Archive for October, 2009

Dean’s Disease

I have to start this blog with my two most favorite words and phrases from the article Dean’s Disease.  The first: injelitance—a form of organizational paralysis compounded equally of incompetence and jealousy. Injelitance is certainly not just seen in the world of academia. I see it ever day in the business world as well.   The second: A dean is to his faculty as a hydrant is to its dogs. I guess this disgruntled former dean felt like nothing more than a walking urinal.

In my time in middle management, I have felt more like a full toilet. I guess this dean was lucky enough to just experience the first alternative rather than the second if you know what I mean. While reading through this article, I really resonated with the idea of metamorphic effects of power. I have seen it many times in the business world, I guess I just never realized that it was so pervasive in the world of academia.

I can certainly see that after a small amount of time, the dean’s ability to communicate with others lessens due to a sense of superiority. And, this superiority goes unchecked because in many cases there are very little checks and balances in the public collegiate system as it relates to deans. This encourages “yes men/women” behavior. Again, this type of behavior is seen time and time again in the business world. Deans, like CEOs, become insulated from the realities of day to day operations. The “yes men/women” created in these situations create a gang of doppelgangers and encourages high levels of group think. I agree with the author with respect to why dean’s disease happens and what promulgates the behaviors behind the disease.

Deans in this situation: 1) Breed Doppelgangers—they can influence faculty because of their control over resources—in this sense they exercise both coercive and reward power. Interestingly, to me this type of stuff is exactly what happens when you elevate a lineman/woman up to a supervisory role without proper training. I would not have expected this from someone who should be at such a high level of their career. 2) Fall Victim to Strategic Praise—this causes deans to believe the “lie” that they are indeed special. One can tell if they are falling victim to strategic praise if there are no dissenting opinions around them ever. 3) Have an insatiable Taste for Power, a Taste They Might Not Have Known they have—a need to preserve power becomes tantamount. In this situation, double standards run rampant. You had better be on the right standard…

I also agree with the author’s suggestion with respect to what we can we do about it: 1) Enact Proactive Prevention—like the old saying goes: an ounce of prevention is worth a pound of cure. We need to weed out those with the dean’s disease early in the interviewing process by checking out their past record and academic credibility. Also avoid those who display the “us versus them” attitudes. 2) Develop Safeguards—developing values and encouraging independent thought. 3) Employ counteractions—senior management needs to deal with symptoms of dean’s disease head on.

I am thankful that the dean of the UNR business school does not appear to have contracted the dreaded dean’s disease.

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Diamonds in the Data Mine and Gary Loveman and Harrah’s Articles

While the Harrah’s story might not be so rosy now as it was in 2003 (they are down $1 billion at last check), the HBS story written by Gary Loveman of Harrah’s and the other article entitled “Harrah’s Entertainment & Gary Loveman” certainly show a company that was focused on the right things.  Interestingly, the right things they were focused on in 2003, probably are keeping Harrah’s going in the current recession (in spite of their current losses).

While I believe that the facts presented in these HBS Best Practice Case studies are true, I believe that there probably is much more to the Harrah’s story than meets the eye.  My thoughts were confirmed when I read the HBS article entitled “Gary Loveman and Harrah’s Entertainment.  By reading that article, it became clear to me that while all of the data mining and customer service efforts culminated into a winning strategy, the transformation of Harrah’s by Gary Loveman did come a quite a personnel and culture shock cost.

And, the cynical side of me couldn’t leave the “more of the story than meets the eye” subject without mentioning that it is interesting that there were at least 2 HBS articles (though I believe more) written on the subject of Gary Loveman’s impact at Harrah’s and that Gary was an assistant professor at Harvard.  Connection?  I think yes…it looks on the surface to be a local boy done good reason for all the attention.   That said, I think that Harrah’s does deserve the kudos it gets from the articles.

Another interesting tidbit when comparing the two articles is that there seemed to be quite a bit of “cronyism” going on.  Some of the most senior people that Gary Loveman brought on were also from Harvard.   

Now that I have gotten out all the negative things I took away from the articles, here are the positive things…which really do outweigh the negative.  While the article is entitled Diamonds in the Data Mine, the article really should be entitled “Having the Courage and Vision to Know You Know and What You Don’t Know and Doing Something About It.”   I really like the managerial courage that Phil Satre showed in hiring Loveman and also the managerial courage that Loveman showed when he got to Harrah’s as the COO and the continued courage after he became CEO.

So, what do I think they did right?  A lot of things, but here are my top nine; they:

  • Built a humungous data base of customer preferences, usage, demographics and psychographics, which allowed them to really understand and segment their customers.
  • Hired a COO that was a well educated Marketer.
  • Followed the data—they let the data show them how to target their marketing efforts.  They didn’t force fit their database management to their Marketing programs.
  • Focused on lifetime value rather than individual spends—CLV was really just a new concept in the late 90’s and I am glad to see that they got on board early.
  • Focused on a multi-store strategy—they borrowed the retailer’s strategy in which they focused on getting the player to one of their casinos…it didn’t matter which one.
  • Prioritized customer service—they shied away from the very expensive gimmicky strategies that many of the Vegas casino’s employed during the 90’s to attract more family friendly gambling and just focused on providing excellent customer service to their most important and profitable customers…the average spender (rather than the high roller).
  • Tested/piloted marketing programs rather than just spraying and praying.
  • Employed a Good/Better/Best strategy—they identified through their test marketing and marketing research efforts that people want to get to the next level of service; they want something that shows others that they are better than them.  They did this through the three-tiered system employed through the Total Rewards program.
  • Rewarded employees based on improved customer satisfaction rather than financial results—there is just one down side to this approach and that is something called the laws of diminishing returns.  At some point, the amount of effort to improve the scores will be so great that it is not possible to increase the satisfaction scores.  So, in that case, you could have a location that has near perfect customer satisfaction but can’t improve their scores without doing something illegal, immoral or unethical.  In that situation, you have disenfranchised the employees because they have been too good for their own good.  They have to decrease their scores in one year so that they can achieve a payout in the next.

 All-in-all, it seems that Harrah’s would be a place I would like to work.  They hold all the key things that I currently employ at my job dear:  test and learn marketing, customer segmentation and focusing on customer satisfaction.

Evidenced Based Management—Trying Not to be Part of the Problem

The article “Evidence-Based Management” is a breath of fresh air to me.  In my years of management, nothing irritated me more that having to hire big name consultants because someone up the food chain wanted a study that had a consultant’s stamp of approval on it.  One consulting company in particular, who will remain nameless, really made a mess of what could have been a simple study of demand-side management (please excuse my Power Company vernacular).  The worst part of the whole thing was that I didn’t get a say in whom our company selected for the project but I sure as heck got the pleasure of cleaning up the “expert’s” reporting mess.

 Since I am now far enough up the food chain, I generally don’t fall victim to the “brand name” consultancy inclusion in the studies for which I am in charge.  I usually stick with the tried and true research companies that come with a lot of know-how, but not a large price tag.  And, that suits me just fine.

 I think that many managers fall victim to two of the key idea’s presented in this article:  trying to force/bring learnings from a former company to the new one and self fulfilling prophesies.  With respect to bringing learnings to the new company; I think that many senior managers (me included) feel that our new company is buying the best practices of our former company when they hire us.  That is especially true if we are coming from a competitor.   So, we have to figure out what we think worked best at our former company so that we can “show” our new company the value of their human resource purchase (of us).  That said, that is not the true problem.  The problem is that at the point we get the forced system into place, our analysis of the system we are bringing ends.  We just work to implement our system, without understanding if the existing system will support our new system.  

 Self fulfilling prophesizes are a difficult hurdle to get over.  Not only do you have to deal with your own self fulfilling prophesizes, but those of your manager and his manager as well.  My favorite line in the article is certainly timeless (and true): “To a hammer, everything looks like a nail.”

 So what do I do to reduce being part of the problem?  The most important thing is that most of the things I do are test and learn in nature.  I do pilot programs for all the marketing programs I am about to initiate.  We continue using our control group mailings and then select a small area to test a more direct and personalized mailing.  If the test group produces a higher rate of return, we work to make the test mailing into the next control mailing.  By doing this, we reduce the chance we have a complete flop of a mailing.

Good to Great, or Just Good?

Being a market researcher, I found the article “Good to Great, or Just Good?” to be a fabulous read.  It reminded me that we always have to be careful about what we read.  Particularly when it relates to “facts” found in supposedly sound research studies—specifically those that are published in widely popular business books.  

 Based on the new findings, I think that Niendorf and Beck are right.  The Collins study was flawed.  Though I would argue that it wasn’t the data mining specifically that caused the flaw, that it was more a problem of not using a generally accepted scientific method; compounded by what appears to be a weak causal link between the independent and dependent variables.  Because Collins used regression, some variables (that could have been the true causal factors) may have been through out of the model due to multicollinearity.  And the world will never know.

 Data mining is an interesting exercise.  It can truly provide insights into your own data that you never thought possible. In my opinion, the problem with data mining is that, while it is a science, there is a lot of bias in the set up of the data mining programming that could make the actual data mining flawed.  The worst part is that you may never know the impact the bias had.  And, it’s more than just garbage in garbage out.  It is more like slightly moldy in to stinky and putrid out (but in a rose colored package).  

 Another thing that I liked about the study conducted by Niendorf and Beck is that they identify the potential weakness of their own study.  That said, I would have to agree that the chances that the companies jettisoned their GTG ways after the Collins study was concluded is probably pretty low.  Particularly since a popular book stating how wonderful their management practices were had just been published!

Iraq War…Who is to blame?

In-depth Iraq

Someone once told me, “be wary of joining groups as they can cause us to do things we would normally have the common sense to avoid.”  The invasion of Iraq tops the common sense to avoid list.  Group think is an evil monster that usually creeps up slowly and eats you piece by piece.  Maybe it’s just because the group members aren’t that engaged with the group, perhaps some are just too busy to care, but in the end the result of group think can be devastating to a project or, in the case of Iraq, the “brand” of a nation.

 So what was the ultimate downfall of the pre-Iraq war Intelligence report?  Something we tell our kids to do every night…DO YOUR HOMEWORK!  It was so very easy for Congress and the president to blindly accept the US intelligence report on face value.  Didn’t anyone think that there could possibly be a political or personal motive behind the intelligence collected on whether we should invade Iraq?  

 So now, who is to blame for all of this?  That’s an interesting question.  Because the answer is: it really doesn’t matter.  The whole world blames America for this group think fiasco.  So who is to blame?  Ultimately, the blame falls on all of us.  And, how will this blame bare itself out?  Continued attacks on the “American aggressor” and continued hatred by Muslims and non-Muslims alike.

Sins of Commission…

Trying to figure out the best mix of extrinsic motivators (i.e. money) is a tough one.   Much like any deal you may enter into, you want to feel like you are getting a good deal.  And, when the deal involves compensation, that “good deal” applies whether you are the employer or the employee. 

I think that offering a bonus or commission system to employees can be beneficial to employees and the company if done correctly.  As the article “Sins of Commission: Be Care What You Pay For, You May Get It” states, you need to determine the right balance when it comes to extrinsic motivators like bonuses and commission.  

Two of the biggest problems that arise from bonus and commission systems are:

  • The system rewards the wrong type of behavior—such as rewarding only top line review rather than focusing on customer loyalty/persistency and top line growth
  • The system is too complicated for individuals to completely understand what is expected of them

Commission/bonus systems can be beneficial to both employers and employees.  I believe that the best course of action is to develop a system that is 1) simple and 2) rewards the behaviors that align with company values and mission.

The Trials and Tribulations of Team Participation

In my professional life, I have been on many teams; some successful and some not so successful.  After reading the “Strategies of Effective New Product Team Leaders”, I now realize that the success or lack thereof probably had more to do with the team leadership than the skills of the individual members. 

For me, the most critical aspect is getting a good mix of people, from many different disciplines, and figuring out how to get them to communicate freely.  Too many times I have seen groups that were set up to succeed…the right people, with access to all the resources they needed..and yet they still failed.  At the time, I figured that it was just a bad project or a bad team.  But I realize now that it probably was something as simple as people not trusting their teammates enough to have open and honest conversations.  Free info sharing wasn’t an option for these people.   I know that I have been guilty of it.  In many group situations, knowledge truly is power.  And, who wants to give up the power?

So what have I personally taken away from this article?  Here’s my top Four:

  1. Keep senior management out of it—if they micromanage the group you are lost before you start
  2. Leaders should facilitate, not manage the meeting
  3. Team building is a must, don’t assume that the group will be harmonious…you have to make it so
  4. Check politics at the door—it has to be stated up front that politicking in the group will not be tolerated

So that’s what I learned.  I have to end this blog with my favorite line from the article…

“The corporate seagulls are the people that fly in, make a lot of noise, eat your food, go to the bathroom all over you and then fly away.

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