Adopting innovation to market brand Obama

This isn't a partisan essay. At least it isn't intended to be any more partisan than were, say, our essays about Pixar. Like everything we discuss, our purpose here is to shine a light on important trends in managing talent and employing social networks.

That effort at careful bi-partisan positioning taken care of, we should be free to say: Barack Obama's campaign should be used as a case study in classrooms across the country. The Obama campaign made unprecedented use of social network sites and used existing web tools in exceptionally saavy ways to understand his supporters and shape and position messages to influence them. They employed some of the best talent in the field - including Joe Rospars, who managed Howard Dean's internet presence in 2004, and Chris Hughes, one of the co-founders of Facebook - and gave them the support and latitude to accomplish what they were brought in to do. There was an impressive degree of integration across the different dimensions of the campaign. When television ads were launched in battleground states, they were also posted on YouTube and displayed on the campaign's Facebook page, where they were picked up by Obama's 2.8 million Facebook friends and shared with others. Any gaffe by John McCain, Obama's Republican opponent, was similarly broadcast across the wide internet landscape, which the campaign understood better than their rival did.

The Obama campaign understood that "people influence people." Every time a new supporter signed up to be one of Obama's Facebook friends, that supporter's new affiliation was automatically broadcast to all of his or her Facebook friends. On average, each Facebook user has 150 "friends" plugged into his or her network, some have as many as 600, a few have many more. Of course, many of these "friends" already share political leanings, and many may also be part of Obama's Facebook community. Still, doing the math, we're talking about a potential social network of 420 million people - greater than the entire population of the U.S.

Many of these supporters also set up their own accounts on My.BarackObama.com, where they could blog about their own campaigning and canvassing efforts, post photos, and set up their own fundraising pages with their own messages. As people registered on My.BarackObama.com or on the campaign's more conventional website http://www.barackobama.com/ (which was, functionally, just a different portal into the same content), the campaign gathered information about them. Some of this information was volunteered - name, address, email, cell number - but the campaign also deposited a cookie on each vistor's web browser, allowing the campaign to track where that supporter went after he or she left the site. This helped the campaign know where the supporter was getting his or her news and entertainment, helping to craft advertising plans.

Ultimately, every registered supporter was recruited, by carefully targeted emails, to donate, or volunteer at phone banks, or contribute to canvassing and get out the vote efforts. When volunteers showed up at campaign headquarters, they were given lists that were made more precise by the campaign's capability to gather information from its web-based resources. All of these campaign offices, set up across the country, even in states Democrats often skipped, were financed by the unrivalled web-based fund-raising accomplished by the campaign. Some estimates suggest the campaign raised somewhere in the neighborhood of $700 million dollars.

In the end, of course, Obama won the race and, in the process captured 7.7 million of the 11.7 million voters under 29 who cast a ballot. The number of voters under 29 was greater than the number of senior citizens who voted. It will take some time to fully understand the numbers, and grasp what motivated voters and which messages caught their attention. But there seems broad consenus that Obama's bet on younger voters paid off, and his use of the web and the power of social networking sites generated armies of volunteers and helped generate unimaginable financial support.

After this breathless rush through the campaign's accomplishments, let's pause to connect all of this to what we normally talk about here. Obama's campaign had the insight to see the web as a campaign tool with impressive reach, and, more so than any political campaign before, they grasped the utility of social networking sites to connect with people (and connect people to people). They brought in the talent to give shape and form to their ambitions. Furthermore - and this is a powerful lesson for workplaces - they trusted millions of supporters to do a great deal of the work, downloading videos and passing them around, creating their own content and sharing it. This might seem like a risky move for a campaign so focused on communicating a carefully scripted message - emphasizing the candidate's commitment to change, while backgrounding discussions of race - but the campaign was counting on a preexisting set of practices it understood very well. Or rather, that Chris Hughes knew well. From his work on Facebook, Hughes knew that most supporters would share videos and other content crafted by the campaign. What the campaign counted on was that their message would be passed hand-to-hand, shared among "friends."

We have emphasized the importance of trust in workplaces. The Obama campaign was confronted with a workplace extending across the full landscape of the United States, and had to deploy "workers" who were unpaid and had no formal position within the organization. Yet, for their model to work, they needed to trust these supporters to broadcast their message and carry out the groundwork necessary to get out the vote. If trust is possible in this context, why do so many employers fail to trust their workers in more conventional workplaces?

The Aims of Education and the Aims of Industry

Every year, to begin the academic calendar, the University of Chicago invites new students to attend the Aims of Education address. A well-loved, accomplished faculty member is invited to give a talk, and is given no guidance on its content or themes. He or she is only told: We are inviting you to talk about the aims of education.

The talk takes its name from a speech (and later an essay) by Alfred North Whitehead. Why should we bring it up here? In fact, wiser heads - those with more practical opinions - might wave us off the topic. We are often told, mostly by the consultants who help manage our marketing and advise us on our "branding", that the University of Chicago is viewed as being too cerebral, overly theoretical. Dragging a British mathematician and philospher into our discussion of a reading about how Pixar manages talent can't possibly help change this belief.

But give us a few minutes. This is all about managing talent, and we will map out the connections.

One of Whitehead's more provocative claims in his address, originally given in 1916 to a roomful of fellow mathematicians, was this:

In the history of education, the most striking phenomenon is that schools of learning, which at one epoch are alive with a ferment of genius, in a succeeding generation exhibit merely pedantry and routine. The reason is, that they are overladen with inert ideas. Education with inert ideas is not only useless: it is, above all things, harmful.

To set this in a context, 1916 was in the middle of the First World War, a period in world history viewed by many as the moment when old ideas (about political life, social class, and the organization of the economy) where discarded and new approaches became accepted. One new realization that remains with us: after the War, and throughout the twentieth-century, we became more aware of the inevitability and persistence of change. We live in flux, and all of our activities, including business, need to be engineered so new ideas, new opportunities, and new technologies can take root.

It is clear, as we begin the twenty-first-century, that we can't afford to forget this lesson. Workplaces that are overly routinized or "inert", to use Whitehead's word, will in time become dreary, stagnant places. What is true about schools, is true about workplaces: to succeed they need to keep alive "the ferment of genius."

The brilliance - and success - of Pixar's management culture is that they recognize that genius is a product of organizational design. You need smart, talented people, but you also need to create processes - in Pixar's case, their incubation teams - where good ideas can be improved on, and benefit from the insights other talented people can provide. You also need an organizational culture that stresses trust and respect and mutual responsibility. Where employees can't trust one another, no one takes risks, and everyone falls back on routines and conventional practices. A workplace like that can't "ferment genius" and can't consistently promote creativity.

The one meaningful failure: failure to work well with others

Digging deeper into the reading we began discussing in our last entry, Ed Catmull's account of building an environment to foster creativity at Pixar, we were inspired to ask some questions not taken on in the very useful essay. To start with: in a workplace where bad ideas and missteps are brushed aside, rather than a cause for punishment, what is the defintition of failure? And when would someone be terminated?

Reading between the lines, it seems clear that the one unforgiveable failure at Pixar is the inability to work with others. Whether it is because someone is slow to learn the workplace's culture, or she lacks the necessary social intelligence to participate in the give and take that characterizes a collaborative workplace, someone who continues to throw blame, or ridicule others' ideas, or seeks to claim credit for a co-worker's effort will upset a workplace that depends on trust, respect and reciprocity. Careful recruiting and attentive mentoring should limit the number of ill-fitting employees. But if someone gets through the net, and takes up residence within the firm, and fails to learn the culture and live up to expected norms, it seems clear an employee who lacks the talent to work with others, even if she is remarkably talented in many other respects, will be let go.

But Pixar, like other organizations, also needs its people to produce. So, for those who consistently fail to meet production deadlines, for example, the firm needs to take appropriate steps to limit damage to the company's work processes, reputation, and bottom line. So for those readers who are wondering if the type of workplace Catmull is describing is utopian, be comforted - a collaborative, trust-rich workplace is more forgiving, but it isn't blind to persistent failure.

It's the talent, stupid

Since we seem to have a handle on something, let's introduce a new reading, which will be shared at tonight's Smarter, Better Workplaces information session at the Gleacher Center. Ed Catmull is one of the founders of Pixar Studios and serves as the studio's President. His recent article in The Harvard Business Review, "How Pixar Fosters Collective Creativity", provides superb illustrations (pun intended) of how some of the things we have been talking about can be implemented. It weaves together our concerns about talent and the value of trust, respect, and reciprocity as social goods crucial to workplace success, while introducing something new to our conversation: the idea that creativity is the product of successful collaboration, not individual sweat and genius. Smart, talented people produce original, breakthrough ideas, but those ideas need to be refined and realized through collective effort. This is a fact too often ignored as we celebrate "great leaders" and "innovators." Consumers don't buy ideas, they buy products, or tickets to films, or sign up for new services, and the effort required to transform an idea into any of these marketplace-ready offerings requires the contribution of many, many people.

The trick, Catmull argues, is finding ways for talented people to work together, confident that they won't be pushed aside, or denied acknowledgement, or blamed if their contribution fails to solve a crucial problem, or produces unanticipated difficulties. This requires, as we have been proclaiming over the last several weeks, the engineering of a particular type of workplace, one where frequent interaction, across extended networks, produces social capital, that is, trust and respect and familiarity and expectations of reciprocity.

In too many workplaces, getting on the agenda - having an opportunity to have one's ideas reviewed by senior management - is a full-contact, competitive sport. In Pixar, the entire organization works to generate and incubate and improve ideas. Instead of elbowing past others, Pixar employees are encouraged to build on ideas offered by colleagues, not tear them apart. When bad ideas are offered up, the creative group sifts through other contributions looking for good ones. They don't waste time castigating the contributor who stumbled, because that weakens his confidence and his trust in the creative process, undermining his ability to collaborate further.

This belief - that creativity is a product of collaboration, not individual genius - doesn't suggest that employers shouldn't look for talent. Talented people generate good ideas. But an employer who recruits talented people, but inserts them into a workplace where competition encourages workers to keep promising but imperfectly fleshed-out ideas a secret for fear they will be stolen or ridiculed, won't succeed in producing many blockbusters.

Mentors and networks

Picking up our discussion of the article by Peter Cappelli, "Talent Management for the Twenty-First Century," let's return to a topic introduced in the last entry. The last comment focused on the need to bring social capital concerns to our efforts at updating our approaches to human capital management. Our criticism of Cappelli's helpful article was that it didn't focus enough on ways to help advance the acculturation of new employees. If the new model is "talent on demand" as Cappelli phrases it, then the parallel requirement is to get the most out of these new employees quickly. Under old approaches to talent development, firms would hire more young talent than they needed, run the new employees through training, and then park them on the bench until needed. This is costly, because you are paying employees who are not yet contributing, and a mistake, because talent your firm has recruited and trained become frustrated as they sit on the bench, and they walk out the door and are grabbed up by competitors.

We don't have an argument with Cappelli's central concern - it does make sense to bring in talent when you need it - but it seemed that he hadn't thought enough about ways to get that talent involved in company affairs right away and help it make meaningful contributions as soon as possible. We saw a helpful contribution to the discussion in the work of Robert Putnam, who argues that systems work better when individuals have expectations that they can trust their colleagues and any cooperative gesture will be reciprocated. If the extisting employees within a firm have developed habits of trust and cooperation and reciprocity, they will reach out to new employees with openness and trust and share intuitive knowledge about the firm, its processes, and expectations; will share their on-the-ground knowledge about procedural and organizational shortcuts; and will, in general, help make the new worker more comfortable and more effective.

Taking our conversation one step farther, another complaint about the Cappelli article might be that it is mainly about how organizations should bring new talent on board, and it says very little about how to keep and develop talent. One very helpful article, which could assist us in opening up the conversation in this direction, is an essay by Monica Higgins and David A. Thomas, "Constellations and Careers: Toward Understanding the Effects of Mutiple Developmental Relationships." Higgins and Thomas, in a very carefully mapped out research study, discover that efforts to match new hires with senior mentors within a firm are useful, because it helps improve employee satisfaction. Mentored employees feel, among other things, that they have more visibility within the organization, and they have a better chance to get on the agenda. However, Higgins and Thomas discover, if the goal is to improve the new hire's career outcomes - encourage retention, promote advancement, and amplify the employee's contribution to the organization's overall objectives - then it is important for the new employee to be part of a much broader network of mentors and peers. When inserted into this type of network, employees feel more fully supported, they feel more integrated into the work of the firm, and they acquire more information about the firm and its processes and procedures.

This seems, to us, to be yet another argument for incorporating social capital analysis into your organizational development plans. Not only does social capital help make new workers more effective more quickly, the networks that facilitate social capital development also help make employees feel more fully supported and at home over the long span of their employment within a firm.

Human Capital, Meet Social Capital

Peter Cappelli's compelling article "Talent Management for the Twenty-First Century", from The March issue of the Harvard Business Review, has some insightful things to say about the problem of managing a firm's human resources in an age of perpetual change and ongoing uncertainty. Cappelli's core claim - that firms need to make better projections about their talent needs, and then need to construct a strategy to fill those needs by developing talent internally, while also reaching out into the marketplace through targeted recruiting - isn't rocket science. The useful contribution that Cappelli makes, though, is refocusing our gaze. He argues that human resource managers have been too reluctant to look beyond ideas about staffing and talent management that have been passed down hand to hand for decades. He proposes looking elsewhere for inspiration. He noticed the big changes in supply chain management over the past decade, and found lessons for talent management.

Keeping talent "on the bench" - Cappelli's characterization of in-house talent development strategies that turn out executives in anticipation of needs that may never emerge - is positioned alongside the now out-dated strategy of filling warehouses with raw materials in anticipation of the needs of one's assemble-line. There's a simple reason manufacturers have turned away from this model - if consumer demands change, or production innovations require a different combination of raw materials, the investment in materials sitting in the warehouse becomes a costly mistake. Better to acquire materials at precisely the moment they are needed, and in the quantities needed. Likewise, Cappelli argues, firms should acquire the talent they need when they need it. Because recruiting and training takes time, it still makes sense to develop talent internally, after making careful estimates about one's needs. It is better to underestimate your needs, and then turn to the marketplace to recruit the additional talent needed. The costly mistake is having talent you aren't using, just as, in the manufacturing realm, the costly mistake is having raw materials you aren't using (or excess inventory you aren't selling).

But the thing only hinted at in the Cappelli piece is the importance of social capital in the workplace. If the organization is becoming a place where people are brought in when needed, and utilized with prompt efficiency, then the existing staff need to be prepared to extend a hand of welcome, and get down to the work of cooperative effort. In short, the workplace needs to be structured as a place where co-workers trust one another, expect fairness and reciprocity, and collaborate effortlessly. Further, firms of this type, where it is taken for granted that work is cooperative and colleagues can be trusted, are more likely to hold on to their employees, so costly investments in training won't be lost to competitors.

The leading scholar in the study of social capital is Robert Putnam, who unpacked his main argument in his most celebrated book, Bowling Alone. For Putnam, trust and reciprocity are the most vital forms of social capital. When we believe we can trust others, we are willing to make contributions toward common objectives, without feeling like we will be taken advantage of or treated unfairly. Trust, then, can be thought of as a social lubricant, it reduces friction and helps things move forward.

For Putnam, trust is tied up with the idea of generalized reciprocity, that is, the belief that any favor I do for you now will, in time, be repaid by you (or someone else), even (or perhaps preferably) if the favor is repaid in some other form. The idea is not “I scratch your back and you’ll scratch mine.” Instead, it’s better to view generalized reciprocity as “I’ll scratch your back now and someday, I am confident, you (or someone else) will scratch my back or pat me on the back when I need encouragement or ‘back me up’ when I need someone to support my claim for a change in my division’s allocation of resources.” For Putnam, this type of trust is manufactured through encounters and, best of all, repeated and patterned encounters. In his larger argument, Putnam relies on Tocqueville’s argument that American democracy was more robust because of our habit of forming associations and joining organizations. When we encounter one another in intimate settings—within the walls of our lodges or sitting down for bridge—and find ourselves being treated fairly, we formulate certain expectations about the trustworthiness of others. And we transfer these expectations into our relations with others, even if we don’t know them as well as we know our lodge brothers or bridge partners.

In the workplace, this leads to a simple prescription - it is important to fashion opportunities for employees to come together, in a variety of settings for a variety of purposes, both within their expected responsibilities to the firm, and outside of these roles. If employees come to believe they can pretty much trust anyone they encounter within the walls of the firm, they will extend this expectation to new hires, enhancing opportunities for current employees to immediately invite new recruits into the flow of day-to-day effort within the firm, and share intuitive and learned-from-experience knowledge about clients and processes.

Reengineering Workplaces

The 21st century has contributed a variety of new ideas about talent management. Some authors have argued that careers - a span of professional effort, often practiced within the same firm, and rewarded by promotions, through a series of increasingly senior positions strung together like a predictable narrative - are a thing of the past. The contemporary workforce moves from one position to another, from one project to another or, to speak of the challenge we all face as employers and as employees, from firm to firm. Each of us carries a set of skills, a body of experience to draw on, and a range of professional knowledge, updated continuously, and we employ these resources in each project we tackle. The role of managers, in this model, is to use talent - or to seek it out if it isn't represented among the firm's existing staff - to accomplish (and, in fact, define and reimagine) the company's objectives. It's a bit more like the challenge Hollywood producers have, acquiring the talent to create the blockbuster that will satisfy the studio's revenue targets. Put Sophia Coppola in The Godfather, Part III, and you have problems, move her behind the camera, and you have a breakout hit like Lost in Translation.

The difficulty is that many of the practices we employ to manage talent are passed hand to hand within a narrow professional sphere. Colleagues, members of professional associations, share "best practices," adopting ideas or processes that seem to work for "industry leaders." But this somewhat myopic practice might cause us to miss great innovations that haven't percolated up to the industry leaders yet and, as a result, haven't yet been awarded "best practice" status.

One of the great benefits of returning to the classroom is the chance to encounter solutions and practices freshly borrowed or transplanted from other disciplines or industries. Peter Cappelli, for example, in a reading we recently distributed at several information sessions hosted by the Graham School of General Studies, argues that solutions to our talent management dilemmas can be borrowed from a field outside of human resources or organizational development. He looks to radical changes in managing the supply chain now common across many industries. Firms no longer stockpile components, or buy up suppliers so they can guarantee an uninterrupted flow of supplies and raw materials. The new practice, designed to reduce the investment of capital in raw materials that may never be used, or the storage of manufactured products that may never be sold if consumer tastes shift, is just-in-time delivery and on-demand manufacturing. This greatly improves a firm's responsiveness - they have the capital to invest in innovations when the market demands them (or technology permits them), and they can more easily customize to match consumers' preferences.

What Cappelli is proposing is something he calls talent-on-demand. The goal is to improve our ability to forecast our talent needs, then engineer efficient and flexible processes for developing talent internally, while cultivating approaches to recruit outside talent when and in areas it proves necessary.

What sets Cappelli's argument apart isn't the straightforward prescriptions he lays out - develop talent and when necessary acquire it - which couldn't be more simple. What is worth taking note of is the source of his inspiration. He reaches outside of the circle, beyond the ongoing conversations within human resource management and organizational development, to find a logic (and a language) to craft a new way forward.