5 steps to building great business relationships — Jim Dougherty

MIT Sloan Sr. Lecturer Jim Dougherty

MIT Sloan Sr. Lecturer Jim Dougherty

From Harvard Business Review

It was the early 1990s, the week between Christmas and New Year’s. I was working as a sales rep for a prominent software company. Making the rounds of my Wall Street clients, I wished them happy holidays and thanked them for their business.

As I was leaving an appointment with the CIO of a very large investment bank, I shook his hand and wished him a Happy New Year. He stopped me and went back to his desk, took out a piece of paper and handed it to me. It was an order signed by the CEO dramatically increasing their purchase of our software and renewing their contract six months early.

I was stunned. I hadn’t been looking to make this sale—really, there was no reason for him to reorder this early. But as his sales rep, this was spectacular news: As at many companies, my employer used “multipliers” at year-end to encourage reps to sell more, so I would make a lot more money making this sale in late December than in June.

I thanked him profusely.  And as I walked back to my office, I thought about why he did it. How did he convince his boss they should renew well before they had to?  What was his rationale to his boss for buying so much more?

Eventually it dawned on me that after years having a solid relationship with me, he’d taken an emotional stake in my success. He went out of his way and used precious political capital to help me out even when I hadn’t asked him to.  If I had asked for this it is quite likely it would not have happened and may even have damaged our relationship.

To me, this is the defining attribute of a great business relationship: when each party has an emotional stake in the other’s success. This reciprocal relationship is common in our personal lives—in most families, we can expect our parents and siblings to have that, as well as some close friends. But for a business associate who was a stranger only two years ago, how did we reach this point?

Read the full post at the Harvard Business Review. 

Jim Dougherty is a Senior Lecturer in Technological Innovation, Entrepreneurship, and Strategic Management at the MIT Sloan School of Management.

Too much, too little, just right: Stress at work, and the Goldilocks Principle — Andrew Yap

Asst. Prof. at INSEAD and former MIT Sloan Lecturer Andy Yap

From WBUR Cognoscenti

Stress used to be a dirty word. Study after study has shown that stress makes workers less productiveless satisfiedless healthy — and, therefore, more likely to call in sick. For many years, the message to managers was simple: Stress causes burnout; avoid it for yourself and for those who work under you at all costs.

Nowadays, however, the message is more complex. A growing body of research indicates that some stress is good for workers. Perhaps more important, studies have found that too little stress can be bad. Stress related to boredom leads employees to engage in counterproductive work behavior, such as spending aimless time on the Internet for non-work reasons, gossiping about colleagues, and taking way too much time completing work assignments.

So: Excessive stress leads to mental exhaustion and poor health, but not enough stress results in boredom and demotivation. What’s a manager to do? The answer lies in the Goldilocks Principle. The optimal level of stress is not too much, not too little, but an amount that’s just right.

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How Wal-Mart can secure the American Dream for millennials — Thomas A. Kochan

MIT Sloan Professor Thomas Kochan

MIT Sloan Professor Thomas Kochan

From Fortune

It’s time all stakeholders — employees, business leaders, government officials, and educators — have a serious discussion about how the nation can create better jobs for the next generation.

Wal-Mart has been getting good press recently for its decision to raise its associates’ wages to a minimum of $9 per hour. And it should. So should the unions and community groups that have been pressuring the U.S. retailer to do just that. They also deserve some of the credit for exposing Wal-Mart’s low wages, reliance of associates on food stamps and other public assistance, anti-union tactics, and bottom of the industry ratings on customer service and employee satisfaction.

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GM can recover if it changes the culture — Neal Hartman

MIT Sloan Senior Lecturer Neal Hartman

MIT Sloan Senior Lecturer Neal Hartman

From Detroit Free Press

It’s been a rough year for General Motors. The company has recalled more than 28 million vehicles worldwide and is liable for billions of dollars in automotive repairs and victim compensation. It suffered an 85% drop in its second-quarter earnings and faces multiple state investigations, not to mention class-action lawsuits related to safety issues. Can GM recover from this massive crisis?

It can make a comeback, but the recovery hinges on changing the organization’s culture. For years, GM focused on cost-effectiveness and the bottom line, creating what the new CEO Mary Barra calls “a pattern of incompetence and neglect.” To address the current crisis, she of course needs to fix the safety problems, but she also needs to create a new company culture. Safety must become the priority over cost savings in order to regain consumer and market trust, and GM’s focus needs to be on the customer.

So far, Barra, who inherited the crisis when she was promoted to CEO this past January, is moving in the right direction. By firing 15 employees who were involved in the lack of communication about safety issues, she sent a powerful message both within and outside of the company about the company’s changing priorities.

Read the full post at the Detroit Free Press.

Neal Hartman is a Senior Lecturer in Managerial Communication at the MIT Sloan School of Management.

Taking a wait-and-see approach with disruptive innovations — Matt Marx

MIT Sloan Asst. Prof. Matt Marx

From TechCrunch

There’s been quite the brouhaha lately about disruptive innovation. On one side is Harvard Prof. Clay Christensen (author of The Innovator’s Dilemma) and his long-prevailing theory about how disruptive innovation drives incumbents out of the market. On the other side is Jill Lepore and her attack of Christensen’s theory in The New Yorker. It’s an interesting issue: Do disruptive innovations almost always lead to the downfall of incumbent companies? Is their only hope to “disrupt” themselves?

Along with Joshua Gans of the University of Toronto and David Hsu of Wharton, I conducted a study on the speech recognition industry over the last 58 years. We found a surprising pattern among entrants that adopted disruptive technologies: Instead of always going head-to-head with incumbents, they often adopted a dynamic commercialization strategy in which they started out competing against them, but later switched to cooperating with them (e.g. by licensing their technology). To understand how this can happen, we need to review what it means for a technology to be “disruptive.”