Wednesday, March 23, 2016

Freedom vs Control - case study of 2 Nike factories in Mexico

MIT's Richard Locke researched 2 Nike tshirt factories in Mexico.

These two factories have many similarities - both are in Mexico, both are in the apparel industry, both produce more or less the same products for Nike (and other brands) and both are subject to the same code of conduct.

Plant 1 gave workers complete freedom to decide production targets, team organization and managing production plants and schedule. Employees work in teams and are also responsible for routine maintenance of equipment. Jobs are rotated and they value knowing how to perform a variety of operations and claimed that this opportunity to work on several operations plus in teams significantly improved working conditions. Every morning, the supervisors communicate to each team the style and quantity of products they need to produce. The workers would get together and discuss amongst themselves how much they can actually produce and then meet with the supervisor and agree on the production target for the day. Tthe opportunity to participate in decisions related to work process had a strong and positive effect on work climate

Plant 2 was a tightly controlled unit with set rules and workers assigned fixed jobs and responsibilities. Workers are in fixed, individual stations, are specialized in narrowly defined jobs, which is routinized and repetitive and thus perform the same operation over the whole year. The workers were also not motivated to acquire new skills or perform a variety of operations. The production orders are communicated from the top of the plant’s hierarchy and there is no place for worker participation. The plant manager plans production and distributes the orders to the area supervisors.

The research showed that Plant 1 was more productive churning out 150 tshirts a day compared to Plant 2 which was producing 120 Tshirts a day

Read the entire research here

Tuesday, March 22, 2016

Google rejected Instagram founder Kevin Systrom from its APM programme

Kevin Systrom worked in Google for 3 years before quitting and eventually co founding Instagram which was acquired by Facebook for a billion dollars.

In his book "How Google Works", Eric Schmidt writes about this incident. Salar Kamangar was very impressed with young Kevin who was a marketing associate and wanted to transfer him to the Elite APM program (Associate Product Manager).

He was however rejected because the programme only accepted candidates with a computer science degree. Even though Kevin was a self taught programmer and had a history of working with engineers he wasn't allowed into the programme.

Read the book

Race and Gender diversity is good for Business

In this study by Sociologist Cedric Herring, he found an association between Diverse workforce and increased corporate profits and earnings. This is in contrast to other accounts that view diversity as either nonconsequential to business success or actually detrimental by creating conflict, undermining cohesion, and thus decreasing productivity.

This research tests eight hypotheses derived from the value-in-diversity thesis. The results support seven of these hypotheses: Racial diversity is associated with increased sales revenue, more customers, greater market share, and greater relative profits. Gender diversity is associated with increased sales revenue, more customers, and greater relative profits.

 The value-in-diversity perspective makes the business case for diversity, arguing that a diverse workforce, relative to a homogeneous one, produces better business results. Diversity is thus good for business because it offers a direct return on investment, promising greater corporate profits and earnings.

A paradoxical view suggests that greater diversity is associated with more group conflict and better business performance. This is possible because diverse groups are more prone to conflict, but conflict forces them to go beyond the easy solutions common in like-minded groups. Diversity leads to contestation of different ideas, more creativity, and superior solutions to problems. In contrast, homogeneity may lead to greater group cohesion but less adaptability and innovation.

Facebook rejected Whatsapp cofounders job application in 2009

WhatsApp co founder Brian Acton had applied for a job at Facebook in 2009 but was rejected. He had posted this sad tweet "Facebook turned me down. It was a great opportunity to connect with some fantastic people. Looking forward to life's next adventure."

Here's the link to the tweet

He eventually sold his company WhatsApp to Facebook for a whopping $19 billion

Monday, March 21, 2016

Listening to Problems followed by a Solution results in a Positive ruboff

In this research, the team found that just 3 minutes of Negative news in the morning can lead to a 27% higher likelihood of you having a bad day. The negative news in the morning can set the trend for the day.

One group was exposed to Negative News and another was exposed to Negative News with a solution focus. Individuals who watched just three minutes of negative news in the morning had a whopping 27% greater likelihood of reporting their day as unhappy six to eight hours later compared to the positive condition.

The article however also proposed another theory. When exposed to a Problem followed by a solution, the mood significantly changed. Participants were found to be less hostile than those only exposed to the problems.

Also read Consuming Negative News can make you less Effective at Work

Tuesday, March 15, 2016

Using Round figures in Negotiations may be disadvantageous

In this Harvard Research paper on "Initial Offer Precision and M&A Outcomes", the researchers put forward evidence to show that the maker of the first offer may be able to further tilt the bargaining game to her advantage by expressing the offer price in precise terms. For example, a list price of $1,020,000 is more informative and likely to lead to a smaller price adjustment than a list price of $1,000,000.

In another example, he states that a bid for $10.20 per share leaves the impression that the bidder is less likely to revise the bid significantly upward than a bid for $10.00 per share.

Some of the reasons are
1. Competing bidders may view precise offers as more informed, and, perhaps because of the winner’s curse, may not wish to enter a bidding contest against an ostensibly more informed bidder
2. Targets may interpret precise offers as evidence that the acquirer is informed and knows what it is doing.
3.  Targets may be more willing to close the deal with a party they consider competent

Managing Disagreements - If you don't like my idea you don't like me

Anthony Schuman, a health services researcher, has published a paper on Human relationships. Through his teaching and writing (more than 90 articles and book chapters and the book “Partnerships in Healthcare: Transforming Relational Process”) he has become a leading proponent of a partnership-based clinical approach known as Relationship-Centered Care. His work focuses on organizational change and how people can work together more effectively across all levels of healthcare.

When people disagree at work, it is often misinterpreted as a personal attack. The standard reaction is that " If you like my idea, you like me, if not, you don't like me"  src HBR

Suchman recommends using a series of Relationship building statements represented in the Acronym  PEARLS. src

            We’ll see this through together
            I really want to work on this with you 
            It sounds like that was frightening for you
            I can sense your sadness
            Great – I can see how happy that made you
            You put a lot of work into this.
            You did the right thing
            I so respect your knowledge
            I’ve always appreciated your ability to stay focused in a crisis
            This would be hard for anyone
            Who wouldn’t be worried about something like this?
            I’d like to help you with this
            I want to see you succeed

Monday, March 14, 2016

How a Toll strike revealed that the Toll collectors were stealing money

This NYTimes story cites a very interesting case of a Toll collector strike in England. During the strike drivers were just asked to put the toll money into a collection box. Surprisingly the government collected more told money during the strike. This indicates that the drivers were fairly honest but also indicated that the Toll collectors had been stealing a lot of money.

The Bagel story and Dishonesty

Paul Feldman, an Economist, was a Director research at a firm. He used to love Bagels and carried a few extra for his colleagues at work. Soon employees from the neighboring floors heard about it and they would want some too. So, he started bringing more bagels to work and would leave out a cash basket to recover his costs. His collection rate was about 95%.

After a point of time people would refer to him as the Bagel man instead of his fancy Director Research position.

Soon he quit his job and decided to get into the Bagel business. He drove around offices delivering Bagels early in the morning and would leave a cash basket in the company's snack room. He would return around Lunch and pick up the money and leftovers. It was an honor system. Within a few years he was delivering around 10,000 bagels a week to 140 offices.

He also inadvertently designed a beautiful economic experiment. By measuring the amount of money collected he could tell how honest his customers were. On the basis of this he could characterize a company and predict White Collar crime.

Some of his insights were
  • If payments is 90% or more then the company is honest
  • After Sept 11 terror attack, the collection rate iAs mproved by 2%. It may represent a surge in empathy.
  • Initially he left open cash baskets, but money would get stolen. Later he setup wooden money boxes with a slot. Of the 7000 cash boxes only one box got stolen.
  • People who steal his bagels never stoop to steal his money.
  • Telecom companies have robbed him
  • It also isn't worth the effort delivering to Law firms
  • Employees further up the corporate ladder cheat more than those down below.
  • Places where security clearance was required for an individual to have a job weren't that honest.
  • In places where people like their bosses, payment rate is high
  • Smaller offices with a few dozen employees have high payment rates than offices with a few hundred employees.
  • As unemployment rate goes down dishonesty goes up.
  • Payment rate doesn't change with increase in Bagel prices.
  • Unreasonably Pleasant weather makes people pay a higher rate.
  • Unseasonably cold weather makes people cheat
  • Holidays like Christmas week produces a 2 percent drop in payment.

Tuesday, March 8, 2016

What do you want in a Logo? - The pleasure of recognition and promise of meaning

Paul Rand defined the Logo as "The pleasure of recognition and the promise of meaning." What everyone gets confused about is the difference between meaning and the promise of it; like the "pursuit of happiness," what you're guaranteed is not success but its potential. src Design Observer article

Paul Rand was an American art director and graphic designer, best known for his corporate logo designs, including the logos for IBM, UPS, Enron, Morningstar, Inc., Westinghouse, ABC, and NeXT

Twitter has proven to be a nightmare for Logo Designers. Any new Logo design is subjected to an intense Twitter Firestorm with the inevitable "Even my 5 year old could have come up with something better"

In this article "Not Diving but Swimming", the author talks about a few secrets

In recent times some of the Logos that were mocked were

Uber has a New Logo and the Internet is not pleased - CNN article

MET Museum logo

The Metropolitan Museum of Art's Logo is a Typographic Bus Crash

Monday, March 7, 2016

Great Leadership - Allow yourself to be Persuaded

In his book "Persuadable",  Al Pittampalli talks about how great Leaders are those who are open to listening to others' opinion and allow themselves to be Persuaded.

Alan Mulally, the vaunted CEO who saved Ford Motor Company, is, for example, exceptionally skeptical of his own opinions. Ray Dalio, one of the world’s most successful hedge fund managers, insists that his team ruthlessly second-guess his thinking. Christine Lagarde, managing director of the IMF, seeks out information that might disprove her beliefs about the world and herself. One Nobel Prize-winning scientist discovered the cause of ulcers by bravely doubting his own entrenched beliefs.

In 1971, Phil Knight the founder of Nike favored "Dimension Six," as the name of his company but his 45 employees thankfully laughed that one down. Then Jeff Johnson, '63, a fellow running geek, proposed a name that came to him in a dream: Nike, for the Greek winged goddess of victory. The company paid $35 to commission a new logo--a fat checkmark dubbed a "swoosh"--and the new shoe debuted at the 1972 Olympic trials in Eugene, Ore. src Stanford - The Force Behind the Nike Empire

In our increasingly complex world, these leaders have realized that it is impossible to have all the answers and the ability to consider emerging evidence and change their minds accordingly provides extraordinary advantages.

In his book he also quotes Bezos "People who are right change their minds a lot. You need to have ideas tomorrow that contradicts ideas you have today".

Read the book

Sunday, March 6, 2016

Vice follows Virtue - Rewarding healthy food consumption with Unhealthy food

In an experiment where items being loaded into grocery carts were tracked, it was observed that for every healthy food that was added to the cart the shopper was more likely to then go over to ice cream or beer section.

After purchasing Virtue categories, consumers are more likely to shop at locations that carry vice categories.

This balancing act is very similar to how people reward themselves with beer or cake after a killer workout.

This is also known as a Tit for Tat effect.

In one experiment, one group was given placebo pills which they believed to be dietary supplements. This group expressed less desire to engage in exercise and more desire to engage in hedonistic activities like smoking and excessive eating. Another group was given the same pill and were told that it was a placebo and this group did not exhibit any of the hedonistic behavior of the first group.

In another experiment a group of smokers who thought they were given a Vitamin C pill smoked nearly twice as many cigarettes while filling out a questionnaire in comparison to a group who were told the pill was a placebo

Also read - NYTimes story - How Salad can makes us Fat

Optimising Healthy eating - A Google case study

Google is known for providing great food for free to its employees. In this HBR article, How Google Optimized Healthy Office Snacks, it talks about how subtle changes can promote Healthy eating. A few examples cited in the story are

  • Distance from Beverage station to snack bar makes a difference. It was observed that people tend to pick up a snack along with a beverage. The closer the snack station, the more likely people were to pick up a snack along with a beverage. Increasing the distance between the beverage station and snack station resulted in reduced consumption of snacks thus resulting in lower calorie consumption
  • Promoting unpopular healthy food next to the food helps. It was perceived that advertising healthy foods like Beetroot, cauliflower etc wouldn't get people to eat more. However, it was found that putting up posters right next to the dish with pictures and trivia increased the consumption of these foods.
  • Size of the bowl matters. M&M is very popular in Google and were made available through self serve bins with 4 ounce cups. Most People tended to fill the cups. The loose M&Ms were then replaced with small packages. This simple intervention reduced the average serving by 58%, from 308 calories to 130.

Tuesday, March 1, 2016

Meaning of Short/Long range planning - Peter Drucker

According to Drucker - The Idea of Short - Long range planning is very often misunderstood. They are not determined by any given Time span.

A decision is not short range because it takes only a few months to implement or long range because it takes a year to do so.

What matters is the time span over which it is Effective