Way back in the old days (early 1990s), when I worked for Target, I used to exercise over the noon hour at the Northwest Arena Club in downtown Minneapolis. I remember watching with great comic amusement as a stressed out attorney that I knew would run countless laps around the indoor track while dictating into a hand-held recording device. I imagined his executive assistant struggling to transcribe his breathless memos. He was truly the Neanderthal version of today's "multitasker."
A recent New York Times front page story is entitled, "Hooked on Gadgets, and Paying a Mental Price: Constant Use Takes a Toll on Concentration and Family Life." The article highlights the challenges faced by Kord Campbell, founder of an Internet start-up company. Campbell is so addicted to e-mail and the Internet that, "Even after he unplugs, he craves the stimulation he gets from his electronic gadgets. He forgets things like dinner plans, and he has trouble focusing on his family. His wife, Brenda, complains, 'It seems like he can no longer be fully in the moment.'"
Kord Campbell's saga- cautionary tale though it is- sounds familiar to most of us. Perhaps uncomfortably familiar. How much time do you spend sifting through and responding to e-mail on a daily basis? How much time surfing the web? How much do you love video games? Are you at a loss without your laptop, iPhone, or Blackberry? When was the last time you spent several hours, uninterrupted, working on a critical issue or problem?
In this age of astounding technical wizardry, smart business people still recognize that excessive devotion to our electronic lifelines can be a distraction and siphon time from more important matters. Though our ability to communicate has been vastly enhanced in recent times, our ability to focus has not. Awareness of this conundrum is key to enabling us to step back and carry out a very important leadership responsibility: taking time to concentrate.
Entrepreneur magazine published a piece in March 2010 called, "E-mail Is Making You Stupid." Business reporter Joe Robinson tells us that the average office worker checks e-mail 50 times and sends 77 instant messages daily. The typical employee loses more than two hours per day in productivity as a result of electronic interruptions. Computer chip maker Intel generated an estimate of how much money large companies lose annually from distractions caused by excessive e-mails: $2 billion. And the situation is not getting better. The E-Policy Institute warns that e-mail volume is growing by a rate of 66% per year. This electronic deluge not only costs companies dearly in productivity, it creates incredible stress, decreases job satisfaction, and diminishes creativity.
In his book, The Shallows: What the Internet Is Doing to Our Brains, technology author Nicholas Carr argues that the very way we think and experience the world has been dramatically altered by the Internet. Studies demonstrate that extended use of the Internet quickly and significantly alters the brain's neural pathways, creating a tendency to skim rather than read closely, become easily distracted, and learn only superficially. Research also demonstrates that people who read linear text- as in a book- comprehend and remember more than those who read text with numerous links- as on the Internet. Carr says, "Once I was a scuba diver in a sea of words. Now I zip along the surface like a guy on a Jet Ski."
Some people claim to be able to manage myriad electronic inputs and remain highly productive because they are "multitaskers." Unfortunately, their imagined ability is a myth. Joe Robinson says, "The cult of multitasking would have us believe that compulsive message checking is the behavior of an always-on, hyper-productive worker. But it's not. It's the sign of a distracted employee who misguidedly believes he can do multiple tasks at one time. Science disagrees. People may be able to chew gum and walk at the same time, but they can't do two or more thinking tasks simultaneously."
Critics point to studies that suggest that some cognitive tasks, like visual perception and sustained attention, actually improve as a result of using screen-based technologies. Many scientists, however, suggest that more brain activity is not necessarily better brain activity. Developmental psychologist Patricia Greenfield asserts, "every medium develops some cognitive skills at the expense of others." She acknowledges that use of the Web has led to the "widespread development of visual-spatial skills," but simultaneously we have lost "deep processing" capabilities that are foundational to "mindful knowledge acquisition, inductive analysis, critical thinking, imagination, and reflection."
Some companies understand the new reality and are fighting back. Intel has implemented "Quiet Time" at two of its locations. During designated Quiet Time, no one is allowed to engage in messaging or phone contact. Employees are expected to concentrate and work quietly on their own. Companies such as Deloitte & Touche and U.S. Cellular have mandated restricted e-mail use and encouraged face-to-face meetings. They have also tried such ideas as "no e-mail Friday."
What can individuals do to carve out time to concentrate and get work done?
• Check e-mail only a few times daily, rather than continuously; let people know that you will check messages at 8 a.m., noon, and 4 p.m.
• Whenever possible, meet face-to-face or talk by phone as the preferred mode of communication.
• Prioritize your tasks for the day, and set aside time to focus quietly on those issues; don't simply respond to whatever is in front of you.
• Don't send an e-mail unless absolutely necessary, and resist the temptation to copy people that have no "need to know."
• Work offsite from time to time if your employer and work situation allows it.
Recognition of the potential adverse effects of the electronic bombardment that we all weather on a daily basis is the first step in dealing with the problem. Consciously and consistently creating time to focus and concentrate is the solution.
Friday, June 25, 2010
Saturday, June 12, 2010
Use the Right Data
Some of the most serious and prevalent problems that plague modern business result from using the wrong data to make decisions, measure outcomes, and incent performance. Recently, business journalist Geoff Colvin wrote, "In business as in life, be careful what you wish for. I know a company that wished for a better return on equity. What could be wrong with that? It paid its executives according to that measure, and man, did they deliver. In some years the firm had the best ROE in the industry. It was winning big time. The firm was Lehman Brothers, now dead because managing for ROE caused executives to overborrow…. Wishing for the wrong thing- managing for the wrong ratio- killed the company."
The cautionary tale of Lehman Brothers is just one among many to come out of the Great Recession. These days, smart business leaders are meticulously careful to use the right data.
We are obsessed by numbers and have become increasingly good at measuring all manner of things. The July-August 2009 issue of Harvard Business Review states, "Data, computing power, and mathematical models have been transforming many realms of management from art to science. But the crisis exposed the limitations of certain tools. In particular, the world saw the folly of reliance by banks, insurance companies, and others on financial models that assumed economic rationality, linearity, equilibrium, and bell-curve distribution. As the recession unfolded, it became clear that the models had failed badly."
The measurement tools and models are not themselves necessarily flawed. Business leaders simply need to become more adept at comprehending and using the data they generate. HBR argues, "…. decision makers in every industry must take responsibility for looking inside the black boxes that advanced quantitative tools often represent and understanding their functioning, assumptions, and limitations."
Consider the incredibly controversial issue of executive and, specifically, CEO compensation. Duke University business professor Dan Ariely points out that numerous studies demonstrate that people will behave based upon whatever measures we use to evaluate them. It seems too simple to contemplate but, says Ariely, "Human beings adjust behavior based on the metrics they're held up against. Anything you measure will impel a person to optimize his score on that metric. What you measure is what you get. Period."
Chief executives are overwhelmingly evaluated based on a single data point: the value of their company's stock. Even measuring CEOs against several years worth of stock returns does not necessarily incent them to consider the long-term health of the enterprise they lead: they are still obsessed by stock price. It is not surprising, therefore, that because they are compensated based on that one measure, most CEOs spend an inordinate amount of time considering and working towards an improved stock price.
Professor Ariely says, "To change CEOs' behavior, we need to change the numbers we measure. Stock value metrics that focus on the long term are a start, but even more important are new numbers that direct leaders' attention to the real drivers of sustainable success. What are those numbers? …. How many new jobs have been created at your firm? How strong is your pipeline of new patents? How satisfied are your customers? Your employees? What's the level of trust in your company and brand? How much carbon dioxide do you emit?"
Geoff Colvin asserts that businesses should evaluate performance using a new metric, called "EVA momentum." Economic value added, or EVA (a measure used by some companies) is essentially profit after charges for all the factors of production, and an improvement in EVA presumably results in increased value. Yet some business thinkers believe EVA can still be manipulated. EVA momentum is defined as the change in EVA divided by the prior period's sales and, the argument goes, simply cannot be tinkered with. Consultant Bennett Stewart says, "It's the only performance metric where more is always better than less. It always increases when managers do things that make economic sense."
Even at the level of macroeconomics and public policy we see much current discussion about the data that informs decision making. Nobel prize-winning economists Joseph Stiglitz and Amartya Sen produced a recent study that blames disproportionate focus on growth in the form of gross domestic product- the quantity of goods and services produced in the economy- for contributing to the world-wide recession. An unhealthy fixation on G.D.P. causes governments to overlook such problems as joblessness and environmental degradation, which are also important quantifiers of the overall health of the economy. Stiglitz says, "If you don't measure the right thing, you don't do the right thing," and he advocates for more attention on such benchmarks as income and consumption, availability of health care, and quality of education.
Temple University mathematics professor John Allen Paulos wrote an article recently in the New York Times Magazine called: "Metric Mania: Do we expect too much from our data?" Dr. Paulos says, "In the realm of public policy, we live in an age of numbers…. The problem isn't with statistical tests themselves but with what we do before and after we run them." He argues that measures in such areas as school performance and health care can be second-guessed, but that, "This doesn't mean we shouldn't be counting…. it does mean we should do so with as much care and wisdom as we can muster."
Albert Einstein supposedly said, "Not everything that can be counted counts, and not everything that counts can be counted." What measures do you use in your business to make decisions, assess performance, and reward behaviors? Are you careful and wise in your use of data, or do you rely on certain metrics just because you've "always done it that way"? The answers to these critical questions are essential to the future success of your business.
The cautionary tale of Lehman Brothers is just one among many to come out of the Great Recession. These days, smart business leaders are meticulously careful to use the right data.
We are obsessed by numbers and have become increasingly good at measuring all manner of things. The July-August 2009 issue of Harvard Business Review states, "Data, computing power, and mathematical models have been transforming many realms of management from art to science. But the crisis exposed the limitations of certain tools. In particular, the world saw the folly of reliance by banks, insurance companies, and others on financial models that assumed economic rationality, linearity, equilibrium, and bell-curve distribution. As the recession unfolded, it became clear that the models had failed badly."
The measurement tools and models are not themselves necessarily flawed. Business leaders simply need to become more adept at comprehending and using the data they generate. HBR argues, "…. decision makers in every industry must take responsibility for looking inside the black boxes that advanced quantitative tools often represent and understanding their functioning, assumptions, and limitations."
Consider the incredibly controversial issue of executive and, specifically, CEO compensation. Duke University business professor Dan Ariely points out that numerous studies demonstrate that people will behave based upon whatever measures we use to evaluate them. It seems too simple to contemplate but, says Ariely, "Human beings adjust behavior based on the metrics they're held up against. Anything you measure will impel a person to optimize his score on that metric. What you measure is what you get. Period."
Chief executives are overwhelmingly evaluated based on a single data point: the value of their company's stock. Even measuring CEOs against several years worth of stock returns does not necessarily incent them to consider the long-term health of the enterprise they lead: they are still obsessed by stock price. It is not surprising, therefore, that because they are compensated based on that one measure, most CEOs spend an inordinate amount of time considering and working towards an improved stock price.
Professor Ariely says, "To change CEOs' behavior, we need to change the numbers we measure. Stock value metrics that focus on the long term are a start, but even more important are new numbers that direct leaders' attention to the real drivers of sustainable success. What are those numbers? …. How many new jobs have been created at your firm? How strong is your pipeline of new patents? How satisfied are your customers? Your employees? What's the level of trust in your company and brand? How much carbon dioxide do you emit?"
Geoff Colvin asserts that businesses should evaluate performance using a new metric, called "EVA momentum." Economic value added, or EVA (a measure used by some companies) is essentially profit after charges for all the factors of production, and an improvement in EVA presumably results in increased value. Yet some business thinkers believe EVA can still be manipulated. EVA momentum is defined as the change in EVA divided by the prior period's sales and, the argument goes, simply cannot be tinkered with. Consultant Bennett Stewart says, "It's the only performance metric where more is always better than less. It always increases when managers do things that make economic sense."
Even at the level of macroeconomics and public policy we see much current discussion about the data that informs decision making. Nobel prize-winning economists Joseph Stiglitz and Amartya Sen produced a recent study that blames disproportionate focus on growth in the form of gross domestic product- the quantity of goods and services produced in the economy- for contributing to the world-wide recession. An unhealthy fixation on G.D.P. causes governments to overlook such problems as joblessness and environmental degradation, which are also important quantifiers of the overall health of the economy. Stiglitz says, "If you don't measure the right thing, you don't do the right thing," and he advocates for more attention on such benchmarks as income and consumption, availability of health care, and quality of education.
Temple University mathematics professor John Allen Paulos wrote an article recently in the New York Times Magazine called: "Metric Mania: Do we expect too much from our data?" Dr. Paulos says, "In the realm of public policy, we live in an age of numbers…. The problem isn't with statistical tests themselves but with what we do before and after we run them." He argues that measures in such areas as school performance and health care can be second-guessed, but that, "This doesn't mean we shouldn't be counting…. it does mean we should do so with as much care and wisdom as we can muster."
Albert Einstein supposedly said, "Not everything that can be counted counts, and not everything that counts can be counted." What measures do you use in your business to make decisions, assess performance, and reward behaviors? Are you careful and wise in your use of data, or do you rely on certain metrics just because you've "always done it that way"? The answers to these critical questions are essential to the future success of your business.
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