This research has essential messages for managers: They should do postmortems so that they don't make the same mistakes over and over again (one of those obvious things that few managers and companies actually do). As I thought about success and failure, I realized that there was a related and equally crucial question: What can leaders do while bad things are happening so that learning and desirable change happens in the organization? After all, bad times and crises often arise in organizations, and go on for substantial stretches, placing pressure on leaders to make the best out of a bad situation as it unfolds (not just after it's over).

There has been a substantial amount written about leaders and organizations in crisis over the years, but for me, the most enlightening study is still Alan Meyer’s classic 1982 Administrative Science Quarterly article “Adapting to Environmental Jolts.” Meyer analyzes a crisis in 19 hospitals in the San Francisco area: After a major malpractice insurer abruptly terminated malpractice for 4,000 northern California doctors and told them any new insurance would come with a 400% increase in premiums, anesthesiologists went on a one-month strike in 1975 against doing any elective surgery. This caused an immediate and drastic drop in hospital admissions and cash flow. Meyer uncovered many nuances among these hospitals’ responses, but the one I still find most interesting was that those hospitals that survived the strike best had leaders who consistently interpreted it as an opportunity rather than a threat.

For example, one hospital used the strike as a dramatic opportunity to celebrate and test their “no layoff policy,” which increased staff loyalty during and after the strike. Indeed, physicians subtly supported the hospital by defining a broader set of cases as “emergencies" during the strike, which meant that they did more surgeries and admitted more patients than other hospitals -- and made more money. Another hospital viewed the strike as a completely different kind of opportunity, using it as a chance to do deep layoffs that it had believed were necessary for years, but did not have the political power to implement before the strike. After the strike, administrators believed that taking this opportunity to do layoffs gave them the license to make changes that likely staved off an otherwise inevitable bankruptcy. Still other hospitals viewed the strike as an opportunity to devote resources to attract nonsurgical patients, which not only helped them endure the crisis, but that left them with greater income after the strike was over. Meyer showed that, by contrast, the less successful hospitals framed the strike as a debilitating threat, making no attempts to attract nonsurgical patients, making few (if any) changes in how they marketed their services, refusing to consider proposals that they change organizational strategies, and communicating serious doubts about the ability of their staff members to perform effectively during the crisis.

In the years since Meyer’s research has been published, a great deal of organizational and psychological research has been published on the power of framing, which shows that whether a challenge is framed as an opportunity or a threat has a huge effect on how people respond. Consistent with Meyer’s work, the opportunity frame leads to far more adaptive behavior and learning that the "threat” frame. The most famous work on framing was done by Daniel Kahneman and the late Amos Tversky, which led to a Nobel Prize for Kahneman. Their work on prospect theory showed that whether people frame an event as a gain or a loss (even though it is the same event) has big effects on their behavior. People are especially (and irrationally) averse to losses. All this work is wonderful, but I still love Meyer’s classic because it provides such rich detail about how the same challenge can have such vastly different effects on organizations that all -- at least on the surface -- face the same problem.

When I combine this post and the last, a pair of lessons seems to emerge for leaders and managers:

* If you want to make the best out of a good situation, focus on what is going wrong and can go wrong.

* If you want to make the best out of a bad situation, focus on what is going right and could go right.

Perhaps I am stretching things too far here, but that is what it makes me think! I invite your comments, as always.

HARVARD BUSINESS ONLINE RECOMMENDS:
Harvard Business Review on Crisis Management (Paperback)
SWOT Analysis I: Looking Outside for Threats and Opportunities (HBS Press Chapter)
Risk Intelligence: Learning to Manage What We Don't Know (Hardcover)

Although the concept of failing forward is widely discussed and makes sense, it has been the subject of limited academic research to date. But some cool stuff is coming out now. An especially interesting pair of studies has been published during the last couple of years in Journal of Applied Psychology by Shmuel Ellis from Tel Aviv University. There have been quite a number of case studies of the after event or after action reviews that are used in the U.S. Army after training exercises, and have now been extended to a variety of settings, ranging from firefighting to corporate actions such as mergers and layoffs. The basic idea is, as soon as feasible after some action occurs, a facilitator and/or teacher should have a conversation with the key participants about what went right, what went wrong, and what could be done better next time. Harvard's David Garvin talks extensively about after action reviews in his book Learning in Action: A Guide to Putting the Learning Organization to Work and presents some compelling cases and arguments about their effectiveness.

Shmuel Ellis and his colleagues have really dug into this issue with, first, a field experiment with two companies of soldiers in the Israel Defense Forces, who were tested for their performance on navigation exercises. The critical difference between the two groups was that -- following standard practice in the Israeli military -- the first company had a series of after event reviews during four days of navigation exercises that focused only on the mistakes that soldiers made, and how to correct them. The second company, in its after event discussions, focused on what could be learned from both their successes and failures.

Then, two months later, these same two companies went through two days of navigation exercises. The results showed that, although substantial learning occurred in both groups:

1. Soldiers who discussed both successes and failures learned at higher rates than soldiers who discussed just failures.

2. Soldiers in the group that discussed both successes and failures appeared to learn faster because they developed “richer mental models” of their experiences than soldiers who only discussed failures.

This study, earlier research, and a subsequent controlled experiment by Ellis and his colleagues show that experiencing failure does lead to more richer mental models than experiencing success. Consider some interesting twists from their more controlled laboratory experiments of after event reviews:

1. After people succeed at a task, they learn the most when they think about what went wrong.

2. After people fail on a task, it doesn’t matter whether they focus on successes or failures. They will learn so long as they do an after event review.

These are, of course, just two studies, but they have several interesting implications for management, assuming that the findings can be generalized to other settings:

1. After event reviews -- whether focused on failure alone or both successes and failures -- spark learning. Sure, you already knew that -- but it amazes me how many companies don’t have time to stop and think about what they learned, but seem to have the time to keep making the same mistakes over and over and over again.

2. After people succeed at something, it is especially important to have them focus on what things went wrong. They learn more than if they just focus on success (so, don’t just gloat and congratulate yourself about what you did right; focus on what could go even better next time).

3. When failure happens, the most important thing is to have an after event review to provoke sufficiently deep thinking -- whether you talk about successes or failures is less important.

Finally, Cisco is a great example of a company that successfully applies after event reviews. I have been especially impressed by -- and written about -- how they take time to do systematic reviews after each merger (and use other evidence-based practices), which may help explain why their acquisitions succeed at a far higher rate than most firms. To paraphrase David Kelley again, this means they make new and different mistakes in each subsequent merger.

HARVARD BUSINESS ONLINE RECOMMENDS:
Learning in the Thick of It (HBR Article)
Putting the Learning Organization to Work: Learning After Doing (Video)
Coaching People: Pocket Mentor Series (Paperback)

I think that it is a good question, and one that I have puzzled over a lot. To their point:

A study of American workers released in March found that 44 percent of Americans reported they have worked for an abusive boss. This study was conducted by the Reed Group for the Employment Law Alliance. They surveyed a representative sample of 1,000 American adults within the past two weeks, which resulted in interviews with 534 workers.

Things are even worse in some occupations, notably medicine. A longitudinal study of nearly 3,000 medical students from 16 medical schools was just published in The British Medical Journal. Erica Frank and her colleagues at the Emory Medical School found that 42 percent of seniors reported being harassed by fellow students, professors, physicians, or patients; 84 percent reported they had been belittled and 40 percent reported being both harassed and belittled. The full report is here. Similarly, a 2003 study of 461 nurses published in the journal of Orthopaedic Nursing found that 91 percent had experienced verbal abuse in the past month. Physicians were the most frequent source of such nastiness, but it also came from patients and their families, fellow nurses, and supervisors.

The No Asshole Rule suggests a few reasons why there are so many.

1. In our society, we value winners so much that, even if they are jerks, we tolerate, or even glorify, them because -- so long as they keep making money or winning games -- we think they are worth the trouble. Exhibit one is Coach Bob Knight and his long tenure at Indiana University. The administration didn’t have the courage to get rid of him because he won so many games, despite a history of atrocious behavior. See this story and the associated 1997 video clip: It sure looks to me like he is choking the player. Knight brags that he “did it my way,” but I don’t want people doing things that way in my organization, no matter how great they “perform.”

2. Tough leaders sometimes create a climate of fear, so that those who surround them are afraid to challenge them or take action against them. If you have seen The Last King of Scotland, the Academy Award-winning film about Idi Amin, you can see an extreme form of these dynamics on display. The same dynamics (albeit in milder form) sometimes surround corporate leaders, as their underlings are afraid to challenge them.

3. Power can turn anyone into a jerk. A large body of evidence (hundreds of peer-reviewed studies) shows that giving ordinary people power over others can make them selfish and insensitive. I wrote a detailed post about this research on my other blog. The upshot is that giving people power causes them to be more focused on satisfying their own needs and less focused on the needs and reactions of those around them, especially those with less power. They act as if social norms don’t apply to them.

4. There are advantages to acting like a jerk, such as when an organization is set-up as a pure “I win, you, lose” game. If you work in an asshole-infested organization, being nasty to others is probably the only way to survive, let alone get ahead. Indeed, that is why I grudgingly wrote a chapter called “The Virtues of Assholes” in the book. But if you are winner and a jerk, you are still jerk, and so you are still a loser by a more important standard. Not everyone thinks that way.

I wrote the book, and the article for McKinsey, because there is a strong business case against allowing assholes to flourish, and my hope is that if organizations begin to come to grips with the evidence, they will take stronger steps to enforce the no asshole rule. And as I have noted here before, there are growing group of executives who believe that enforcing the no asshole rule can help them attract and keep the most talented employees.

What do you think? Why are there still so many demeaning jerks in organizations if they undermine performance (and damage the mental and physical health of others)? Why do so many of these creeps get away with it?

HARVARD BUSINESS ONLINE RECOMMENDS:
Competent Jerks, Lovable Fools, and the Formation of Social Networks (HBR Article)
Bad Leadership: What It Is, How It Happens, Why It Matters (Hardcover)
Hard Facts, Dangerous Half-Truths, and Total Nonsense: Profiting from Evidence-Based Management, A Conversation with Robert Sutton (CD-ROM)
Toxic Emotions at Work and What You Can Do About Them (Paperback)

The great thing about Guy is that he is always trying new things. Some succeed, some fail. No matter what happens, he is always learning. In this spirit, Guy launched a new venture last week called Truemors.com. It is a site where rumors are submitted, and readers vote on whether they think they're true. In the blogosphere, the current buzz about the site is pretty mixed, with some bloggers complaining about the interface, others about the lack of focus, some because he is moderating the comments too much, and others that he is not moderating the comments enough.

Many of these concerns are valid. I found that it was less compelling than Guy’s amazing blog. It needs to be more visually compelling in particular. Regardless of the ultimate fate of Truemors, it is indicative of how entrepreneurship in the current web environment is so much different than the first dot-com boom.

Consider a few details of how Guy launched the site:

1. It was developed for about $12,000 by Electric Pulp. As Guy pointed out in the Wall Street Journal, during the first boom there would be a pitch and (if he was lucky) some VC might have thrown a few million bucks at it. And then after burning through all of that money, it probably would have failed.

2. Guy is treating this as a quick and dirty prototype, and he is getting people in the user community to help him come up with ways to improve it. Now, as with all designers, I am sure that hearing negative comments is no fun, but as we teach our students in the Hasso Plattner Institute of Design at Stanford, the fastest way to improve your prototype is to get it in front of users and to keep iterating in response to their feedback. In the “bad old days” a bunch of VCs would pick away and make suggestions about the site before it was launched. In the new world, for better or worse, you can just put it out there and continually update it in response to customer and user responses. Guy’s site may keep getting better and ultimately succeed, or at worst, it will be a cheap failure and valuable lesson learned.

3. Guy is demonstrating the very essence of design thinking: get a cheap prototype, show it to a lot of people, update quickly based on their feedback. This increases your chances of succeeding and, if you do fail (as will often happen), it will be cheap and fast.

Does this all sound too easy? Perhaps. Indeed, most new web sites, as with most new ventures, fail. But a very interesting student project in our current d.school class Creating Infectious Action, Kindling Gregarious Behavior shows how it works. One of the small student groups came up with something called My eBay Fox, a version of the Firefox browser “customized to provide you with a better eBay experience.” I went to the class last week and learned that they had 30,000 unique visitors to the site so far that week (and it was only Thursday). Over the weekend, I learned that they topped 40,000 unique visitors and 13,000 downloads.

There is also an interesting twist: eBay and Mozilla have been working together for months on a customized version that is similar to the students' project, which they produced in just a couple of weeks. The students came up with this idea without any prior knowledge that eBay and Mozilla were working on a similar product. I was sitting near Mozilla COO John Lilly (who visited class) when he first heard about it. His jaw dropped a bit, but he did not make any attempt to stop the group. After all, Mozilla’s hallmark is open source development (which is why it has fewer than 100 paid employees and over 100 million users).

Now, to return to Guy. He is doing the same thing the students are doing. He put up a quick and inexpensive prototype; he will keep improving it on the basis of feedback. Even if it fails, he will have missed the "fun" of the old style requisite PowerPoint pitches to VCs, and at the extreme, the chance to burn through millions. I am not saying the VC business is obsolete. It's just that if you have a web-based company, you need to have a site up and working -- and making some money -- before you try to pitch it to a VC.

This approach may sound new, but although web prototyping is now more realistic and faster, the notion of doing a lot of things and seeing what sticks is a very old idea. Failing fast and failing forward are hallmarks of creative geniuses through the ages, at least if you believe large scale historical studies done by Professor Dean Keith Simonton at the University of California at Davis. He writes: “Creativity is a consequence of sheer productivity. If a creator wants to increase the production of hits, he or she must do so by risking a parallel increase in the production of misses... The most successful creators tend to be those with the most failures!”

So the most creative people don’t have higher hit rates. They just make more stuff.

HARVARD BUSINESS ONLINE RECOMMENDS:
Serious Play: How the World's Best Companies Simulate to Innovate (Hardcover)
Faster Innovation?: Try Rapid Prototyping (HMU Article)
New Product Development, Business Fundamentals Series (2nd Edition)

This is also a 24-item self-rating test, which answers the question, “Do you make air travel miserable for everyone else.” Take it at www.flyingarse.com.

The Flying Arse was inspired by the stories that people told me after they read the section in The No Asshole Rule about how Southwest and JetBlue have banned persistently nasty passengers. I’ve had a lot of reaction to the story from Ann Rhoades about a loud and rude passenger who was hurling insults at Southwest employees. Ann was the Executive Vice-President for People at Southwest for years. When I interviewed her for the book, she relayed to me how a fellow Southwest executive walked up to the irate passenger, told him that Southwest people didn’t deserve such treatment, and walked the brute over to the American Airlines counter and bought him a ticket. As Ann put it, “People who work for us don’t have to take abuse.”

Despite such admirable efforts, there are still plenty of rude and offensive customers. The stress of travel can transform even the most civilized humans into flaming jerks. The stories that I was hearing about irate passengers inspired me to develop a short survey about the habits of rude passengers for an article that I wrote for EasyJet’s inflight magazine. When I blogged about the story and asked for suggestions for survey items, I received dozens of emails and comments on my blog.

I saw quite a few jerks in action first-hand, sometimes in the seat next to me. Some asshole passengers are subtly rude, like the passenger who kept pressing the flight attendant button because he didn’t get his food and drinks first. Then there's the one we sat next to on a flight back from Dubai last week who used a nasty tone with flight attendants and didn’t waste time with social amenities like “please” or “thank you.” He just gave a flight attendant a cold stare and barked out a phrase like “ blanket” and “water,” and glared at her when she didn’t serve him instantly. He only used sentences with the flight attendant when he was berating her for asking him to turn off his mobile phone.

So, are you a Flying ARSE? Consider a few sample items from the test:

You are skilled at multi-tasking -- walking on the plane, dealing with your luggage, talking on your cellphone all at once. Sure, you sometimes stand in the aisle a little longer and bump into people, but it is a good use of YOUR time.

You have a lot of miles on the airline and make sure that every employee understands that you deserve superior service.

You put your elbows on both armrests, even if there is someone sitting next to you.

Take the test for yourself, or with someone else in mind. I just took it and scored a “4” of 24, which means, if I believe my own scale, that I “sound like a generally civilized passenger.” Please tell us your stories of traveling with -- or maybe even being -- a Flying ARSE.

HARVARD BUSINESS ONLINE RECOMMENDS:
Resolving Conflicts Creatively (HMCL Article)
Beyond the Carrot and the Stick: New Alternatives for Influencing Customer Behavior (HMU Article)
Confrontation Without Conflict (HMCL Article)

HARVARD BUSINESS ONLINE RECOMMENDS:
Payback: Reaping the Rewards of Innovation (Hardcover)
Why Not?: How to Use Everyday Ingenuity to Solve Problems Big and Small (Paperback)
Hard Facts, Dangerous Half-Truths, and Total Nonsense: Profiting from Evidence-Based Management, A Conversation with Robert Sutton, (CD-ROM)

Many don’t realize that they are suffering from the affliction. They constantly demean and de-energize others. My book The No Asshole Rule includes a picture of this button to make the point:

A bit more seriously, the book also includes a 24 question “self-test.” Consider a few sample items:

“You sometimes just can’t contain your contempt toward the losers and jerks at your workplace.”

“You were a nice person until you started working with the current bunch of creeps.”

“You are constantly buttering up your boss and other powerful people, and expect the same treatment from your underlings.”

I worked with Guy Kawasaki, Managing Director of Garage Technology Ventures, to develop an online version of the test. After some discussion, we decided to call it ARSE (Asshole Rating Self-Exam). Give it a try -- see how you do!

The folks at Electric Pulp, who put the test online, report that 83,644 people have completed the ARSE since it went live in February 2007. The mean score is 5.34. I suggest that a score under 5 means that a person is not an asshole, 5 to 15 indicates a borderline asshole, and over 15 indicates a certified asshole (24 is a “perfect” score, a person who is a complete jerk on every dimension). Aaron Mentele from Electric Pulp just gave me a breakdown among all test-takers:

6,142 Certified Assholes (15+)
29,270 Borderline Assholes (5-15)
48,232 Not Assholes (0-4)

I suspect that the average test-taker rates him or herself lower than a 5, and the mean score is driven up because a lot of people take the test with other people in mind -- especially demeaning bosses. I hope you enjoy the test, whether you take it for yourself or someone else.

I am currently working with the folks at Electric Pulp to put a new self-test online: the “Flying ARSE.” This test helps passengers answer the question “Do you make air travel miserable for the rest of us?" Stay tuned, it's going live soon.

HARVARD BUSINESS ONLINE RECOMMENDS:
Hard Facts, Dangerous Half-Truths, and Total Nonsense: Profiting from Evidence-Based Management (Hardcover)
Competent Jerks, Lovable Fools, and the Formation of Social Networks (HBR Article)
Alpha Male Syndrome: Curb the Belligerence, Channel the Brilliance (Hardcover)

Gawande shows how nearly 100,000 Americans die each year from diseases that they catch in hospitals: If doctors and nurses would wash their hands more frequently, this number would fall. He shows how relentless attention to this little detail helps distinguish the best hospitals from average ones.

Gawande also shows how small attention to detail can reduce battlefield injuries. These often-exhausted doctors and nurses are serious about keeping great records so that they can learn how to save more lives from patterns in the evidence. Even after hours of grueling surgery, the norm is that battlefield doctors record the nature of the injuries they are seeing. This attention to evidence has big payoffs. One pattern they uncovered was that soldiers and marines were getting a lot of eye injuries. They asked their patients why they weren’t wearing their protective eye coverings. The answer was that the design was bad. They didn’t want to look like dorks! The goggles were redesigned to look like cool sunglasses, and the eye injury rate went down. This is also a great example of why you need to ask users about problems with products. You might learn something.

To return to my colleague and friend Jeff Pfeffer, this pattern is consistent with what we discovered as we were writing Hard Facts, Dangerous Half-Truths, and Total Nonsense. Great leaders and firms often “win” by doing mundane things well. Think of Southwest Airline's Chairman and Founder's Herb Kelleher saying “Airplanes don’t make any money when they are sitting on the ground.” Or of George Zimmer, CEO and Founder of The Men’s Wearhouse, building a business model around the notion that most of his customers would rather not actually be in his stores buying suits. Wal-Mart Founder Sam Walton’s motto, “everyday low prices,” may have had some controversial effects, but is a simple idea that shapes many, many actions at the discount giant. It was essential to its becoming the biggest retailer in the world.

Similarly, research on what leads to effectiveness says that the answer with the biggest impact is often absurdly simple at first glance. For example, the most powerful personality variable for predicting performance is conscientiousness. Does the person usually do what he or she commits to do? Is he or she reliable and hardworking? When you look at research on decision making in meetings, a fascinating set of studies suggests that if you have people stand up rather than sit down, the meetings run about 35 percent shorter without any loss of decision quality. So: Hire people who do what they say, and don’t let them sit down!

Although breakthrough innovations do happen now and then, and I am all for innovation, our view is that even in those cases, it is the meticulous implementation of a good idea-–rather than just having a great idea itself-–that matters for success. This is why Jeff and I like to say the best organizations know the right thing to do, and then do it.

That's easy to say, maybe even obvious, but hard to do. What "obvious" advice can you share?

HARVARD BUSINESS ONLINE RECOMMENDS:
Better: A Surgeon's Notes on Performance
The Knowing-Doing Gap: How Smart Companies Turn Knowledge into Action
Hard Facts, Dangerous Half-Truths, and Total Nonsense: Profiting from Evidence-Based Management

A lot has been written about the war for talent, and--if you actually take an evidence–based perspective--much of it is nonsense. There are a lot of consulting firms and management gurus out there giving bad advice. My colleague Jeff Pfeffer and I spent a lot of time reading and weaving together overall patterns in peer review studies when we were writing Hard Facts, Dangerous Half-Truths, and Total Nonsense: Profiting from Evidence-Based Management. Recently Jeff testified to Congress about many of these lessons--especially about the implications of research on incentives for civil service reform.

If you want to “win” the talent wars in your firm, five lessons stand out for me:

1. Superstars are overrated. It may seem like you can’t live without them, but you probably can. Check out Boris Groysberg’s research. Boris and his colleagues have some compelling evidence that, when superstars leave, there is little evidence that they do much damage to their firms. There is, however, a lot of evidence that stars aren’t very portable--that unless you can hire the star and his or her team, it likely is a waste of money. Boris tells me that he has some evidence that this finding may not apply to women, that if they have been a superstar in their last firm, they will be a star in their next firm. So it seems that if you hire a man who is a star at another firm, you better steal the whole team, but if you hire a solo woman, odds are it will work.
2. Great systems are more important than great people. The notion that you are doomed to mediocrity if you can’t hire the very best people has little empirical support. Yes, there are big differences between the most talented people and the next level down in most occupations. But systems are more important. Toyota beats the competition as a result of a superior system; Men’s Wearhouse and McDonald’s don’t hire people that are much different from their competitors, but their systems explain their long-term dominance more than their people. As Jeff Pfeffer says, many organizations seem to have “brain vacuums” to turn people who seem to be smart into bumbling fools. Even the most brilliant person is doomed to fail in a bad system, and seemingly mediocre people can become stars in a great system.
3. Create smaller rather than larger pay differences between “star” employees and everyone else. Jack Welch doesn’t believe this; he wants you to give 80 percent of the bonus money to the top 20 percent of your people. And there are a lot of other experts out there who want you to throw most of your salary and bonus dollars to your stars. But Jeff Pfeffer and I have reviewed this literature very carefully and every article that we can find in a peer-reviewed journal--of top management teams, baseball teams, academic departments, manufacturing organizations--finds (controlling for the level of pay) that performance is better when there is smaller distance between the best-paid and worst-paid people. This isn’t an argument for socialism--there are still big differences between the best- and worst-paid people in even the baseball and top management teams with the most compressed pay. But it does suggest that the widening pay gaps between the “best” and “worst” may run contrary to the best evidence.
4. The law of crappy people is probably a myth. I have read of several famous executives (e.g., Steve Jobs) and consulting firms (e.g., McKinsey) that have advocated the law or “rule of crappy people,” which is an assertion that great people will hire other great people, but mediocre people will hire even worse people because they are threatened by competent people. I spent many hours reviewing published research on employee selection, and could find no evidence that it was true. There is evidence that people like to hire people like themselves. And there is some evidence that the most competent people prefer people like themselves, and that less competent people are less picky. But I can’t find any evidence that “B players” or people of average skills and talent levels are afraid to hire people with the same or greater skills.
5. The no asshole rule helps. I was struck by how vehement those CIOs were about how Generation X and Y employees simply weren’t going to put up with nasty bosses and peers. One executive was especially striking as he explained how he learned the wrong lesson from one his first mentors, that a demeaning boss was a good boss. And that he had changed his management style dramatically after figuring out that every time he or one of his colleagues drove someone out and had to replace him or her, it cost them about $100,000--and more for senior people who were driven-out. Indeed, another CIO told me that he had left a higher-paying job for his current one because he just couldn’t stand his boss's demeaning and self-aggrandizing style. And there were several CIOs who emphasized that such bosses and work climates not only drove people out, but they created environments were people devoted too much energy to avoiding blame and the wrath of others, and not enough time to actually doing their jobs. I had not made such a strong connection between the no asshole rule and the war for talent. I was a bit worried about using such blunt language and talking about a “soft” subject with senior people who did such technical work, but they turned out to be one of the most forthcoming and enthusiastic groups that I’ve spoken to.

HARVARD BUSINESS ONLINE RECOMMENDS:
Evidence-Based Management (HBR Article)
Hidden Value: How Great Companies Achieve Extraordinary Results with Ordinary People (Hardcover)
Hard Facts, Dangerous Half-Truths, and Total Nonsense: Profiting from Evidence-Based Management, A Conversation with Robert Sutton, (CD-ROM)
The Risky Business of Hiring Stars (HBR Article)

We were impressed by how well they all did; but the best one just stunned us: "Back to Orbit," which you can see as a YouTube video:

It was made by Gus Bitdinger, who wrote an original song that combined both the lessons we learned in the class with one of the books we read, Orbiting the Giant Hairball by the late Gordon MacKenzie. Hairball is my favorite book about the challenges of doing creative things in organizations, the mindsets and methods that kill creativity, and the ways to overcome them. And somehow – in this little song – Gus captures most of the main ideas in the book and weaves together with much of what happened in class. It reminded me a bit of first reading John Steinbeck’s The Grapes of Wrath and then hearing Woody Guthrie’s classic "Tom Joad," which summarizes so much of that long book so well in a short song. And Gus can sing too!

I have not heard many good songs about corporate life. I should also warn you that there is a bit of censoring of some names, as we thought it best to protect the identity of some of our corporate guests, who were so forthcoming about the challenges of innovating in large companies. But this is the best song I’ve ever heard about innovation.

It is the kind of thing that encourages us as professors to give our students really hard and really weird assignments. In general, one of the main lessons we’ve all learned in STVP and the d.school is that great successes follow when we expect “too much” from our students. Yes, incredible failures happen too – but that is why Diego Rodriguez and I love to say “failure sucks, but instructs.” It is also why Jeff Pfeffer and I emphasize that one of the best diagnostic questions for assessing if an organization is innovative and skilled at turning knowledge into action is “what happens when people fail?” When it is safe to fail, it is also safe to do remarkable –and risky – things like writing and singing "Back to Orbit."

Thanks Gus. I also want to thank everyone else in the class. The nicest thing for me as a professor was that the other students were so proud of Gus, and indeed, I believe that –although it is his original work – the other 10 students in the class deserve much of the credit for creating a setting where Gus could do something so stunning (again, we loved many of the other projects too, and appreciated the less successful ones as well, but Gus’s was the best).

First, in the rush of getting things done, there often wasn’t enough time for reflection. Second, we realized that although the students were coming up with great ideas, we knew from our past experience that just having a great idea wasn’t enough to get it developed in a company. Then, as we were having this concern, I was having some interesting conversations with executives from two large companies about the challenges of getting innovations through a large firm.

So Michael and I decided to teach a class called Innovation and Implementation in Large Organizations. Our concept for the class was the it would be 30 hours of conversation about this problem, sometimes with guests and sometimes with just with class members. Michael and I put out the call for students throughout the campus, and we required students to submit a writing sample (something apparently unheard of at Stanford). We had about 50 students apply and selected a diverse group of 12. One dropped out pretty quickly, and the result was that the 13 of us met every Thursday afternoon for three hours.

The students were quite diverse: engineering students, design students, MBA students. Michael and I found that this class was the perfect contrast to the craziness of the prior courses (and in fact, 6 of the 11 students had been through at least one of these courses), and we are consistently impressed with both the quality of the conversation and constructive tone of the class.

We started by reviewing of the major perspectives on getting innovation done in large companies. We discussed Clay Christensen’s Innovator’s Dilemma and Gordon MacKenzie’s Orbiting the Giant Hairball. The second class included a visit from Lenny Mendonca of McKinsey & Company, who gave us great advice about how to help and set expectations for the set of “clients” who we would be visiting the class in future weeks to talk about innovation and ask for help from the students.

The next two weeks were devoted to visits from a large-company senior executive. Students read cases about the company, heard about the challenges of innovating in a big firm, and then brainstormed ideas for speeding innovation in the company, reporting the results back to the executives. The students challenged the executives from both of these companies to uncover ways to change organizational cultures and work practices, instead of seeing them as insurmountable barriers that were impossible to change.

We had a visit from John Foster at IDEO, who is their (very non-traditional) head of human resources. He described a series of changes that he was leading – it was amazing because he was being completely open with people at IDEO about changes in the career and compensation system he was considering, told everyone what he was thinking, and invited them to join in the design: Not your usual secretive HR system. John is applying IDEO’s most dearly held principles to the organization itself: You involve users heavily from start to finish, you brainstorm ideas, develop a protototype, roll it out in an imperfect form, and keep changing it – with user involvement throughout – so it gets better and better. Jeff Pfeffer and I argued in Hard Facts that the best managers treat their organizations –not just their products or services – as an unfinished prototype, and John’s approach is exemplar. And John – being true to his approach – invited our students to join the process and they suggested additional changes.

Most fun was our visit from Andy Papathanassiou from Hendrick Motorsports. Hendrick fields NASCAR racing cars, with drivers including champions like Kyle Busch, Jeff Gordon, Casey Mears, and Jimmie Johnson. Andy is head of personnel. After graduating from Stanford, Andy started out changing tires in the pit crews and worked his way up. He showed us films about how NASCAR works and talked about innovation has happened in everything from car design to his are of expertise – doing fast pit stops to change four tires and put gas in the cars. As Andy explained, over that 20 years, NASCAR pit crews have shaved over 50 percent off the time it takes to do a pit stop (from about 20 to 12 seconds). Best of all, Andy found a local race car and we all got to practice changing tires. You can see the pictures of us changing tires. It was great fun and we were impressed how – with Andy’s guidance – the student’s times got faster and faster.

Andy Papa instructs Kris Woyzbun on tire-changing technique.

Gus Bitdinger and Adam Sant demonstrate top-notch team work.

John Anderson and Bonny Warner-Simi cheer on Michael Dearing – we competed and Michael changed his tire almost twice as fast as mine (he took about 20 seconds, I took about 40).

The group cheers on Stephanie Jacoby, Sam Goldman, and (I think) Mada Seghete.

P.S. My next post is about our best final exam: Gus Bitdinger’s music video, which is based on Orbiting the Giant Hairball.

HARVARD BUSINESS ONLINE RECOMMENDS:
The Innovator’s Dilemma (Hardcover)
Innovation: The Classic Traps (HBR OnPoint Enhanced Edition)
Orbiting the Giant Hairball: A Corporate Fool's Guide to Surviving with Grace (Hardcover)
The Weird Rules of Creativity (HBR OnPoint Enhanced Edition)

A group of us at Stanford have devoted a lot of energy to building the Hasso Plattner Institute of Design. The d.school, as everyone calls it, is dedicated to infusing design thinking into the brains of Stanford students and guiding them as they use it tackle a host of social and business problems. Our focus is on getting them to understand user and customer needs, on brainstorming solutions quickly, and developing and testing prototype solutions – where failure is cheap but the learning is fast.

You will hear a lot about the Stanford d.school on this blog, as it is one of main places that I devote my time and energy and it is fun to talk about – a different way of teaching and learning.  To give you just a little taste of our philosophy, here is a napkin that two of our co-founders - Executive Director George Kembel and Associate Consulting Professor Diego Rodriguez (of Metacool fame) - came up with to summarize what we aim to do:

Our first class was “Creating Infectious Action,” which we taught last spring. We invited graduate students to apply for the class, and accepted a mix of engineers, product designers, MBAs, and even a philosophy Ph.D. student. The students worked on three major projects to “spread infectious action,” including spreading Firefox (the open source web browser), promoting hip-hip artists, and designing experiences and products that would lead young people who have just entered the job market to save money. Things got pretty crazy at times, as the hip-hop concert created hysteria among the students and teaching team but attracted few people. As we say at the d.school, “failure sucks, but instructs.” We learned a lot from that one, but it hurt. The biggest success was the Firefox project, where the 24 students built at least 11 websites in a two-week period, the most successful of which led to hundreds of Firefox downloads.  Check out these InformationWeek and BusinessWeek stories to learn more.

Also, below, you can see what a d.school class looks like in action. Note how non-traditional it is – the classes are taught in 24-hour flexible space where student teams get a dedicated work area to meet and store their stuff – and all the stuff you see in the picture is constantly moving around to fit the needs of the moment.

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And here is a shot of student teams in the heat of the design process:

The biggest success of the “Creating Infectious Action” class was that we were able to recruit a group of people to help teach the class, which we called Clicks-N-Bricks. The focus was on “redesigning” mass market experiences for customers and employees. The core team was  Michael Dearing,  Perry Klebahn, Liz Gerber, and me. Michael has a Harvard MBA and has had a varied and intriguing career in industry, working at Disney and eBay. One of the coolest – and I bet hardest – things he did was run Filene’s Basement in downtown Boston for three years. Perry, a member of the core team that started and ran the d.school, invented and spread the popularity of the modern snowshoe. After he sold Atlas, his snowshoe company, he was COO of Patagonia and now serves on their board. And Perry is CEO of Timbuk2. Liz Gerber is also a graduate of the Stanford Product Design Program, and has held jobs including middle school teacher, and toy designer. Liz is now working on her doctorate in Management Science and Engineering at Stanford, and has done extensive ethnographic research on the design process. In addition to the core teaching team, we pulled in experts to help students at key junctures, including former senior HP executive and sustainability expert Debra Dunn, Mozilla’s Asa Dotzler who – among other amazing things – lead the Spread Firefox project in the prior and my collaborator Diego Rodriguez, who got involved in teaching and coaching students about the design process. We also pulled in fantastic d.school fellow Alex Ko to teach and coach teams. We had a lot of talent for the 26 students in class.

A lot of great stuff – and some stressful periods – happened in “Clicks-n-Bricks.” The highlight was the capstone project, where our student teams developed solutions to help develop and spread the sustainability movement among Wal-Mart employees and customers.  The students presented their final projects to a group of about a dozen Wal-Mart executives and then they went to Wal-Mart.com headquarters and presented their work to about 150 employees.  You can read a bit more about the teaching team and the Wal-Mart project on my blog.  I especially recommend Min Liu’s post (a student on the class who now works at Google) on Why the d.school works.

Perhaps the biggest sign of success – and something that eases the burden on me – is that the community of folks in the design and business initiative are doing the next Creating Infectious Class without me. Diego, Debra, and Michael - all now Associate Consulting Professors - have taken the reins, and have recruited Perry Klebahn and Brian Witlin as industry coaches, and Kris Woyzbun as the course assistant.  The class will start with a Firefox project, like last year. But the second project is entirely new. It will focus on attracting users to a social venture called Global Giving, an online marketplace that connects donors with social entrepreneurs. 

My next couple posts will talk about a class that Michael Dearing and I just finished on the challenges of innovating in a large company. It was sponsored jointly by the d.school and the Stanford Technology Ventures Program.  This class also entailed efforts to help with the challenges faced my “real” clients, including Procter & Gamble, IDEO, GM, and Hendrick Motor Sports. Stay tuned...