’t yet exist. Someday, perhaps, even a lot of software development will be automated; but as Bill Gates recently observed, programming is “safe for now.”

Why Employers Love Augmentation (or Should)

For augmentation to work, employers must be convinced that the combination of humans and computers is better than either working alone. That realization will dawn as it becomes increasingly clear that enterprise success depends much more on constant innovation than on cost efficiency. Employers have tended to see machines and people as substitute goods: If one is more expensive, it makes sense to swap in the other. But that makes sense only under static conditions, when we can safely assume that tomorrow’s tasks will be the same as today’s.

Yours,

Something Small Thinking Big

Bridging Psychological Distance

Article from Harvard Business Review by Rebecca Hamilton

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When psychological distance is large, we tend to think in more-abstract terms, focusing on the big picture, the desirability of certain options, and why we want them. In contrast, when psychological distance is small, our thinking is more concrete: We focus on the details, the feasibility of options, and how we will use them. For example, we can think of an action such as completing a sale either concretely, as “filling out an invoice,” or more abstractly, as “contributing to company revenue.”

Adjusting the Distance

Many time-tested “managing yourself” techniques fall into this category. The theory of psychological distance helps us understand when and why they are effective.

Social

·       Negotiation and leadership experts have long advocated for perspective taking—that is, attempting to understand your counterpart’s thoughts, feelings, and motives. The result is reduced social distance. The ability to put oneself in another person’s shoes comes more naturally to some than to others, but research has shown that even a simple directive such as “Try to focus on the other party’s intentions and interests” can improve outcomes.

·       In contrast, when you want to increase social distance—perhaps with peers you’re now managing—try using more-abstract language: Challenge them to increase revenue instead of asking them to fill out more invoices.

Temporal

·       Self-imposed deadlines are an easy way to reduce temporal distance, thereby improving your focus, productivity, and even performance. Another strategy for managing temporal distance is to visualize the future. Focusing on the desired outcomes—a sense of accomplishment and enhanced professional standing—can help you identify themes and points that will lead to them.

Spatial

·       You have the most control over this type of distance—and your manipulation of it can yield surprising benefits. Face-to-face meetings and customer site visits are obvious ways to reduce spatial (and social) distance, leading you to more-concrete thinking. When you want to increase spatial distance in order to stimulate abstract thinking, try moving to a different venue. Subtle changes in office and retail spaces, such as higher ceilings, encourage people in those rooms to think more creatively and make more connections between concepts.

Experiential

·       Product managers interested in reducing experiential distance in market research should consider moving from hypothetical questions to techniques such as asking customers to choose and use prototypes. And actual experience is what usually determines the success of a new product or service.

·       But when you’ve already developed something radically new and want to encourage adoption, greater experiential distance can sometimes be beneficial. Bullet points highlighting the features of a new product may be more persuasive than a live demonstration.

Substituting One Type for Another

Because all psychological distance involves the same underlying thought processes, substituting one type for another can spur either more-abstract or more-concrete thinking. This trick works so well that academic researchers use it to establish that what they are manipulating really is psychological distance: If it is, then any type—social, temporal, spatial, or experiential—should produce the same effect.

Social

·       When searching for common ground during a negotiation, you can leverage temporal distance by asking yourself what you would propose if an agreement had to be reached within the next two hours. You’re not doing anything to change the social distance between you and your counterpart—you don’t feel closer to the other person—but the urgency of reduced temporal distance may change how you think about and approach the deal making.

·       If you’re in a situation where you need to command respect among your peers (that is, increase social distance), spatial distance can substitute. Move to a new office down the hall; give yourself a bit more space at the conference table rather than squeezing in right next to your colleagues. You might also try to use temporal distance: Envision the legacy you’d like to create at your organization to encourage yourself to think and communicate more abstractly.

Temporal

·       If you find yourself struggling with large temporal distance—procrastinating on a big project, for example, or making retirement plans—try playing with social distance. Schedule a meeting with the colleague to whom you’ll need to deliver the completed work.

Spatial

·       Perhaps the most obvious substitute for spatial distance is social distance. If you are physically separated from people you’d like to influence—customers or colleagues—you can reduce that distance not only by visiting them but also by emphasizing your common attributes and interests.

Experiential

·       One way to fight your (and others’) temptation to choose products with lots of features—or those that substitute form for function—rather than more user-friendly versions is to reduce temporal distance. If your team had to start using that fancy new collaborative software tool today instead of next month, when it’s scheduled for implementation, would it still seem like a good investment? If you had to execute your recommendations for beefing up your company’s social media content approval process today instead of next quarter, would each of the checkpoints still seem necessary?

·       You can also reduce experiential distance by substituting social distance. Similarly, best practices feel safe because people within your organization or industry have already adopted them. Social validation is a powerful way to persuade others to adopt new products and practices.

Managers face challenges related to social, temporal, spatial, and experiential distance every day. They can overcome those challenges by understanding the common thread that links them and learning to either adjust the distance or substitute one type for another.

Yours,

Something Small Thinking Big