January–February 2015

Intuit’s CEO on Building a Design-Driven Company

Although 46 similar products were on the market when Intuit launched Quicken, in 1983, it immediately became the market leader in personal finance software and has held that position for three decades. That’s because Quicken was so well designed that using it is intuitive.

But by the time Smith became CEO, in 2008, the company had become overly focused on adding incremental features that delivered ease of use but not delight. What was missing was an emotional connection with customers. He and his team set out to integrate design thinking into every part of Intuit. They changed the layout of the office, reduced the number of cubes, and added more collaboration spaces and places for impromptu work. They increased the number of designers by nearly 600% and now hold quarterly design conferences. They bring in people who have created exceptionally designed products, such as the Nest thermostat and the Kayak travel website, to share insights with Intuit employees. The company acquired one start-up, called Mint, and collaborates with another, called ZenPayroll, to improve customer experience.

Although most people don’t think of financial software as a category driven by emotion or design, Smith writes, Intuit’s D4D (“design for delight”) program has paid off. For example, its SnapTax app, inspired by consumers’ migration to smartphones, led one user to write, “I want this app to have my babies.”

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The Truth About CSR

Despite the widely accepted ideal of “shared value,” research led by Harvard Business School’s Kasturi Rangan suggests that this is not the norm—and that’s OK. Most companies practice a multifaceted version of CSR that spans theaters ranging from pure philanthropy to environmental sustainability to the explicitly strategic. To maximize their impact, companies must ensure that initiatives in the various theaters form a unified platform. Four steps can help them do so:

Pruning and aligning programs within theaters.

Companies must examine their existing programs in each theater, reducing or eliminating those that do not address an important social or environmental problem in keeping with the firm’s business purpose and values.

Developing metrics to gauge performance.

Just as the goals of programs vary from theater to theater, so do the definitions of success.

Coordinating programs across theaters.

This does not mean that all initiatives necessarily address the same problem; it means that they are mutually reinforcing and form a cogent whole.

Developing an interdisciplinary CSR strategy.

The range of purposes underlying initiatives in different theaters and the variation in how those initiatives are managed pose major barriers for many firms. Strategy development can be top down or bottom up, but ongoing communication is key.

These practices have helped companies including PNC Bank, IKEA, and Ambuja Cements bring discipline and coherence to their CSR portfolios.

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The Authenticity Paradox

Authenticity has become the gold standard for leadership. But as INSEAD professor Herminia Ibarra argues, a simplistic understanding of what authenticity means can limit leaders’ growth and impact.

All too often, we tend to latch on to authenticity as an excuse for sticking with what’s comfortable. But few jobs allow us to do that for long. In this article, Ibarra explains how leaders can develop an “adaptively authentic” style by experimenting with many different leadership approaches. It’s OK to change tactics from one day to the next, she says. That’s not being fake; it’s how we figure out what’s right for the challenges and circumstances we face.

Three strategies can help you break free from a self-concept that’s too rigid:

Learn from diverse role models.

Growth necessarily involves some form of imitation, but don’t copy just one person’s leadership style. Borrow selectively from various people to create your own collage.

Work on getting better.

Set learning goals—not just performance targets—to focus on the value of experimentation. Stretch the limits of who you are by doing new things that make you uncomfortable but help you discover by direct experience whom you want to become.

Don’t stick to “your story.”

Jettison outdated self-concepts and draw on personal narratives that fit your circumstances as you’re taking on new challenges.

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The Art of Giving and Receiving Advice

Seeking and giving advice are central to effective leadership and decision making, and they require emotional intelligence, self-awareness, restraint, diplomacy, and patience on both sides. But managers tend to view these competencies as “gifts” that one either has or lacks. The authors argue instead that they are practical skills you can learn and apply to great effect. They draw on a large body of research to identify the most common obstacles to effectively seeking and giving advice—such as thinking one already has the answers, defining the problem poorly, and overstepping boundaries—and offer practical guidelines for getting past them.

The authors define the five stages of advising: (1) finding the right fit; (2) developing a shared understanding; (3) crafting alternatives; (4) converging on a decision; and (5) putting advice into action. Each stage includes suggestions for seekers and for advisers. Example: At stage 4, when it’s time to narrow down the options, a seeker might review discarded or briefly considered ideas, and his adviser might play devil’s advocate—to check for confirmation bias.

Overall, the authors’ guidelines amount to a fundamental shift in approach: a creative, collaborative way of understanding problems and crafting promising paths forward—which often requires an ongoing conversation.

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Get the Boss to Buy In

For organizations to prosper, managers in the middle ranks must feel empowered to identify and promote the need for change. People at this level gather valuable intelligence from direct contact with customers, suppliers, and colleagues; they can often see when the market is ripe for a certain offering, for instance, or spot signs that a partnership won’t work. But for many reasons, ranging from a fear of negative consequences to compliance with a top-down culture, they may not voice their ideas and concerns—and even when they do, they often struggle to persuade the people at the top.

The authors studied “issue selling” in a range of organizations, roles, and industries, identifying seven tactics associated with success. Managers should tailor their pitch to the goals, values, and knowledge of decision makers; frame the issue to show how it supports a strategic goal; manage emotions (their own and their audience’s); get the timing right by, say, attending to a boss’s preoccupations or watching larger trends; involve others, both in and out of their networks; adhere to organizational norms, such as how leaders prefer to receive information; and suggest solutions,or at least propose ways to find one.

Issue selling is an ongoing process that requires groundwork and patience. Midlevel managers who do it effectively get decision makers’ attention and make a real difference in their organizations.

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Managing Your Mission-Critical Knowledge

Big data is proving difficult to translate into useful knowledge, the authors write. That’s in part because a company’s knowledge assets involve so much more: core competencies, areas of expertise, intellectual property, and deep pools of talent.

Large-scale, sustainable growth is generally made possible when people take insights from one knowledge domain and apply them in another—when deep technical expertise in one business unit is applied in a different business unit, for example, or when a best-in-class marketing group pulls a product development unit into the 21st century by sharing market insights gleaned from customer data.

The authors describe how to map your organization’s strategic knowledge and identify where it can help you create value and growth. When knowledge assets are placed in a grid along two dimensions—unstructured (tacit) versus structured (explicit) and undiffused (restricted) versus diffused (shared)—it becomes easier to manage them for future competitive advantage.

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Why Your Customers’ Social Identities Matter

People are highly social animals. Most of us belong to many social groups, each with its own identity. These identities guide our actions, but they shift from moment to moment. That has important implications for marketers: Someone who, say, encounters a brand of cologne will have one response to it when he sees himself as a dutiful son and another when he sees himself as an available single man.

For five years the authors have been studying how social identity affects customer behavior in a wide range of industries. They have seen that companies can trigger more-favorable reactions in customers by subtly influencing which identities they tap into. This is something firms should take into account when doing market research or designing experiences.

The first step is to focus on the customer’s social self and surface the range of his possible identities. If a customer’s identity encourages targeted behaviors, marketers can help reinforce it. If an offering clashes with the customer’s chosen identity, however, a company can reframe product messages. Marketers can also work to add a desired behavior to those that customers associate with an identity, prime different identities in customers, and even create new identities that deepen relationships with existing customers and attract new ones.

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Where Boards Fall Short

Though it’s been over a decade since the first wave of post-Enron governance reforms, boards are still failing to provide strong oversight and strategic support for management’s efforts to create long-term value. Consider these damning results from a recent McKinsey survey: A mere 34% of directors believe that the boards they serve on fully comprehend their companies’ strategies, and just 16% think that their boards have a strong understanding of the dynamics of their firms’ industries. Another survey asked directors and C-suite executives where the greatest pressure to deliver short-term results came from. The most frequent response? Boards.

In this article the global managing director of McKinsey and the CEO of the Canada Pension Plan Investment Board propose measures to strengthen boards and encourage their members to focus more on long-term opportunities and strategy. Companies can start by recruiting independent thinkers and people with the right expertise as directors, fostering high-quality strategic conversations, and instituting key nonfinancial metrics. Engaging deeply with major long-term shareholders, especially about growth strategies, would also alleviate a lot of the pressure to maximize short-term results. And board compensation needs to be rethought: Directors should be paid more (but serve on fewer boards), and the mix of rewards should be retooled to emphasize long-term performance.

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A Second Chance to Make the Right Impression

All too often, when we think we’re projecting a certain image to others, they perceive us very differently. This happens in part because people tend to make judgments unconsciously and automatically, influenced by various biases. But research from social psychologists can help us understand the flaws in human perception and make sure we’re judged fairly.

According to the author, someone meeting you for the first time—or reassessing you later—is likely to be viewing you through various lenses: the trust lens, to decide if you are friend or foe; the power lens, to assess your usefulness; and the ego lens, to confirm a sense of superiority.

Halvorson suggests specific ways you can use this information to put your best foot forward. To be trusted, project warmth and competence. To appeal to someone more powerful, demonstrate your instrumentality in reaching his or her goals. And to be seen positively through another person’s ego lens, be modest and inclusive.

If you need to overcome a bad impression, you can complement these strategies with others that will make people want to revise their opinions of you.

By thinking strategically about how we all form our impressions, you’ll find it much easier to come across as you intend and be seen in a favorable light.

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