The View from Harvard Business

Society has legitimate research needs for human cadavers. Scientists use them for studying disease. Medical students and emergency workers use bodies or parts of bodies for training.

But there are so many taboos around the selling of human bodies, not to mention laws, that we suffer a cadaver shortage. Normally, capitalism would encourage providers to step forward and fill this demand with offerings based on prices established by a market. But we as a society are understandably squeamish about the idea of anatomical parts as commodities.

Not that some businesses aren’t trying. A few entrepreneurial ventures have started up over the last decade to meet the need, acting as matchmakers between donors and health care providers. But these firms are paid service fees, not prices set by a market.

Harvard Business School professor Michel Anteby, whose research dwells in moral gray zones, says that at the least we need analysis and discussion in this arena to inform political debate. As he frames the issue:

“Greater availability of cadavers for medical science could accelerate the quality of medical training and procedures — a fact most users recognize. Nonetheless, how much trust can be put in markets to ensure these outcomes? How should a donor decide between two donation options? What are the logics of such a decision? What does competition for whole-body donations look like? How might this impact other donations? More importantly, perhaps, should programs compete for donations? All these questions require empirical examination.”

Read Anteby’s though-provoking piece on HBS Working Knowledge, A Market for Human Cadavers in All But Name. BTW, a post I wrote on Anteby’s gray zone work was one of my most popular (and controversial.)

What do you think? Are there some places where market solutions are just inappropriate? Are we ready to think about selling Aunt Tilly’s remains to the highest bidder?

Here is a really, really scary factoid from Harvard Business Review.

“A majority of U.S. managers surveyed by the Business Literacy Institute were unable to distinguish profit from cash, and many didn’t know the difference between an income statement and a balance sheet.”

Admittedly, not all managers run P&L shops (That’s “profit and loss” for you same folks identified in the paragraph above.) But still. Can you call yourself a manager without understanding the basic financial metric upon which your company’s success is based?

This suggests, as does the related HBR article, that we need to do a much better job of training our employees in basic financial principles.

Take our poll. How would you describe your own financial literacy?

 Loading ...

Not every recession-squeezed business needs to lay off employees. But the alternative, becoming a proud and proclaimed “no-layoff company,” requires sacrifices that are shared by employer and employee.

Some firms are already making it work.

Take Hypertherm, in Dover New Hampshire. The company, which makes industrial strength cutting tools, has seen its business fall 50 percent. There have been no layoffs. But there have been personnel changes.

According to an account on NPR, employees not needed on the front lines are reassigned to other duties, which may even include grounds maintenance. The company is trying to move all its work in-house and staff it with current employees who otherwise might be out of a job. The goal is to hold on to as many people as it can for when business picks up again.

This can be a great strategy for companies that rely on highly skilled workers, such as Hypertherm. It would be even more costly and years in the making to have to hire replacements and train them to be as productive.

But even employers of lower-skilled workers can benefit by this approach. The Nugget Markets grocery chain, which boasts of never having a layoff in its 82 years, cross-trains to provide more work force flexibility. The benefit? If a deli worker’s hours fall,  she can make it up by training as a bagger, a job she performs at the higher deli pay scale.

There are other ways, of course, to avoid the ax. Many firms ask for volunteers to take extended vacations, a sabbatical, leaves of absence, or a shorter work week. Salary freezes and cuts are common as well. But these approaches still shift much of the burden to the employee. The best solution is when employer and employee can share the pain to, eventually, share the gain.

Jordan Siegel, an associate professor at the Harvard Business School, says he has seen this shared-pain model used in South Korea, but not much in the U.S.  “There has been this shared sacrifice, people sharing some reductions in compensation, in order to avoid layoffs,” he tells NPR.

Has your company taken innovative steps to retain employees?

One of the core tenets of the Financial Stability Improvement Act of 2009, which continues to advance its way through Congress, is to identify systemically dangerous financial firms (i.e., too big to fail) that would be subject to special government monitoring and regulation.

There is just one problem with this proposed legislation, but it’s a doozy — and you should be outraged. The list of systemically dangerous firms will be kept secret from American taxpayers, the very people who ponied up in the current financial crisis.

Harvard Business School professor David Moss says this single provision undermines much of the potential good work of the larger legislation. Why?

For one, all reports to Congress concerning these institutions would also be private, weakening any thought that Democratic oversight might be a good idea. The legislation could also lead to weaker and inconsistent regulation on these institutions (not that we would know!), and unfair “stabilization” payments required of less systemically important firms.

Moss continues:

“To be successful, the final legislation must require the creation of a public list of all systemically dangerous financial institutions; and it must ensure that these firms are subjected to dramatically heightened regulation to control excessive risk taking.  In fact, the regulation of these firms must be so tough that they feel a strong incentive to slim down or break up in order to get off the list.  Such a vital public mission will never be achieved in the shadows.”

Couldn’t agree more. How do you feel about this idea of a secret list?

Harvard Business School is one of the first top business schools to add a consumer finance course to its offerings.

Ironically, as course instructor Peter Tufano points out, the typical HBS MBA would have analyzed financial statements from hundreds of companies, but never studied the financial records of even a single household. The disconnect: consumer spending drives the economy, and households account for $61 trillion in assets.

That was remedied when Tufano introduced the course earlier this year, co-teaching with Harvard Law professor Howell E. Jackson.

“We begin by having them analyze real numbers for real household budgets,” Tufano says in this interview with the HBS Alumni Bulletin. “We also bring in concepts from behavioral economics, psychology more broadly, and sociology. We have cases and materials that are at the household level, because we think that before you can discuss business practice or public policy, you must first understand households.”

Students also learn about the institutions that serve consumers including banks, insurance companies and credit card issuers. They design a budget for an average Boston family, figuring expenses for food, transportation and insurance.

Tufano hopes to build a field of academic study around the consumer. In an article in the current issue of Harvard Business Review, written with Annamaria Lusardi, Tufano suggests that companies should help employees achieve a basic level of financial literacy, such as understanding how debt works.

“Piling up credit card debt at rates of 18% or higher while investing a small fraction of weekly pay into a 401(k) may not be the best way for an employee to achieve financial well-being.”

If you were going to teach MBAs the basics about how consumers save and spend, where would you begin?

(Dollars and cents image by Mr VJ Tod, CC 2.0)

I’m not a WWII historian, but the story of General George S. Patton and his self-destructive leadership has always fascinated me. He was a tremendous motivator of troops, but at the same time he had a dark side that allowed him to slap a sick soldier in an infirmary because Patton thought him a coward.

The same virtues that earned him the admiration of his people, bravery and loyalty, turned into bullying and ostracizing when Patton felt challenged. So thanks to Gill Corkindale for shining a light on this common failure in many of us that turns our acknowledged strengths (enthusiasm/charm/focus) into weaknesses (volatility/manipulativeness/passive aggression). Writing on Harvard Business Publishing, Corkindale observes:

“All too often (leaders) are aware only of the positive effects of their personalities, screening out the negative impact on those surrounding them. If they remain impervious to feedback — or the organizational culture doesn’t support individual feedback — then senior leaders can be in serious danger of sabotaging their careers as well as their companies.”

How does this happen? Corkindale posits that we are so praised on these strengths throughout our career that we become blind to their “shadow side.”  If you have a reputation as diligent, you might at times slop over into perfectionist without really knowing.

Read Corkindale’s post, Don’t Let Your Strengths Become Your Weaknesses, for the best ways to check these tendencies in yourself and others. One tip: The anonymous 360-degree review provides one way your reports and peers can be honest in their observations of your performance.

Have you noticed a boss whose best traits morph into something more dark?

(Patton image by Paul Keleher,  CC 2.0)

On a recent weekend I took a Defriend Hatchet to my Facebook account, lopping out a good 50 people including a fourth grade classmate, a barber from a time when I had hair, and a colleague from a job 17 years ago whom I didn’t like even then.

Apparently I’m not alone in my desire to tame my online social world. David Armano, co-founder of social media marketing firm Dachis Corp., predicts that social networks will actually become less social in 2010. He writes on his Harvard Business Publishing blog:

With groups, lists and niche networks becoming more popular, networks could begin to feel more “exclusive.” Not everyone can fit on someone’s newly created Twitter list and as networks begin to fill with noise, it’s likely that user behavior such as “hiding” the hyperactive updaters that appear in your Facebook news feed may become more common. Perhaps it’s not actually less social, but it might seem that way as we all come to terms with getting value out of our networks — while filtering out the clutter.

That sounds right to me, but the question for BNETers is what does this winnowing mean for Internet marketers and service providers? If people become more selective about who they tether themselves to online, it might be harder for you to grab their attention. On the other hand, smaller lists usually present better defined potential customers.

Does this trend change about how you think of social network marketing?

By the way, read Armano’s entire post, Six Social Media Trends for 2010.

Related Reading:

Social Network Marketing: What Works?

A recent Gallup Healthways survey of 100,000 Americans reveals what we need at work to bring us the most joy, realized through less stress and more health.

The key ingredients: autonomy, influence, and a sense of meaning.

“Supervisors are better-off than the supervised, and entrepreneurs are the best-off of all,” remarks Harvard Business School professor Rosabeth Moss Kanter.

“This suggests that exerting leadership is the surest route to joy (other than going fishing). The key is setting the agenda and starting the pieces moving towards a purpose-driven goal. If 90% of success in life is just showing up, Monster.com founder Jeff Taylor advises that when you show up, you might as well run the meeting.”

Read her post, Top 10 Ways to Find Joy at Work.

GM’s new ad touting a money-back guarantee features Chairman Edward Whitacre as the spokesman.

Ed, you’re no Lee Iacocca.

I’m sure Mr. Whitacre is a nice guy and a cracker jack executive, but on TV he comes across as the stereotypical middle-aged 69-year-old White Guy Corporate Suit.

Harvard Business School marketing expert John Quelch seems to agree that Whitacre might not be the best, ahem, vehicle for GM’s message.

“Can he connect with the average consumer, female or male? Can he champion small car design? Given the current public antipathy towards business, using the hero chairman as the company spokesperson seems out of sync with the times.”

And I’ll just add GM is trying to reposition itself as a car company for modern times. Ed seems like old times to me.

Writing on Harvard Business Publishing, Quelch runs down an interesting list of the strengths and weaknesses of the new campaign.

The Good: The ad shows that Whitacre, who was appointed by the government, is taking charge; it probably plays well to the sales force; it begins to rebuild customer trust (’Put us up against anyone’); it offers a money-back assurance to customers; and it starts rebuilding the brand umbrella.

The Bad: The money-back guarantee is full of small print; the ads don’t show the product, and, as discussed, Whitacre is not Mr. Charisma.

Read Quelch’s blog post, How GM’s Chairman Aims to Please.

I’m interested in what you think of TV ads that turn the brand over to the personality of the top exec. We’ve got plenty to work with, starting with Col. Saunders and including Dave Thomas for Wendy’s, Dieter Zetsche of Daimler Chrysler, and Orville Redenbacher of popcorn fame. More recently, Walgreen’s Gregory Wasson and Sprint Nextel’s Daniel Hesse have come in front of the camera.

When does the CEO spokesman work, and when not? Who was the best, and who was the worst? Would you want your chief executive going HDTV?

I recently posted on the subject of creative sabbaticals and moaned about how difficult it is for people other than Bill Gates to find time to get away and think about the work they are doing, or want to be doing.

I also asked readers what they do for reflection, and the responses ranged from annual personal getaways to making better use of commute time. Victor, for example, finds a little quiet time useful as he drives to work.

“I have almost completely stopped listening to audio books, lectures and the radio during my one day a week two hour commute. Gives me a lot of time to think, to enjoy to sights, sounds and smells, and to just be.”

But others of you schedule personal retreats or take regular time outs.

“I book time during my New Year break and set aside a few hours with my calendar. As I review my calendar (which was paper-based back then and is electronic now) I type out a running commentary of what I remember. I write this fairly free-flowing (no judgments) and talk about what I recall and what I feel or think about what I recall. Seen from the perspective of the present, the past year’s events take on new meaning.” –malleck

Mauramater often does her best thinking while exercising.

“I find that while walking on the treadmill, i can break through whatever creative blocks are in my head, or clean up the ‘mental mess’ in there, and all of the sudden, solutions emerge. Another thing i have started doing, is refraining from checking my email or phone messages for a half hour after the gym. rather than jumping right back into the fray, I enjoy the relaxation, and allow my brain to wander, dreaming about the big picture for my company or whatever creative problem (i’m a designer) is in front of me.”

Some other comments:

• “I have always worked retreats and dedicated quiet time into my life (while in a demanding job and a demanding volunteer leadership position and raising a family). There are trade-offs, but the sanity and centeredness that come from taking a time out benefit every aspect of my life. I’m glad Bill Gates’ example is drawing attention to this valuable non-activity! People make time for things that matter.” –aliaskate
• “I’ve started a work “book club” which I request employees to read a few selected works and schedule a time, uninterrupted to really focus on some of the challenges we are facing as a group. They understand its an opportunity to talk about frustrations and things “not quite right.” They know that “no executive decisions come from the book club.” These opportunities are times where I see the most innovation from my staff, and where I can challenge them to take personal interest in making a difference.” –pwizzy

But the most innovative suggestion came from jsacco, whose ritual involves a spreadsheet, a local diner and his wife.

“Once every six months, I schedule time for business planning and problem-solving and attack the problem on a vacation day. Usually, I can solve my issues in just a couple of hours. I wake at the same time as a work day, go through the usual routines and head off to a coffee shop instead of the office. In this environment I still get the morning hustle and bustle of the office, so it puts me in the right frame of mind. I have a defined list of long-term and short-term items to tackle that morning and I’m methodical at listing all possible solutions. I list them on a spreadsheet that I’ve templated for just such a task. Then, I take them home and discuss them with my wife — she always has great perspective from her former high-pressure career! By noon I’m done and able to enjoy the rest of that vacation day unencumbered by lingering “problems” from the office.” –jsacco

Just goes to show that if you apply the same creativity and innovation you use use at work, you can find the time you need to reflect, problem solve and, yes, relax.