The View from Harvard Business

Earlier this decade, production studios and music labels didn’t much want to hear what Harvard Business School professor Felix Oberholzer-Gee had to tell them. While the entertainment companies claimed that unauthorized file-sharing was robbing them and their clients of income, Oberholzer-Gee’s research showed little relationship between piracy and CD sales.

Now Obherholzer-Gee and collaborator Koleman Strumpf return with new research to challenge another shibboleth: Copyright protection motivates artists to create, and lack of it dissuades them.

In fact, looking at recent history, there is no proof artists are creating any less even though digital technology has weakened copyright protection. As the authors note, millions of people this decade have downloaded or shared billions of copyrighted books, movies, and songs, for which the creators were not compensated.

The result?

• From 2002 to 2007 publication of new books increased 66 percent.
• Since 2000 the annual release of new albums has more than doubled.
• Since 2003 worldwide feature film production since 2003 is up by more than 30 percent.

Apparently, weakened copyright has benefited society, Obherholzer-Gee and Strumpf argue in a recent working paper, File-sharing and Copyright.

Why has file-sharing not dented the motivation of artists? The researchers provide three possibilities.

1. Cannibalization of sales due to file sharing has been overstated.
2. File sharing increases demand for complements to protected works such as concerts, raising prices and adding to artists’ incomes.
3. Monetary incentives play a reduced role in motivating authors to remain creative.

“The policy discussion surrounding file sharing has largely focused on the legality of the new technology and the question of whether or not declining sales in music are due to file sharing. While these are important questions, the debate has been overly narrow,” the researchers conclude. “Copyright exists to encourage innovation and the creation of new works; in other words, to promote social welfare. The question to ask is whether the new technology has undermined the incentives to create, market, and distribute entertainment.”

(Tape recorder photo by Jen SFO-BCN, CC 2.0)

Is America headed for a great depression similar to what began in 1929? Or has it already begun to put the recession in its rear view mirror and is to soon resume its roll as global policeman?

For Niall Ferguson, one is the worst-case scenario, the other the best case.  And that presents a real challenge for business leaders trying to predict how the world will look just four years from today. In 2013 will the economy be contracting or expanding? Will the top income tax rate be 45 percent or 35 percent? Will the S&P 500 be jetting at 976 or slumming at 418? Will the president be Barack Obama or Jeb Bush?

Maddeningly Ferguson, the controversial Harvard historian and economist, doesn’t offer his own opinion in his Harvard Business Review article The Descent of Finance. But he convincingly plays out scenarios that lead to both results, so you can go along for the ride and see which seem more plausible to your way of thinking. (Judging from earlier writings,  Ferguson seems to side with the more pessimistic view, believing  that the Western world’s over-reliance on debt won’t be solved by writing more debt.)

Oh, and what’s that bit about the United States again becoming the world’s policeman? Ferguson suggests that as bad as the econ crisis is in America, other countries are suffering more. Economic instability leads to political unrest. The world’s hot spots will continue to get hotter. “If the financial crisis turns up the heat in old hot spots and creates new ones at either end of Eurasia, the world may spend the next eight years wishing for more, not fewer, U.S. interventions,” Ferguson offers.

Look ahead to 2013. As a business strategist, what does the world look like to you and how does your business respond?

Harvard Business School professor Laura Morgan Roberts‘ article Creating a Positive Professional Image is one of the most popular ever run on HBS Working Knowledge.

Her theme: If you don’t actively manage your professional image, others will do it for you. Create your own identity. Take a strategic, proactive approach to managing how others perceive you.

This was written in 2005, just before social networking started to take hold. Today, with so many “yous” spread out over social and professional networks, this advice this is more important than ever.

What is a professional image? Roberts defines it as a set of qualities and characteristics that represent perceptions of your competence and character as perceived by your key constituents — colleagues, clients, superiors, subordinates.

Managing your image successfully means completing two objectives: build credibility and maintain authenticity. “When you present yourself in a manner that is both true to self and valued and believed by others,” she says, “impression management can yield a host of favorable outcomes for you, your team, and your organization.”

Here are several takeaways from the piece to keep in mind. Please read the entire interview for a more in-depth look at the topic.

Identify your ideal state.

• What are the core competencies and character traits you want people to associate with you?
• Which of your social identities do you want to emphasize and incorporate into your workplace interactions, and which would you rather minimize?

Assess your current image, culture, and audience.

• What are the expectations for professionalism?
• How do others currently perceive you?

Conduct a cost-benefit analysis for image change.

• Do you care about others’ perceptions of you?
• Are you capable of changing your image?
• Are the benefits worth the costs? (Cognitive, psychological, emotional, physical effort)

Use strategic self-presentation to manage impressions and change your image.

• Employ appropriate traditional and social identity-based impression management strategies.
• Pay attention to the balancing act—build credibility while maintaining authenticity

Manage the effort you invest in the process.

• Monitor others’ perceptions of you
• Monitor your own behavior
• Use strategic self-disclosure
• Have a preoccupation with proving worth and legitimacy

What about you? Do you actively manage your own professional identity? How do you want others to think about you as a manager?

Harvard Business School professor emeritus Michael Beer identifies three characteristics of high performance managers in a short video on BigThink.com.

Effective leaders:

1. Engage their organizations in a learning process and connect authentically with people.
2. Have the will to change and transform the organization with a clear vision of what must be done.
3. Solicit and accept feedback on the barriers to change and to get a sense of the character of the organization as a whole.

What strikes me about this list is the concept of leader as teacher/coach/coordinator rather than leader as doer.

Do you agree with Beer’s essential leadership characteristics?

A speech is only so many pretty words until you drive home the message in a way that connects with the audience. That’s why you need to pay more attention to how you use explanation to describe benefits, challenges, and to set expectations.

Communications expert John Baldoni hits on the power of explanation in a recent blog post on Harvard Business Publishing, where he notes that President Obama has shifted rhetorical gears to become less lofty and more concrete through the deft use of explanation. Says Baldoni:

“Explanation is a key attribute of leadership communications. Leaders know to inject their communications with verve and enthusiasm as a means of persuasion, but they also need to include an explanation for the excitement. What does it mean and why are we doing it are critical questions that every leader must answer with straightforward explanations.”

Write that down for your next presentation: “What does it mean and why are we doing it.”

Baldoni offers three ways to become an effective explainer:

1. Define what it is.
2. Define what it isn’t.
3. Define what you want people to do.

But a great explainer don’t merely cite a laundry list of benefits. Too much detail can put an audience to sleep, but too few details won’t be convincing. Here is how Obama explained in an interview the importance of using taxpayer funds to assist GM and Chrysler.

“Our auto industry is the foundation for economies all across the Midwest and ultimately, for the country as a whole. And had we allowed GM or Chrysler simply to liquidate, that would have been a huge anti-stimulus on the economy as a whole, and could have dragged us even deeper into recession or even depression.”

Agree with it or not, the explanation is a reasonable and easy-to-comprehend rationale for government intervention in the auto industry.

Want to create your own personal brand? Harvard Business School marketing expert John Quelch looks to Michael Jackson, who unarguably became one of the most recognized personal icons over the last 25 years.

Despite living a life many found bizzare, Jackson’s death drew mourning and tributes around the globe. Clearly, people were drawn to his story for more than just the music.

Quelch lists 10 reasons why. Here are three:

1. Be visible. “All memorable brands have their unique visual trademarks. Jackson understood brand image and how to build it with his fans. The moonwalk that we could all try to imitate. The glove. The uniform. Neverland.”
2. Go global. “Jackson’s music and videos easily transcended national boundaries, as well as race, age and gender. “We Are the World”, written by Jackson and Lionel Ritchie in 1985, cemented his global appeal. Jackson sold almost half his 750 million titles outside the United States.”
3. Be vulnerable. “We cannot relate to icons without imperfections. Jackson was quirky, eccentric, mysterious. For all his wealth and professional excellence, he was - perhaps understandably - flawed, misguided, and sad, but none would say unkind.”

Read the complete list on Quelch’s post How Michael Jackson Became a Brand Icon.

Even in this age of easy video conferencing, nothing beats face-to-face business meetings to build relationships, break down cultural barriers and, of course, celebrate a new deal.

But new research from Harvard Business School and MIT surfaces another, much under appreciated benefit.  Like the first astronauts on the moon gazing back at the fragile blue ball of earth, executives abroad benefit by seeing the home office from an outsider’s perspective. According to the working paper, written Tsedal Beyene of HBS and Mark Mortensen of the MIT Sloan School of Management:

“Visiting people at their locales and gaining awareness of their point of view help you understand how you and your operations are perceived — what we call ‘reflected knowledge.’ In other words, you develop knowledge about you through the eyes of the other. This knowledge helps you adapt your own work processes and behaviors, which in turn, fosters mutual trust and reduces work misunderstandings.”

For example, many respondents in the research explained that visiting other sites opened their eyes to what was often “an unpleasant reality, that requests from their home site were sometimes frustrating to colleagues abroad.”

Execs from HQ can use this opportunity to stress that branch offices are part of the global team with one common goal, even as different possibilities and opportunities are explored in each country.

Read the full paper Firsthand Experience and the Subsequent Role of Reflected Knowledge in Cultivating Trust in Global Collaboration.

Robert Kaplan and David Norton, creators of the “Balanced Scorecard” corporate measurement system, have been dubbed official  management gurus by economist.com.

“The two men started with the premise that what you measure is what you get,” according to the publication. “Measure financial results and you get financial results. Measure things like innovation and customer satisfaction and you will get those too.”

Kaplan is a professor at Harvard Business School, Norton a consultant and founder of Renaissance Solutions.

Kaplan joins other HBS faculty on the Guru list including Michael Porter, Rosabeth Moss Kanter, and Ted Levitt.

I once worked with Jim, a business analyst who, like many of that breed, could make Excel sing like Pavarotti. One day his supervisor, Mike,  ran across Jim building an Excel template to track stats in a fantasy baseball league.

Instead of disciplining Jim for violating company time, Mike saw Jim in a new light — as someone who could create  spreadsheet-based forms for any number of business tasks. As it turned out, Jim’ spreadsheet virtuosity, utilized in a new way, saved the company significant coin it was paying to an outside vendor to design such forms, and gave Jim a fun new role in the company.

Guess what. You have employees with hidden talents that, if you only knew they existed, could help your business. As Steven DeMaio blogs on Harvard Business Publishing:

“Good managers know what their individual employees like to do (what tasks they enjoy, which projects motivate them). Great managers find out why someone has those preferences.”

What a splendid observation. It’s so easy to pair up a staffer with a task because she has always done that work in the past. But knowing what motivates someone helps you find better strategic fits between employee and the work to be done.

DeMaio gives this example:

“Rosa might have enjoyed that customer-feedback project not because she likes working with surveys but because she has a strong affinity for the product that was being evaluated. Her next assignment should be related to that product, not a survey on a different product.”

Read DeMaios post How to Identify Your Employees’ Hidden Talents. In addition to “ask for the reasons behind people’s preferences,” he advises:

• Turn a compliment into an interview.
• Analyze how people think, not just what they do.
• Inquire about people’s dreams.

Have you discovered unexpected talents in your people? Can you recommend ways for all of us to better unearth those qualities in our colleagues?

Apple’s chief executive Steve Jobs has created wonderful products and a great company. But Bill Taylor says don’t emulate his management style.

“Jobs, for all of his virtues, clings to the Great Man Theory of Leadership — a CEO-centric model of executive power that is outmoded, unsustainable, and, for most of us mere mortals, ineffective in a world of non-stop change.”

Those words come from Taylor’s blog post on Harvard Business Publishing Decoding Steve Jobs: Trust the Art, Not the Artist, writing.

Instead, practice the art of “humbition,” Taylor says. That would be a subtle blend of humility and ambition “that drives the most successful leaders — an antidote to the know-it-all hubris that affects so many executives and entrepreneurs.”

The Good Steve

I think Steve Jobs is a leader to emulate — at least in part. In the end, of course, you should manage in a style that reflects your personality, your values, your attitudes — what Harvard Business School professor Bill George calls “authentic leadership.”  If you don’t have an ounce of humility in your bones, pity you — but don’t waste time faking it.

Jobs is an authentic leader — authentic to his own beliefs and way of doing things. And while he can be supersecretive, tyrannical and volcanic in his management style, those that thrive under him say they have done their best work at Apple.

Here are three things to learn from how Jobs goes about his business:

1. Trust Your Gut. He knows what he is about and is absolutely devoted to core principles. Most company analysts and retail experts thought the company was crazy to open its own stores — Gateway, Dell, and Sony failed at similar efforts.  Jobs believed in the concept and now Apple Stores are a key driver of the company’s success.
2. Details Are Everything. Jobs understands that creating a great customer experience means getting the details right. It’s not just about designing the perfect texture for an iPod touch screen, but also controlling the customer’s experience with a product even before they open the box. It’s even about what materials to use in a staircase at Apple’s store in New York City. He sweats the details, and makes his employees sweat them, too.
3. Passion Creates Passion. Leaders always want people around them who are passionate about their work. But if the CEO is just mailing it in, so will the everyone else. Jobs demands passion and performance from his employees. That ethos is a magnet for top talent — the best people want to work for organizations committed to excellence.

Trust your gut, attention to detail, passion. These are three ingredients any 21st century leader should command, and Apple’s CEO is a great example of why. Learn from him.

Steve Jobs is on the phone. “Would you like to come work for me at Apple?” he asks. What’s your answer?

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