Google Health: great for doctors, but the right strategy for you?
By Dr. Nicola Rowe | June 30, 2009
“You probably take for granted that you should manage your own résumé,” begins Dr. John Halamka in July’s HBR. And then he adds the kicker: “But chances are you don’t oversee your own medical records.”
It’s true. I don’t own my medical records, and nor – unless you’re a doctor, and treat yourself – do you. But I’ve long wanted to. And now Dr. Halamka tells me I can: he’s written an article (available for a fee) telling me how I can do just that.
You probably use Google every day, but you may not yet have met Google Health. On line for a year now, it’s a place you can keep your medical records together online (all of them, from your first shots to your living will), and make them available to anyone you like. It’s not Google’s first foray into health: following the motto “Predict and Prevent”, Google.org has been making significant grants to health research organizations for some time. But it’s the first time Google has connected patients with prescribers and insurers. If you live in the States, you can link to records stored at participating hospitals, pharmacies and labs. Even if you live elsewhere, you should be able to pull together your medical contacts: in a test, Google was able to find doctors I’d seen in Continental Europe and the Antipodes.
Adding your health information is easy: with a few clicks, you can tell Google Health that you have Bassen-Kornzweig syndrome – or, sticking to just the Bs, bad breath. But do you want to do this? From a physician’s point of view, it’s clearly advantageous to see a patient’s history and med mix at a glance. Another article in the HBR tells us that, increasingly, “good prescribing practices are going to hinge on the adoption of the electronic health record that will check for allergies, interactions, correct dosing, and so on”. For all the utility, though, there are dangers. Google Health, like Microsoft’s competitor offering, HealthVault, isn’t covered by the US Health Insurance Portability and Accountability Act (HIPAA), which governs the confidentiality of medical records. Even if it were, e-health can be hacked. (Currently, Google Health only requires a Gmail account password to access, so it’s frighteningly easily rumbled.) When you run for office fifteen years later, do you really want your constituents to know about the therapy you had in college to recover from your eating disorder? Do you want your insurer to know that your mother and aunt had breast cancer? Do you even want to be completely truthful, always, with your own physician?
Google Health offers you utility, and that may be a good tactic at times. But it could also be a strategic mistake.
Topics: Uncategorized | No Comments »
What Beowulf teaches us about women’s failure to keep up in the workplace
By Dr. Nicola Rowe | June 28, 2009
A couple of years ago, McKinsey & Company, a top strategy consulting firm, carried out a study into gender diversity as a performance driver. They were interested in whether adding women to executive teams would boost company performance. Like any good consultants, they began with an analysis of the current situation. And what they found was startling. Women account for 55% of university graduates in Europe, but their employment rate is 21% lower than that of men. (Unless otherwise stated, all statistics are from the McKinsey report.)
McKinsey’s analysis of graduate numbers was particularly sobering. In France, 41% of university graduates were women in 1976, but now, thirty years on when we might expect them to have taken seats in the C-suite, just 8% of them have made it. (Even progressive Sweden, which was graduating 61% women in 1976, has only 24% around the top table.) If things continue on trend, in another three decades just 11% of top executives in France will be women.
C’est la vie? McKinsey asked pourquoi, and came up with three answers: women are still pulling a second shift, reconciling responsibilities at home and in the workplace; women lack role-models at the top, a self-perpetuating problem; and, thirdly, women have not mastered what McKinsey calls “male codes” in the workplace. They are less assertive, for example, and slower to promote themselves. As supporting evidence, McKinsey cites a survey of MBA students in which 70% of female respondents rated their own performance as equal to that of their male colleagues, while fully 70% of men rated themselves higher than their co-workers.
Of these three problems, the third is the most invidious and the easiest to overlook: kudos to McK for picking it up. But it’s the hardest to attack, and perhaps the most deeply-rooted in our culture. Looking back more than a thousand years, we see Beowulf boasting to Hrothgar’s wife that he will perform heroically or die trying. Translate that Danish mead-hall to a modern club, and you can see a pack of young businessmen boasting about hitting their numbers. Yet women shy away from boasting – and from its heroic aftermath, the gloat. Is their reticence damaging their own careers?
Topics: HR, Women in business | 1 Comment »
Merry Christmas
By Dr. Nicola Rowe | December 23, 2008
Strategynut wishes you a merry Christmas. Check back for more strategic snippets this northern summer.
Topics: Uncategorized | No Comments »
Should performance reviews be abolished?
By Dr. Nicola Rowe | December 9, 2008
Recently, Strategynut looked at obtaining higher productivity from employees through forced attrition – the policy of regularly eliminating the poorest performers, no matter the actual level of their achievement. As a commentator on the post pointed out, a little acerbically, the Roman policy of decimation helped build an empire – but motivating through fear isn’t always the most effective way to go.
With that in mind, it’s worth looking at an article by Samuel Culbert in the current issue of the MITSloan Management Review. Entitled “Get Rid of the Performance Review”, it’s an attack, not on the harsher process of forced elimination (or, as the office head at a firm I once worked for put it, the “quality-based cleansing of the staff portfolio”), but on the institution of the performance review itself. Culbert levels a range of criticisms against the annual review. He points out that a performance review consists of two people talking past each other: a boss, focused on how to achieve higher output, and an employee interested in a pay raise and career advancement. An employee is unlikely to join with his or her supervisor in addressing ways to generate higher output, according to Culbert, because to do so means opening up and admitting weakness, something that can come back to bite them in the annual review. Indeed, Culbert says that attempts to address developmental issues in a performance review often come across to the employee as “gun-to-the-head intimidation requiring false acquiescence, lip-service agreement and insincere, appearance-correcting actions.”
Culbert is to be commended for making the point that performance, pay and company results are not necessarily meaningfully interlinked. Research this decade has shown no evidence of a link between CEO pay and company performance. Further down the chain, the effect of a pay rise on a mid-level executive’s performance – and the subsequent effect of that performance on company results – is even more remote. Yet this is the myth that underpins the performance review process. Culbert goes so far as to call it “immoral to maintain the facade that annual pay and performance reviews lead to corporate improvement “.
So what does Culbert propose? He doesn’t shy away from the concept of performance reviews per se; rather, he wants to ensure they align the interests of supervisor and subordinate. He suggests that boss and direct report should be viewed as a team, “jointly accountable for the quality of the work the subordinate performs”. He envisions performance “previews”, in which the team asks how the superior can best help his or her subordinate. The focus, he says, should be on asking, “Given who I am and what I’m learning about this other individual, what’s the best way for us to complement one another in getting work accomplished with excellence?”
Will it work? There’s the rub. Bosses still wield the power to fire their subordinates. Since most jurisdictions require them to have cause for doing so, a performance review will be necessary at some point in order to terminate an employee. Nonetheless, holding supervisors and their subordinates jointly to account is a great idea, even though it will take a rare company to make it work. To do so will require breaking the culture of culpability and excuse (“I couldn’t manage it – I had a poor team”) that characterises most corporations. If it can be achieved, however, it will be a boon for the workplace.
Topics: Uncategorized | 2 Comments »
Are New Zealand’s trainee scientists entrepreneurial enough?
By Dr. Nicola Rowe | December 1, 2008
“It’s not like California here,” the New Zealand venture capitalist told me. “New Zealand science students aren’t entrepreneurial – they don’t have that drive to spin their own ideas out and start their own businesses.”
The International Finance Corporation ranks New Zealand as the easiest place to start a business, five places ahead of the sixth-ranking United States. If budding New Zealand scientists aren’t entrepreneurial, it isn’t because red tape is holding them back.
It’s clear that there are fewer partnerships between universities and the private sector in New Zealand than there are in the States. The University of California system has been particularly successful in fostering cooperation: a report notes that one in three California biotechnology firms was founded by a UC scientist. New Zealand successes are identifiable – Auckland University spinoff Neuren Pharmaceuticals, for example, won NZ Bio’s 2005 Biotechnology Company of the Year award, and anti-cancer company Proacta Therapeutics, a cooperative venture between Auckland University and Stanford, has also been successful in raising funding – but they can be enumerated; in California, which has nine times New Zealand’s population, they’ve proliferated too fast to be counted.
So why are there so many entrepreneurial scientists in California? Speakers in Stanford University’s Entrepreneurial Thought Leader series have identified several factors as key: the presence of several universities, the ability for highly qualified researchers to switch between university and industry posts, industry being seen as a laudable goal rather than a second-tier slot for those who couldn’t make it in research, and, finally, a high degree of contact between industry and academia. Clearly, California wins on most of these points. Auckland and Christchurch are the only two of New Zealand’s cities to boast more than one university; of the two, only Auckland has enough industry to provide a business cluster able to support fruitful exchange with academe. Even in Auckland, it’s not easy for researchers to switch between industry and the ivory tower: there are few public-sector slots available, and those who have them tend to stay put, so it’s difficult to move back once you’ve made the move out. Where the final point is concerned, Auckland is picking up the pace: Auckland University of Technology has a tech business incubator, and Auckland University Business School’s Icehouse successfully incubates next-generation small and medium enterprises.
The venture capitalist I mentioned at the start of this post didn’t just criticise New Zealand’s entrepreneurial infrastructure. He bemoaned the lack of an entrepreneurial mindset – in his view, science students just aren’t bent on going out on their own. What do readers think? Do our trainee scientists lack entrepreneurial genes? What can be done to tickle out any entrepreneurs lurking within the lab?
Topics: Strategy | 4 Comments »
Performance management and forced attrition
By Dr. Nicola Rowe | November 26, 2008
I once worked for a firm that made a point, in its recruiting material, of stating that it only hired top performers. But the firm was able to work magical transformations on these top performers. Once through its doors, a certain percentage of them were transformed, by virtue of performance ratings along a forced curve, into underperformers. And underperformers didn’t last long: the outplacement programme (or, in the States, the coyly-named “counselling-out programme”) saw to that.
This rank-and-yank concept was made famous at General Electric under CEO Jack Welch. There, managers sorted their direct reports into three categories: a top 20%, a middle 70% and a tailing 10%. According to USA Today, the top twenty percent were to be “rewarded in the soul and wallet”; the bottom 10%, the paper says, were to be “actively weeded out”.
As Businessweek reports, academics at Drake University have found that firing the bottom 5% to 10% of performers boosts productivity by 16% - an impressive statistic. But it seems to be a short and medium-term effect, the gains reaching a 6% productivity increase in year 3 – still not to be sneezed at – and planning to 0% returns by year 10.
How does the effect work? Two hypotheses are possible. One, poor performers somehow act as a drag on corporate performance, actively destroying value while they work; two, the gains come not from eliminating poor performers per se, but from the effect that elimination has on those who remain.
Let’s look at the first hypothesis. How could poor performers actively destroy value? In organisations involving processes, where employees are highly dependent on each other to get a job done, poor performers can cause delays – imagine, for example, a conveyor-belt worker who can’t keep up with the line. More insidiously, many people believe – although actual evidence is scant – that poor employee attitude “spreads” from a poor performer to his or her adequately-performing colleagues, just as one bad apple turns the barrel.
The second hypothesis, though, is more convincing: you get more (although not necessarily the most) out of employees if they know they’re fighting for their jobs. Looking back at my own firm, what was the point of the programme? Not to get rid of poor performers, though that was the ostensible goal. Instead, I believe it was pour encourager les autres – to provide a spur to those further up the curve. Because, no matter how good you were, you could always hear the jaws of the outplacement programme snapping at your heels.
Topics: HR | 3 Comments »
Assessing corporate governance with the 7S-1T model
By Dr. Nicola Rowe | November 17, 2008
Need to quickly assess the governance structures in place in a company or association? One successful model you can use is the 1T-7S framework, which enables you to quickly check for potential areas of concern.
The areas covered by the model are:
- Steering
- Strategy
- Structure
- Skills
- Systems
- Succession
- Stakeholders
- Teamwork
Steering is about the organisation knowing where it’s going. Does it have a clearly-defined mission? Does everyone understand the mission, and do they know what it means in practice?
If steering is about the mission, strategy is about the roadmap. Does the company have a long-range plan? Do the board and top team spend enough time looking at future challenges?
Structure is about just that – how the board and its committees are set up. Is the board the right size? Are the committees appropriate?
Next, you want to ensure that everyone on the board brings the right mix of skills and knowledge to the table, that they receive the training they need for their positions and that nothing inhibits them from translating those skills into practice. (A question like “All of my fellow board members pull their weight” can be a helpful way to worm out any issues here.)
The board’s systems need to function. These range from the seemingly mundane – are materials distributed far enough in advance of meetings? – to more abstract questions about the strength of, for example, the board’s decision-making processes.
Succession planning is about ensuring there’s always a pool of candidates for free slots – not just for board members, but for the CEO position. As noted here in an earlier post, boards are poor at picking CEO candidates. But they’ve got to plan for selection.
Next, the board’s relationships with its stakeholders need to be assessed. You’ll want a series of questions directed at the various stakeholders, both internal and external, that are relevant to the firm you’re investigating.
Finally, you’ll need to look at the T – teamwork, asking how it all pulls together. Do members of the board communicate well? Asking them whether they consider the board to be a top-performing team can be revealing.
How should you use this diagnostic? While you can cover the ground with the board in a plenum session, it’s often more helpful to cover the ground in advance. Use an Internet tool like Surveymonkey to ask board members, anonymously, in advance of your meeting.
Happy diagnostics!
Topics: Consulting, Corporate governance, Strategy | 2 Comments »
The Smart car - a brand too far
By Dr. Nicola Rowe | November 13, 2008
It looks like a liquorice allsort on wheels, like what might happen if Swatch and Mercedes got together to make a car – which is, of course, exactly how the Smart got started. When the pint-sized car revved up its engines for European market entry in 1997, it turned heads, both in the street and in the press gallery. Eleven years later, the Smart has become an iconic brand, instantly identifiable and fun to drive. True-black Mercedes drivers may find it hard to take the Smart seriously as a car, but even the most mechanically-minded motor magazine has to take it seriously as a brand.
Yet, while the Smart has always been a steady seller, it spent the decade since its 1997 release in the red. Daimler doesn’t hang on sentimentally to brands, as its quick divestiture of Chrysler’s marques shows. But Daimler is dedicated to the Smart: it introduced the car to the United States in January of this year, and will be taking it to Brazil and China next year, bringing the number of countries with Smart dealerships to 38.
So why has Daimler gone the distance with Smart despite a decade of losses? Clearly, the company believes in the market for two-person cars (it cancelled production of a four-person car when sales proved disappointing). But the decision to persist – and persist, and persist – is difficult to explain on purely business grounds. With some understatement, Daimler CEO Dieter Zetsche has admitted that the car was ahead of its time. Was it a responsible use of shareholders’ money for Daimler to continue to invest in the Smart during ten consecutive years in the red? It’s difficult to see how. The Smart may have made it into the black in 2007, its eleventh year in production, but it will have to do more than just bring home the bacon if it’s to pay back a decade of investment. Even 2007’s numbers aren’t encouraging: Daimler sold 103,000 units last year - not a negligible amount, but it sold two and three-quarters times as many units from its A and B small-car series. Unless world numbers trend sharply upwards, it seems unlikely that the Smart will ever repay its launch costs.
Any marketer will tell you that a brand is a promise, that it tantalises consumers with the prospect of obtaining benefits they hanker after. But, looking at the Smart’s balance sheets for the years 1997-2006, you can’t help feeling that those in love with the brand weren’t primarily the consumers at all, but those who made the product. Tantalised by the thought of profits, they hung on unreasonably long to their own iconic brand.
Topics: Branding | No Comments »
Note to employers: hire optimists
By Dr. Nicola Rowe | November 12, 2008
Having Pollyanna in the next cubicle would get on the best-intentioned employee’s nerves after a while. But it makes sense for the boss to have hired her: according to psychologist and author Martin Seligman, optimists make better employees than their pessimist colleagues.
So what makes an optimist? It’s all about attribution – about what you think the causes of the things that happen to you are. For Seligman, optimists believe that the cause of good things - a promotion, or a good grade on a test – lie within their own sphere of influence. So an optimist will say “I got a good grade because I studied hard.” A pessimist will see things exactly the other way around, attributing good things to causes outside his or her control. “The test was easy,” a pessimist might say. Or: “I fluked”.
When it comes to negative events, things reverse. Optimists attribute negative events to causes outside their control, whereas pessimists see themselves at fault. “I failed the test because I’m stupid,” a pessimist might say.
It’s an interesting theory, but why is it important? Optimists are resilient, and that’s important in business. They make better salespeople – not because their dispositions are sunnier, but because they bounce back from rejection more quickly than pessimists. Optimists don’t become discouraged, and they don’t quit. Seligman even went beyond the private sector, testing his theory with the US armed forces. He verified empirically that pessimists are more likely to drop out of basic training than optimists. The implication for business? If you screen candidates with an assessment centre, add a test for optimism to the battery of tests you already conduct.
While industrial psychologists have co-opted his results, Seligman himself is a clinical psychologist. If you want to know whether you’re an optimist or a pessimist, you can test yourself at the website set up by Penn U’s Positive Psychology Center. Turn out a pessimist? Not to worry. As the title of Seligman’s seminal book Learned Optimism implies, optimism is a world-view that can be learned. If you want to increase your resilience and learn to see the world more positively, the book provides you with a roadmap. To learn more, read Professionnelle’s excellent summary and book review.
Topics: HR | 1 Comment »
The Rule of 3 and 4
By Dr. Nicola Rowe | November 10, 2008
Auto makers? Chrysler, GM and Ford. Airlines? United, American and Delta.
As formulated by The Boston Consulting Group’s founder Bruce Henderson in 1976, the Rule of Three and Four says that no stable industry will have more than three significant competitors, the largest of which has no more than four times the market share of the smallest. If we look to Mr. Henderson’s own industry, strategy consulting, we see McKinsey, BCG and Bain holding down the competition in the States, while, glancing overseas, McK, BCG and Roland Berger make up the trinity in Germany.
The existence of the rule was deducted empirically, and was verified again recently by Professors Jagdish Sheth and Rajendra Sisodia, who found that 70%-90% of market volume could be explained in this way.
So why does it work? Henderson and his colleagues thought that there were two reasons. One, they observed an equilibrium point of 2:1 at which it was “neither practical nor advantageous” for competitors to increase or decrease share – in other words, once competitor A has twice as much market share as Competitor B, it costs more than it is worth for A to try to throttle B back, or for B to extend share. But why doesn’t market share regress infinitely – why stop at three major competitors? Here, the BCG authors deduced that a competitor with less than a quarter of the largest competitor’s share could not compete effectively – the cost of establishing itself would be too great.
Henderson sounds as though he may have been a little uncomfortable with his own results. “The Rule of Three and Four is a hypothesis,” he wrote, rather defensively. “It is not subject to rigorous proof. It does seem to match well observable facts in fields as diverse as steam turbines, automobiles, baby food, soft drinks and airplanes.”
But the Rule is more than just a neat observation: it has practical application. First, it allows us to predict shakeouts in a growth market. We know that all markets converge towards stability, and the Rule tells us that a stable market is a consolidated market. Observing the rate at which market share consolidates enables us to draw conclusions about the rate of market stabilization.
Secondly, the Rule highlights the importance of market share. As BCG has said more recently, a firm should “never, never lose share”. While a market is in a growth phase, its participants are engaged in a double struggle for growth: they must grow as fast as they can, but they must also do so at the expense of each other. There is never enough to go around. Even in a rapidly-growing market, the race is still for share. To increase market share in a growing market, a company will have to grow faster than the market itself is growing.
Topics: Strategy | No Comments »
