The fox has a new den

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La Leçon Ladurée

I just returned from a trip to Paris. The weather was gorgeous, the hotel was fantastic, and I ate extremely well. There, I did all the requisite fox-like things like pop into Kitsuné and walk down Rue du Renard. However, I ought to have paid more attention to the french proverb that states: “A wise fox will never rob his neighbour’s hen roost” and intuited that this is because the foxes are too busy staking out patisseries and robbing the patrons.

In Paris, it is hard to walk three blocks without running across the pale green awning of a Ladurée. This patisserie is known for its decadent sweets, particularly the double-decker macaron (reportedly they sell 15,000 of them every day.) While Ladurée has a charming history reaching back to 1862, its current owner, Le Groupe Holder, seems to view the franchise as a serious business venture. They have embarked on an aggressive international expansion plan, which is why it seems that Ladurée locations are more plentiful than Benetton stores circa 1986.

They have done a beautiful job with the brand. The pricy sweets can be seen in films and on TV. While in Paris, I saw a number of stores selling Ladurée stationery. Their branding is consistent: they provide little indulgences for their (mostly female) customer base, leveraging their history to manufacture a sense of old world charm (most of the restaurants have been built post-1997 but you’d swear you were dining in 19th century France.) So while I had heard people wax poetic about the Pierre Hermé macarons, I felt a visit to Paris would not be complete without ducking under the celedon Ladurée awning.

So, imagine my shock when, after having a lovely meal of stuffed prawns and a truly divine Saint-Honoré cake on the second floor in the back dining room of the Ladurée on the Champs-Élysées, I was robbed. Yes, in the ten minutes that my handbag was in plain view and open while I was waiting for the somewhat disengaged waiter to return with the credit card processing machine, a thief managed to make her way through two sets of glass doors, past the hostess and the bartender, up the curving marble staircase, past the main dining room, push past a girl from a neighbouring table who was returning from the washroom, and thrust her thieving paw into my handbag, taking my euros and my ID. Zut alors!

What the “unfortunate incident” (don’t you love that expression) revealed, in addition to obvious things like I should never carry cash and I should travel with private security at all times, was how quickly a company’s brand can be undermined if its employees are not adequately trained.

I expected the waiter and the manager to offer some assistance and comfort after such an unsettling event. After all, the entire Ladurée experience is about creating an ambiance of delight. Instead the staff acted as though nothing had happened, refusing my repeated requests to call the police. They told me the police would not be bothered with such a matter and that they never came, giving me the impression that perhaps this type of thing had happened before. The primary concern of the manager seemed to be processing the bill for my meal.

Even the most carefully constructed efforts can be stymied when the brand’s ambassadors — in this case, Ladurée front-line employees — do not reflect the brand. There were so many things the restaurant could have done. They might have asked me to come into the back where they could more discreetly call the police, they might have escorted me to the police station, they might have asked the other patrons what they saw. They might have stuffed me full of macarons! The robbery was not their fault, but given that it happened on their premises, they might have offered a bit of help or empathy. My fellow diners who had witnessed the event showed far more concern. When I finally found a police station to report the incident, they were surprised the restaurant had not called the police. Moi aussi!

I don’t know how much money Ladurée has spent trying to cultivate the image of charm and luxury: of being a little haven where people can enjoy a treat and give themselves a bit of a reprieve from the workaday world. Up until the robbery, they were doing an adequate job, but their clear lack of policies or procedures to help their employees know how to prevent a theft (security at the door, waiters being attuned to people lurking around) or mitigate the impact (calling the police, displaying concern) left an impression that, for me, no amount of advertising or PR can overcome.

When times are tight (a number of shops I’d sought out had gone out of business and the city seemed quiet for peak tourist season) companies often trim back on what they see as unnecessary expenses, and staff training often falls by the wayside. A slow period, however, is the perfect time to invest in one’s employees. People are less busy and therefore have the time to learn new skills. Well trained people are more adept at winning business in a lean economic environment. And when the economy recovers, a productive and efficient staff are more likely to take advantage of new opportunities. Well trained people — especially in the restaurant business where the client-facing waiters define the customer experience — are key to maintaining one’s brand.

I have no idea how Ladurée runs its business. I’m sure that my experience was an anomaly, both in terms of the event and the staff’s reaction. What this whole event showed is how quickly one’s best strategic efforts can be undermined if operational issues like risk assessment and performance management are ignored. Lots of people who get into the restaurant business are drawn to the sizzle — the branding, the decor, the menus, the plans to expand — but they must make sure to remember that they are actually in the business of steak.

Triathlon Culture

A few weeks ago, I was at the Guelph Lake Triathlon Weekend to support some of the participants. The event was amazing: the weather was perfect, the location was beautiful, and there are worse ways to pass the time than watching a bunch of good-looking people in spandex. What really stood out, however, was the triathlon culture.

The participants in the swimming-cycling-running events were all amazingly supportive of one another. On the Saturday morning, there was a Try-a-Tri for people who were just starting out. There were at least as many supporters as there were participants, and people were cheering for everybody, be they in first place or last. I’m not sure if it was the endorphin rush or simply the good weather and camaraderie, but everyone seemed very happy to be there.

The triathletes themselves were the poster children for intrinsic motivation. Nobody was making these people train for weeks, wake up early on a Saturday, and run full-speed into a chilly lake. These people were there because they wanted to be there: not for pay and not for any particular future benefit, save for a feeling of satisfaction and bragging rights.

It all got me to thinking that perhaps we should try to integrate a little bit of triathlon culture into the workplace:

Encourage company ambassadors. Recently, I was at an event with a number of people training for Ironman Canada in attendance. As I’ve often wondered what it is that makes a fully-sane adult decide to swim 2.4 miles, bike 112 miles, and then run a marathon, I tried to find out what drew them to the challenge. Almost everyone I talked to started out as a spectator, cheering on friends or family, and simply caught the bug, thought “I can do that,” and signed up. And these converts made such good ambassadors for the sport that they almost had me signing up. In most organizations, there are enthusiastic people who can act as champions for projects and change efforts. Companies would do well to encourage these mentors and role models as they are naturally skilled at motivating others.

Expect change and prepare for it: Triathletes know that they will be swimming, cycling, and running. Since very few athletes seem inclined to swim in their bike helmets and running shoes, they must be prepared to change during the event. In order to assist with this change, there is a special transition area where athletes can store their bikes and switch gear for the next leg of the race. Triathletes practice transitioning before the race, so that they are not scrambling around on the day, stuck inside a wet suit or trying to remember where they put their running shoes. There are lots of volunteers to help. (At big events, like the Ironman series, they even have volunteer “strippers” to help athletes out of their wet suits: a selfless role that…) Preparing, practicing, and enlisting people to help can help smooth any kind of change, including changes in the workplace.

It’s important to let people run their own race. While there are some very gifted athletes out there, few triathletes are equally good at swimming, running, and cycling. While one might be at the back of the pack in the swim, one can make up time on the bike; the people one passes on the bike may be better runners. Eventually, triathletes stop looking at what the guy beside them is doing and start to run their own race. Often companies treat their employees as though they are all sprint competitors running the same heat, comparing everyone’s monthly sales figures, or number of successful hires, or lines of code written. It’s hard to look ahead when you are always looking to either side. Companies can encourage people to run their own race by being creative with bonuses, job titles, and career paths: many roads lead to Rome.

Slow and strategic wins the race. In many organizations, people are judged on speed of execution: how quickly leads are converted to sales, how soon a deal can be brought to market, how quickly funding is increased. If you work in a publicly held company you have, at most, three months to move the needle. There is a tendency to be fast out of the gate, racing to the finish line as quickly as possible: a greyhound chasing the rabbit. It can work well for a while, but eventually people get burned out: there aren’t many 70 year-old competitive sprinters. Triathletes are much more strategic in nature. Pacing is key: there is little use in swimming so fast that you are too tired to cycle, and you need to conserve some energy for the run. Triathletes don’t just rush out of the gate. They plan and they set a reasonable pace. Companies would do well to think like a triathlete: More fox, less hound.

Fox-Like Thinking: Jennifer Chan of Exhibit Change

Recently, I had the opportunity to sit down with Jennifer Chan of Exhibit Change at the ING Network Orange space. An architect and exhibit designer by training, Chan was tired of seeing so many ”top-down” cultural initiatives and believed that the principles of design thinking could be applied to create better communities.

To illustrate how effective some of the principles of design thinking could be, Chan pointed to Tom Wujec’s Marshmallow Challenge. In his popular TED Talk, Wujec described how he had challenged several groups of people — business students, CEOs, lawyers, engineers, architects, and recent kindergarten graduates —  to assemble towers using uncooked spaghetti strands and marshmallows. Kindergardeners tended to build some of the best structures of the bunch. The key to the children’s success was their natural tendency to prototype. While business types tended to spend their time choosing a leader and then discussing and planning things, the children simply started to build and then refined their models through the process of trial and error. Given the success of design-driven companies such as Apple, the underlying principles of design thinking such as collaboration, prototyping, and iteration are worth exploring.

Traditional businesses have sometimes dismissed design thinking as indulgent (prototyping can be expensive, after all.) However, as Chan pointed out in our conversation, creativity often comes from constraints. In architecture, she found that a constraint, such as the need for a structural wall, served as an interesting challenge: if you had to take the wall into account, you tended to be much more creative than if you had absolute freedom. Using the concepts of design thinking within an environment with many constraints (budgets, deadlines, customer requirements) can produce very creative work. In March, Exhibit Change was the Toronto host of Global Service Jam, a 48-hour collaborative design challenge to create new models of service and customer experience. Diverse teams who had never before worked together created 203 functional new service models in two days.

Chan and her colleagues at Exhibit Change have facilitated a number of community initiatives, often using the “design charrette” as a technique to engage key stakeholders. Exhibit Change facilitated charrettes — structured sessions where diverse groups collectively generate design solutions — involving citizens, government officials, and business owners to arrive at a plan for Parkdale’s communal gardens, design a green initiative in Ward 27, and determine how John Street in Toronto’s entertainment district should function. While the charrette is a technique frequently used in urban planning, the idea of a focused, collaborative, creative session involving key stakeholders has applications in the broader business world.

Chan will be running a workshop on Design Thinking for Community Collaboration on Friday, June 24 at OISE. The workshop focuses on using applied design thinking to increase engagement.

Business the Eleanor Roosevelt Way

In My Year with Eleanor, author Noelle Hancock  took to heart Eleanor Roosevelt’s advice to “Do one thing every day that scares you.” Every day for a year, Hancock did something she never imagined she’d have the courage to do. While her year was filled with trapezes, karaoke, sharks, and other things not necessarily relevant to the business world (OK, maybe the sharks…) the notion of regularly doing things to push us out of our comfort zone is quite applicable to corporate life. If the #WIF11 twitter hashtag is to be trusted, there are not a lot of speeches being given at the World Innovation Forum on the virtues of being timid. In business, the bold are rewarded. Audi, as an example, decided to ramp up production when most companies in their sector were scaling back. They also decided to take on BMW,with a goal of unseating them as the top luxury car manufacturer by 2015. So far their courage is paying off. As a rule, foxes can’t sit around waiting for their food to come to them. Carpe gallus domesticus!

Here are some ideas for bringing bravery to the job:

Practice makes perfect. Being courageous at work does not mean challenging the boss to a dual at the next board meeting; it might, however, mean asking her if we can pitch our new idea to the senior management team. Life coach Cheryl Richardson talks about the importance of building one’s “courage muscles” by taking risks on a regular basis. This could mean anything from asking for more challenging work, to giving a speech to an industry group, to entering a new market. We don’t want to be like Aesop’s fox who walked away bitterly after being unable to reach the grapes. Stretch, jump, ask to borrow a ladder: few people end their days wishing they’d been less brave.

Courage can be borrowed. There are two parables out there about a tiger and a fox. Aesop’s version focuses on a tiger who, having been shot by a hunter’s arrow in spite of thinking he is invincible, is basically heckled by a sanctimonious fox. The morale of the story is that no armour is impenetrable: kind of a bummer, really. We prefer the parable from the third century BC historical text, Zhan Guo Ce. In this story, a fox is caught by a hungry tiger. The fox, who has no desire to be eaten, is filled with bravado and basically starts trash-talking the tiger. He tells that tiger that he, the fox, is king of the beasts and dares the tiger to eat him and thereby incur the wrath of God. The tiger, confused that the fox is laying claim to his job title, demands proof of the fox’s status. The fox challenges the tiger to follow him through the forest and watch the animals scatter in fear. The two set off together and the other animals, seeing the tiger, run away. The fox takes all the credit and the tiger, believing the fox’s claims of ferociousness, spares his life. While the parable is designed to show how people can appropriate our power, it also shows how we can borrow the courage of others. We aren’t condoning false bravado or the idea of “fake it ’till we make it”, but surrounding ourselves with courageous people can help us to feel more bold. We can attend conferences with like-minded people, join a mastermind group, invite people we admire for lunch. Courage is contagious.

Assess the risk. Part of what makes bold actions scary is the inherent downside: every time the fox sneaks into the henhouse, he risks ending up on the wrong side of a farmer’s double-barrelled shotgun. Before doing something brave, we like to contemplate the potential problems. We do this not because we are closet masochists, but because some forethought can help us manage the risk. We look at 1) what might go wrong (potential problems) and 2) why it might go wrong (potential causes.) For each potential cause, we look at what preventative actions we can take to reduce the probability that the problem occurs. For each potential problem, we look at what contingent actions we might take to minimize the impact. Assessing risk can help us to be more courageous, as it’s easier to take a leap of faith when we are fairly certain it won’t lead to disaster. If we are about to go skydiving, we are much more likely to jump if we are confident that the parachute was not packed by some guy coming off a 6-day bender. Just saying…

Motivate the Fox: A Review of Daniel Pink’s Drive

I recently read Drive: The Surprising Truth About What Motivates Us,  after hearing author Daniel Pink speak in Toronto. In his book, Pink looks at how companies motivate their people and how people are best motivated. Pink helpfully boils his book’s content down to a tweetable precis: “Carrots and sticks are so last century. Drive says for 21st century work, we need to upgrade to autonomy, mastery & purpose.”

According to Pink, there are two types of motivation: Type X, which is fueled by extrinsic rewards such as a bonus or stock options, and Type I, which is fueled by intrinsic desires: “the inherent satisfaction of the activity itself.”  While Pink feels that today’s business environment requires the type of engagement that can only be achieved through intrinsic motivation, he makes it clear that the findings in the book are by no means new. In 1949, behavioural psychologist Henry Harlow observed monkeys doing puzzles, not because they received a reward, but because the completion of the puzzle seemed to be inherently satisfying. Just as Victor Vroom, Lyman Porter, and Edward Lawler observed in their Expectancy Theory models,  people are motivated to behave in a certain way based on expected outcomes: intrinsic outcomes being particularly powerful.  As Napoleon observed, “There are two levers for moving men — interest and fear.” Stock options, extended vacation time, and company cars are not as effective as providing the means for genuinely satisfying work.

Where Pink (a former speechwriter for Al Gore, among other things) excels is in bringing some fairly dry managerial and behavioural theory to life. He frequently references the motivational practises of companies like Google, Zappos, and Netflix to make his point. He is a very entertaining writer as well, offering up such gems as: “We know that human beings are not merely smaller, slower, better-smelling donkeys trudging after that day’s carrot.” His writing style is not unlike that of Malcolm Gladwell, which makes for an interesting read.

One of the key takeaways from the book is the importance of creating a purpose for your organization that is greater than simply increasing shareholder value. As it turns out, the goal of profit maximization gets very few people out of bed in the morning, even if there is a nice bonus to be had at the end of the year: “the richest experiences in our lives aren’t when we’re clamoring for validation from others, but when we’re listening to our own voice — doing something that matters, doing it well, and doing it in the service of a cause larger than ourselves.”

Pink discusses the rise of “for-benefit” organizations such as Mozilla (the creator of the Firefox browser) and talks about “purpose maximization” rather than a focus strictly on profit. Shared purpose can bring together a group of employees in a way that no forced off-site team-building exercise can. As Pink notes, “Real challenges are far more invigorating than controlled leisure.” Pink writes: “A considerable body of research shows that individuals are far more engaged when they’re pursuing goals they had a hand in creating. So bring employees into the process. They could surprise you: People often have higher aims than the ones you assign them.” Purpose-driven work has the positive side-effect of creating happy and engaged employees who naturally take care of the bottom line. 

Not all organizations will embrace automatically the idea of giving their employees autonomy, or focusing on anything other than the third-quarter earnings call. Pink writes that people have to be strategic — dare we say fox-like? — in order to introduce some of these concepts into the workplace. When dealing with an old-school organization, it pays to be “strategically subversive.”  Pink describes how most of the innovative practices described in the book began the same way:

One smart person couldn’t take it any longer and decided to bend the rules or play the game in a slightly different way. She didn’t make a big announcement about it. Nor did she ask permission. She just took that initial — usually subversive — step. If things failed, she didn’t say a word. If things worked out, she told others. That’s how organizational change often begins — through strategic subversion by people frustrated with the status quo.

He urges us to start small, making small shifts in how we work. He comes from the “better to beg forgiveness than ask permission” school of thought and urges us to “play with boundaries” rather than play within them. The fox most whole-heartedly approves.

In his book, Pink provides a solid foundation of motivational theory that he grounds by providing many examples of how great companies have implemented the theory with real-world success. For anyone involved in change efforts or growth initiatives, or anyone simply wanting to have more fun at work and in life, Drive is a compelling read.

Back to Business

On Friday, I attended the Rotman School of Management’s Life-Long Learning Conference for Leaders. The conference was titled “Get Your Business Back to Reality” and focused on how the business world needs to change in light of the 2008 meltdown of the mortgage-backed securities market and resultant financial crash.

I registered for the conference primarily because I wanted to hear Daniel Pink talk about his book, Drive: The Surprising Truth About What Motivates Us. Also, with my Alumni rate, it was an inexpensive way to spend the day at the new Ritz-Carlton (the not-so-surprising truth.)

Pink is a very engaging speaker. His talk touched on how the current corporate rewards system fed some of the behaviours that led to the financial crisis. He emphasized the need to move away from the widely-held orthodoxy that money is the prime motivator, since research proves otherwise. Financial reward, while appropriate for gaining short-term compliance in completing routine tasks, is not a long-term driver and instead simply invites people to game the system in an attempt to increase personal gain. According to Pink, in order to foster the type of employee engagement that creates long-term growth, people must have a sense of autonomy (the ability to perform a task in their own way,) mastery (the ability to gain competence in a task,) and purpose (the knowledge that a job contributes to a greater good.) These three factors lead to what Pink refers to as intrinsic motivation, a form of motivation that is more effective over the long term and feeds the creative process so needed in business today.

I witnessed intrinsic motivation this weekend when I was on the driving range. None of my fellow golfers were being paid to practice: in fact, we were all paying for the privilege. And yet, everyone there was focused and giving it their best effort because the practice gave us that sense of autonomy (we chose to be there and could practice however we wanted,) mastery (if we continued to practice, we could improve our swing,) and purpose (the more we practiced, the less humiliated we’d be off the tee.) Pink’s research indicated that paying us likely would have created a disincentive to work on our skills: we might only practice as long as we were being paid (and being observed by those paying) and we might not put in our best effort. Pink then talked about companies that are trying to bring a sense of autonomy, mastery, and purpose to the work world in order to bring out the best in employees. Most notable was  Google’s highly regarded “20% time” (developers spend 20% of their week working on whatever projects they like in whatever teams they choose) that has led to the creation of Google News and gmail, two of Google’s most innovative products. If we want to bring out the best business thinking, we must engage the fox, not simply slip him a fifty.

After Pink’s talk, which was fairly broad in its appeal, the day became much more focused on the financial markets. Speakers included: Thomson Reuters Digital’s Chrystia Freeland, Harvard Business Review’s Adi Ignatius, Rotman’s Roger Martin, CBC’s Amanda Lang, The New York Times’s Joe Nocera, FT’s Gillian Tett, and Rotman’s Richard Florida (whose speech I had to miss.) Now, it’s hard to come across as anti-Capitalism when you are speaking in a luxurious ballroom (the chandeliers alone were a tribute to the profit motive) to a crowd of 450 business school grads, most of whom were chattering enthusiastically about the new Conservative majority government at the break, but there was a decidedly critical tone. All of the speakers took aim at our current, so-called free market system (the lack of transparency prevents it from being truly free.) There is a real sense that the current focus on generating escalating profits has undermined the fundamentals of our capital markets (access to capital should lead to economic growth, after all…) and contributed to a proliferation of hedge funds who take bets against the market, investment banks who pit unwitting clients against one another as they play both sides of a deal, pension funds who allow themselves to be counterparties in transactions that ultimately harm their client base, and CEOs who focus on share price at the expense of long-term success. Many of the speakers pointed out that the system has done very little self-monitoring to ensure that a similar crisis does not recur and then discussed possible fixes, given that the whole “love of money” thing is not likely  to go away any time soon.

Roger Martin offered one of the more interesting suggestions, looking to the NFL for guidance (an idea he explores more fully in his new book, Fixing the Game: Bubbles, Crashes, and What Capitalism Can Learn from the NFL.)  He discussed how NFL players are not allowed to bet on the football games since they could — in theory — profit by fixing the game and playing poorly. This is, of course, in direct contrast to S&P 500 companies that encourage and often insist that their senior managers bet on the very game they control by granting stock and stock options. Martin asks why the NFL seems more concerned than Wall Street does about things like the principal-agent problem and moral hazard. Not a bad question…

Gillian Tett, the razor-sharp U.S. Managing Editor of the FT and author of Fool’s Gold: The Inside Story of J. P. Morgan, is a social anthropologist by education and urged us to explore the idea of social cohesion: the notion that societies are more stable when pain is more evenly distributed. In other words, in a world where S&P 500 CEOs make 222 times more than their average worker, senior executives are relatively sheltered from the blowback of an economic downturn to which they might contribute. She talked — only partly tongue-in-cheek — about the need for all of us to watch the children’s film, Kit Kittredge: An American Girl, to contrast the world of the 1930s depression where even the bankers lost everything, to our current state where the  bankers who were most directly involved in the mortgage market fiasco have yet to lose their homes.

Tett also made a remark that reminded me of the great line from The Usual Suspects: “The greatest trick the Devil ever pulled was convincing the world he didn’t exist.”  She said, “the best way to hide something is to do it in plain sight and label it as boring.” Anyone who has read The Big Short knows that part of the reason that things like synthetic derivatives got so out of hand is that very few people took the time to understand the details (Scion’s Michael Burry’s claim to fame was that he was one of the few people to read every prospectus.) Tett talked about paying attention to “social silences” — the notion that what is not being discussed is every bit as important as what is being discussed — and being mindful that the core of the power structure often lies in what is seen to be “boring and geeky.” In other words, while we were keeping up with the Kardashians, it is not surprising that the world changed beneath our feet. It’s been said that both God and the devil lie in the details and while that might not be enough to encourage us to read all 56 pages of the new iTunes legal contract, it should make us want to pay closer attention to things in general.

The general takeaway from the day was that the unchecked greed over the last several years has distracted us from creating true value. The good news is that, in spite of ourselves, the shift to a more entrepreneurial landscape is once again leading to innovation. People do seem to be seeking out intrinsically motivating projects and what the broader business world needs to do is take a page from these innovators and change the system for the better.

I received books from all of the speakers that cover these ideas in more detail and I will be posting reviews of a number of them over the next little while.