Why It’s Good for Business When Customers Share Your Values

Learned a lot lending an editorial hand here:

MIT Sloan Management Review, February 15, 2024 

by Daniel Aronson 

Carolyn Geason-Beissel/MIT SMR | Getty Images

Values matter. Too often, however, they are relegated to the realm of fables instead of finance.

Take honesty, for example. We tell our children the story of the boy who cried wolf to teach them that when someone is dishonest, others are less likely to believe them the next time. But if we look just a tiny bit below the surface, the financial cost of the boy’s dishonesty immediately comes into focus: It results in the loss of his family’s entire flock of sheep.

If we calculated the loss caused by the boy crying wolf, we undoubtedly would find that it dramatically outweighed the combined gains generated by strategies like using AI-optimized grazing patterns, feeding the sheep a high-growth diet, or using consultant-recommended wool-marketing strategies. And yet, while all those things would clearly be considered business decisions, acting on values is not. But that’s wrong.

There is a very strong business case for acting on values. A $100 billion company I worked with discovered that there was a high return on investment from acting on its values and making sure customers knew about that. In fact, the return was many times greater than the ROI from its investments in upgraded technology or marketing campaigns. Yet the importance of technology and marketing are clearly understood as key areas of the business, while values-related impacts are left off of spreadsheets and are rarely — if ever — used to determine which actions have the highest ROI. Read the rest here.

Diversity Nudges

Learned a lot lending an editorial hand here:

MIT Sloan Management Review, November 21, 2023

by Paola Cecchi-Dimeglio

Roy Scott/Ikon Images

Despite their commitments to diversifying their workforces, many companies continue to struggle with attracting, hiring, and retaining employees from underrepresented groups.

Achieving workplace diversity is not easy, but leaders can target, address, and nudge specific data points and thoughtfully incentivize behaviors that support it. These interventions are often small, easy to implement, and inexpensive, but when they are applied to choices, processes, and organizational levers in the attraction, recruitment, onboarding of people and along the employee path cycle, they can help make a workplace more diverse and inclusive.

Nudges That Attract Diverse Talent

The conversion rates (CRs) at one e-commerce giant were below target within certain segments of shoppers, including lower-income people of color and middle-income LGBTQIA+ people. Meanwhile, the company’s primary competitor had successfully hired more women, Black and Latine people, Pacific Islanders, and LGBTQIA+ persons in marketing, behavioral analysis, and other roles, and their diverse perspectives were translating into higher CRs.

The company launched a major campaign to attract diverse talent. It engaged a search firm that cast a national net and ran print and digital ads that highlighted the company’s commitment to diversity and inclusion. Then leadership sat back and waited for those diverse candidates to appear. Views of the online job posting peaked around three and a half weeks after the advertising blitz but flatlined by the seventh week. Fewer than 11% of site visitors applied for a position. Only three applicants were interviewed; two received offers, one of which was declined. In other words, if you build it — with impressive resources and at great expense — they still might not come.

As this company discovered, it is not enough to simply gain the attention of the potential candidates you seek to attract. Converting appropriate talent to applicants and candidates requires additional outreach and cultivation. Individuals from underrepresented demographics — including people of color, those who identify as LGBTQIA+, and people with disabilities — often have fewer contacts at competitive employers and know fewer people who can help them navigate the application process. Organizations that want to increase diversity can attract more candidates from underrepresented groups by using nudges — modifications in the language and content presented in the talent acquisition process — in ways that help generate a diverse candidate pool, maintain the pool throughout the process, encourage top candidates to accept job offers, and help keep them onboard.

Nudges can help build trust and reduce information asymmetries early on. In one such intervention, a company displayed the numbers of women and underrepresented individuals among its leadership, as well as its diversity and inclusion goals and a timeline, beside an online job posting. A video at the bottom right of the screen featured the CEO speaking about his commitment to inclusion and diversity. This intervention increased the percentage of women and underrepresented groups that applied by 22% in the short term and 18% over the long term. Candidates from diverse socioeconomic backgrounds rose by 17% overall. And, importantly, the conversion rate from applying for a job to accepting a position rose by 8 percentage points. Read the rest here.

How to Productively Disagree on Tough Topics

Learned a lot lending an editorial hand here:

MIT Sloan Management Review, November 13, 2023

by Kenji Yoshino and David Glasgow

Neil Webb/theispot.com


Conversations about identity, diversity, and justice are some of the thorniest human interactions of our time. Consider Uber’s head of diversity, who hosted a workplace event titled “Don’t Call Me Karen” to highlight the “spectrum of the American White woman’s experience” and foster an “open and honest conversation about race.” Following backlash from employees of color, she was placed on a leave of absence.

Or consider Stanford Law School’s associate dean for diversity, who tried to “de-escalate” student protests during a speech by conservative judge Kyle Duncan. The dean tried to placate the students, who were angered by the judge’s anti-LGBTQ+ views, while giving the judge the space to finish his talk. But her intervention led to a public furor due to a perception that she had prioritized students’ feelings over the judge’s right to free speech. She, too, was placed on leave.

If these conversations stymie senior diversity, equity, and inclusion (DEI) professionals, what hope do ordinary leaders have? More than you might think.

We lead a research center at the New York University School of Law dedicated to issues of diversity, inclusion, and belonging. Together and separately, we’ve taught tens of thousands of individuals from all walks of life to have more meaningful and effective conversations across their differences. We focus our efforts on coaching people in positions of power because they have the greatest opportunity to transform the dynamics of these interactions — to foster empathy instead of provoking fear and division.

While the people we coach struggle with many types of identity conversations, disagreements are often the most agonizing. It’s relatively easy to participate in identity conversations when you and the other person are aligned. When you disagree, you’re likely to be flooded with angst and self-doubt. You might wonder: Am I as enlightened as I thought I was? Will people feel hurt or betrayed by me?

You might be tempted to respond to such angst by capitulating to whatever your conversation partner says. Yet that approach is often not desirable, because it compromises your dignity and authenticity. We believe it’s still possible to disagree on identity issues, even in today’s polarized and overheated political climate. The key is to do it respectfully. Here’s how. (Read the rest here.)

Open Up Your Strategy

Learned a lot lending an editorial hand here:

MIT Sloan Management Review, December 20, 2021

by Christian Stadler, Julia Hautz, Kurt Matzler, and Stephan Friedrich von den Eichen


Michael Austin/theispot.com

Formulating and executing sound organizational strategy is difficult work. Strategy is often made by elite teams and thus can be limited by their biases about competitors, customer needs, and market forces. And it can be an uphill battle convincing stakeholders across the company to channel money, time, and energy in a new and unproven direction.

Our solution to both the strategy formulation and execution challenges is radical: Open up your strategy process. Open strategy offers leadership teams access to diverse sources of external knowledge they wouldn’t otherwise have, while also making individual leaders aware of their biases and helping them build the buy-in needed to speed up execution.

This approach is particularly valuable when companies face disruptive threats and contemplate transformational change. It’s much easier to master disruptions when you’re forging strategy in concert with others who view the world through a different lens than you do. Progress and innovation depend less on lone thinkers with exceptional IQs than they do on diverse groups of people working together and capitalizing on their individuality, as social scientist Scott E. Page has shown.1 In short, diversity of perspective matters — a lot.

Involving people from outside the C-suite — and outside your company — in strategy-making not only provides a wellspring of fresh ideas but also mobilizes and galvanizes everyone involved. Thus, execution becomes an integral part of strategy. The best part: All this can happen without a loss of control over the strategy-making process. Read the rest here

Why Good Arguments Make Better Strategy

Learned a lot lending an editorial hand here:

MIT Sloan Management Review, June 3, 2021

by Jesper B. Sørensen and Glenn R. Carroll

Image courtesy of Phil Wrigglesworth/theispot.com

Strategy is hard — really hard — to do well. Many leaders will admit this privately: In an anonymous 2019 survey conducted by Strategy&, 37% of 6,000 executive respondents said that their company had a well-defined strategy, and 35% believed that their company’s strategy would lead to success.

Great leaders create ways of engaging their teams that can cut through this strategic fog. They may adopt frameworks to guide their analysis, but they expect participants in strategy discussions to contribute coherent reasoning and defensible ideas. Amazon is well known for its requirement that major initiatives be proposed in the form of a six-page memo. The virtue of the memo — versus a slide deck — is that writing in full sentences and paragraphs forces leaders to clarify how their ideas connect to each other. Similarly, Netflix has driven stunning transformations in the media landscape in part through its success at encouraging its leaders to debate ideas frankly and its willingness to empower them to take risks without waiting for an annual strategy planning process. It is no surprise that CEO Reed Hastings views working from home as “a pure negative” for the company, in part because “debating ideas is harder now.”

The emphasis on vigorous debate at Netflix and Amazon clarifies a truth that many approaches to strategy obscure: At their core, all great strategies are arguments. Sure, companies can and do get lucky; sellers of hand sanitizer, for instance, have done very well during the pandemic. But sustainable success happens only for a set of logically interconnected reasons — that is, because there is a coherent logic underlying how a company’s resources and activities consistently enable it to create and capture value. The role of leaders is to formulate, discover, and revise the logic of success, making what we call strategy arguments.

Many leaders would agree with this claim but struggle with how to translate the insight into practice. What does it mean to construct a strategy argument? How does one evaluate such an argument? Read the rest here.

The Overlooked Partners That Can Build Your Talent Pipeline

Learned a lot lending an editorial hand here:

MIT Sloan Management Review, March 29, 2021

by Nichola J. Lowe

Image courtesy of Stephanie Dalton Cowan/theispot.com

America has a skill problem. It’s not the result of inadequate educational systems letting down younger workers or a lack of aptitude among older workers, as some claim. The problem is the widespread failure of American companies to share responsibility for skill development. Many employers are simply unwilling — or unable — to invest sufficient resources, time, and energy into work-based learning and the creation of skill-rewarding career pathways that extend economic opportunity to workers on the lowest rungs of the labor market ladder.

This national skills crisis becomes clearest whenever unemployment rates are low. As late as February 2020, most industries in the U.S. showed persistent signs of skills shortages. In manufacturing, for instance, there were 522,000 unfilled job openings in late 2019. There were similar long-standing job vacancies in many other critical industries, including financial and business services, health care, and telecommunications, with executives noting increased skills gaps in data analytics, information technology, and web design, among other areas.

The skills shortage was less obvious during the COVID-19 pandemic, as companies shed millions of jobs, but it persists despite that temporary softening of the labor market. And as hiring picks up along with the economy, employers may increasingly develop workforce strategies that are based not only on skills requirements but on increased commitments to boosting diversity and inclusion.

A better and more enduring skills strategy must begin with the recognition that our national skills crisis rests on a deeply rooted but flawed assumption: namely, that skills are individually held. This view overlooks the collective and context-specific nature of skills — that is, the ways in which they are shared, reinforced, and reproduced through group interactions at work. It also creates a false justification for the bias and hoarding that often accompany employers’ approaches to talent management. That results in more educated workers benefiting from corporate investments in retention, leaving those workers with less formal education underserved and undervalued — a phenomenon that labor scholars call the “great training paradox.” Moreover, it leads to the mistaken categorization of entry-level workers as “unskilled.” This positions them as irrelevant and easy to replace, ignoring the fact that this segment of the workforce — so often women and people of color —not only executes strategy but also has the grounded insights needed to improve organizational processes and practices.

The core assumption that skill is individually held results in supply-side approaches that place the primary burden for skill development on educational institutions and on students within them. These approaches have not and cannot, in isolation, do the trick. Skill shortages are a problem of employment, not education...read the rest here