At every level, some of the toughest, most hard-headed, business people work for Blackrock; not surprising, since it is the world’s largest asset management firm, with more than $7 trillion under management.
That’s large enough to get most financial markets to sit up and take notice when it speaks — and speak it did early this year.
Larry Fink recently created a shockwave. As cofounder, chairman, and CEO of BlackRock, one of the world’s largest global asset management firms, in an open letter to CEOs he caught the attention of financial markets and beyond by insisting on the importance of companies serving a social as well as financial purpose.
The idea that corporations have a social responsibility to a much larger audience than their investors are heresy in the financial world.
But Fink can’t be ignored as a liberal do-gooder, especially when he backs his comments with hard data.
This was followed up a few months later by Jonathan McBride, managing director and global head of inclusion and diversity at BlackRock.
Hiring a diverse workforce is actually the easy part, because there is a multitude of talented candidates available once you knock down bias, unconscious or not, laziness, and trying to substitute apps and AI, which carries the same bias as it’s creators, for human thought.
Changing attitudes so those hired are included, developed and utilized is the hard part.
Recently, the company distributed a booklet called BlackRock at Our Best: The Power of Diversity that captured the diversity and inclusion guidance that the company had been providing to its managers for about a year and a half. He said it was placed on every U.S. employees’ seat on International Women’s Day (March 8), which was also the last day of an extended company “jam.”
The booklet included research findings about diversity in business, which McBride describes as “a key unlock” for getting people on board. He said it shifts the burden of proof away from the individual person arguing for diversity, where it traditionally has been. Having hard data, he said, helps managers respond to questions such as “So has diversity ever worked?” or to statements implying that because a particular employee didn’t do well, diversity must be wrongheaded. And to those suggesting the company is fine as is — if it ain’t broke, why fix it? — you can hit the ball right back over the net. Said McBride: “The data says we can do even better.”
And that is the difference.
When you have hard data, not touchy-feely or do-the-right-thing arguments, and that data provides a proven path to more and better success for both individuals and the company as a whole, people will embrace it.
Keep in mind that diversity and inclusion is a way to improve business results, not a demand that people change their personal values.
People can believe anything they want as long as those beliefs don’t interfere with achieving their company’s objectives.
Over the years, I’ve found vested self-interest (VSI) to be not only the most powerful people motivator around (…) And the idea must have merit when you consider that a Sudanese cell phone billionaire is using it to incentivize African heads of State to act responsibly.
So, instead of hiring for diversity and the social good, why not hire for greed, pure and simple.
You won’t even need to rationalize your decision, since the data makes it a no-brainer.
Researchers from the Massachusetts Institute of Technology and George Washington University calculated that going from an all-male or all-female team to one with equal representation of men and women correlated with a revenue gain of 41%.
41%! That ain’t chicken feed.
Moreover, the phenomenon is global.
A study of 1,000 companies across 12 countries by McKinsey & Co. showed that those in the top quartile for gender diversity were 21% more likely to have above-average profitability than companies at the bottom of the pile. If companies had a greater balance in ethnicities at work, they would on average perform 33% better than those that don’t. Other studies that McKinsey did in previous years (paywall) yielded similar conclusions.
It seems obvious that women would understand women customers better than men do, but if you doubt it Home Depot is an excellent case study.
Trish Mueller joined HD and became CMO a few years later. She recognized that the data collection showing most purchasers were male was incorrect and the company set out to disversify their market.
In 2013, the Home Depot’s core executive team had a strategy meeting about how the brand could appeal to more customers and markets—like women—and expand their product range. There were two women executives in the room: Mueller and Cara Kinzey (Senior Vice President, Technology). Trish and Cara suggested that the brand’s product range should be as wide as its name. Home Depot included the word “home,” after all, and could expand into product categories like cookware, small appliances, and kitchen accessories.
“Cara and I came at it from a women’s perspective,” Trish says, “without it being that overt.”
They decided to test their ideas on the next Black Friday sale.
They gave their merchants a broad mandate: “If it’s something you can conceive of using in your home, let’s have a conversation about it.”
Some of the home appliances and cookware options they tested proved so successful that they’re now kept long-term inside every store. The Home Depot also had some rather unexpected hits during their Black Friday sales, like a giant fluffy teddy bear that sold for $29.99. “Who would’ve ever thought to see that at Home Depot?,” Mueller says. “But we were sold out in ten minutes, the first year we carried them.”
Unlike smaller rival Lowe’s, Home Depot isn’t aggressively adding to its store base. In fact, it has opened just one new location in the U.S. market since 2013. Yet the retailer is beating Lowe’s in overall revenue growth thanks to its stronger customer traffic.
Would HD have had the savvy to go after the women’s market without Mueller’s and Kinzey’s viewpoint? Unlikely for guys who thought pink power tools were the answer.
Has it translated to more diverse hiring? It has in Canada (I couldn’t find US stats).
So, for all you guys who have no time for moral imperatives, turn your VSI up to high and do it for greed.
It’s amazing to me, but looking back over more than a decade of writing I find posts that still impress, with information that is as useful now as when it was written. Golden Oldies is a collection of what I consider some of the best posts during that time.
To truly understand this post, you need to click the link and read the original explanation of VSI. VSI isn’t particularly original, but it is rarely called that — people prefer nicer or more professional sounding euphemisms. And that’s OK; I just prefer to opt for clarity and simplicity — which is why I’m considered too blunt.
Earlier this year I was working with a client, Jim, on various management approaches, such as offering good feedback and open sharing of all information, i.e., not dribbling it out over multiple requests, that he wanted to integrate into the company culture. During the conversation he asked me “What can I do to open the minds of some of my managers?”
Unfortunately, there is really nothing you can do to force a person to change the way they think, but there is much you can do to encourage it. I honestly believe that the fastest, as well as the most potent, way to encourage change is good old VSI.
I used to believe that people had to perceive the need for change before they could change, but based on experience I’ve found that if they see benefits to themselves from doing things differently they will start moving in that direction and the results can be almost surreal.
Jim had a manager who was known for making his people come to him constantly to get the information necessary to do the work they were assigned. His attitude/actions resulted in higher-than-normal turnover in his group, but he insisted that he wasn’t doing anything and people could get the information at any time, so there was no correlation.
Using VSI, Jim and I worked out a two-prong approach to change his behavior.
20% of his annual bonus was tied to reducing his group’s turnover by 30% (which would bring it in line with the company as a whole); and
Jim started doing to the manager as he did to his group by forcing him to come and ask and then dribbling out the information he needed to meet his targets.
Part of the manager’s reaction was straightforward—he grumbled a bit about the retention bonus. But the surreal part was in his reaction to the information plug—nothing, not a word or an action to acknowledge what was going on.
However, he must have noticed, because within days of it starting he was giving more complete information to his people.
Not all at once and not very graciously, but he loosened his hold on the information flow, so did Jim. If the manager backtracked Jim tightened up and the manager learned that to get he had to give.
At first, his people were cautious, not really trusting the new openness, but after about a month the results started and after six weeks they took off like a rocket—productivity and retention zoomed north, while grumbling and discontent headed south and on into oblivion.
But the surreal part is that, in spite of his people commenting publicly on how differently he was handling assignments, meetings, etc., to this day the manager claims that nothing changed and certainly not him.
If you live in California and care about the environment you should know about OhmConnect.
OhmConnect is the intermediary that keeps your unwary actions from instigating the use of dirty energy sources and pays you for the privilege.
Shouldn’t we be allowed to influence those decisions that affect us all?
Now, we can. Every five minutes, OhmConnect reviews the electricity grid’s performance and calculates when our community can make the greatest positive impact on the grid. OhmConnect works directly with the energy markets to balance the grid by automatically adjusting thermostats, electric cars, and smart plugs. Best yet, the electricity grid pays OhmConnect for this service and we pass those dollars on to you.
We founded OhmConnect to make it simple to optimize our electricity, enable a sustainable energy future, and have fun while doing so.
Right now OhmConnect only works with California electricity providers, i.e., PG&E, SCE, and SDGE; hopefully it will spread further as time passes.
So whether you do it because you care or you are too busy/cynical/self-absorbed/unbelieving and do it for the money, or a combination thereof doesn’t matter.
“The US has 2.3 billion square feet of self-storage space. (The Self Storage Association notes that, with more than seven square feet for every man, woman and child, it’s now “physically possible that every American could stand — all at the same time — under the total canopy of self-storage roofing. …one out of every 10 households in the country rents a unit…”
According to Derek Naylor, president of the consultant group Storage Marketing Solutions, “Human laziness has always been a big friend of self-storage operators, because once they’re in, nobody likes to spend all day moving their stuff out of storage. As long as they can afford it, and feel psychologically that they can afford it, they’ll leave that stuff in there forever.”
I’ve said for years that people aren’t water faucets, able to turn off emotions and thoughts or change their MAP just because they change environments from home to work or vice versa.
Reading the article made me realize a hidden reason that makes changing culture so difficult.
It’s not just that the parts of the culture changes, but that the employees won’t let go of the parts that are changing or being replaced; instead they store them away to sort later.
But later never comes, so, like the stuff in the storage units, it sits in the back of their minds running up a bill that is paid in energy, focus and productivity.
As a result of the economy, many of the thousands of storage units that were in use for no other reason than laziness are being cleared out, or at least downsized, and the stuff gotten rid of.
Perhaps this is a good time to work with your employees to clean out their mental storage places; to purge the cultural residue and clutter that fills them up.
So clear out the rubbish, open the windows and let the fresh air flow through reenergizing everyone.
I’m not saying that change is easy, but I hope this bit of insight will help you fulfill your 2014 vision.
A few weeks ago I wrote that money isn’t the best motivator, lots of people have written posts with a similar theme and the idea is backed up by solid research.
But I saw a great video on the subject at Feld Thoughts and thought I’d share it with you.
(I’m not sure which I like more, the presentation or the technology that animates the whiteboard:)
Earlier this year I was working with a client, Jim, on various management approaches, such as offering good feedback and open sharing of all information, i.e., not dribbling it out over multiple requests, that he wanted to integrate into the company culture. During the conversation he asked me “What can I do to open the minds of some of my managers?”
Unfortunately, there is really nothing you can do to force a person to change the way they think, but there is much you can do to encourage it. I honestly believe that the fastest, as well as the most potent, way to encourage change is good old VSI.
I used to believe that people had to perceive the need for change before they could change, but based on experience I’ve found that if they see benefits to themselves from doing things differently they will start moving in that direction and the results can be almost surreal.
Jim had a manager who was known for making his people come to him constantly to get the information necessary to do the work they were assigned. His attitude/actions resulted in higher-than-normal turnover in his group, but he insisted that he wasn’t doing anything and people could get the information at any time, so there was no correlation.
Using VSI, Jim and I worked out a two-prong approach to change his behavior.
20% of his annual bonus was tied to reducing his group’s turnover by 30% (which would bring it in line with the company as a whole); and
Jim started doing to the manager as he did to his group by forcing him to come and ask and then dribbling out the information he needed to meet his targets.
Part of the manager’s reaction was straightforward—he grumbled a bit about the retention bonus. But the surreal part was in his reaction to the information plug—nothing, not a word or an action to acknowledge what was going on.
However, he must have noticed, because within days of it starting he was giving more complete information to his people.
Not all at once and not very graciously, but he loosened his hold on the information flow, so did Jim. If the manager backtracked Jim tightened up and the manager learned that to get he had to give.
At first, his people were cautious, not really trusting the new openness, but after about a month the results started and after six weeks they took off like a rocket—productivity and retention zoomed north, while grumbling and discontent headed south and on into oblivion.
But the surreal part is that, in spite of his people commenting publicly on how differently he was handling assignments, meetings, etc., to this day the manager claims that nothing changed and certainly not him.
How do you lead/influence/motivate/cajole/force others to move in the direction you choose or achieve a necessary goal, large or small?
That question is the basis for yards of books and megabytes of content, but in spite of all that I thought I’d add my 2 bits to the total.
My 2 bits is found in 2 words: vested self-interest (VSI).
Over the years, I’ve found vested self-interest to be not only the most powerful people motivator around, but also one of the least expensive, since the cost is mainly from the effort to learn what it is for each person.
Contrary to what a lot of people think money isn’t always in first place. If it were, then companies wouldn’t lose talent to other companies offering the same or even lower pay.
Just as it’s an error to always assume that dollars will do it, you can’t assume that what turns on one turns on all. Hot buttons are as individual as your people are and don’t always involve tangibles.
As a manager, it’s up to you to discover each of your people’s hot buttons, i.e., what really turns them on, and then find a way to satisfy it in return for what you want in performance, innovation, etc.
Taking the time to learn what the buttons are allows you to power your team as never before, which, in turn, gives you the ability to satisfy your own.
Remembering that generalities are always dangerous, here are some of the most common hot buttons
public recognition – not just for big things, but for the small—it is the everyday wins that power most people’s working lives;
strokes – a few words here, a compliment there, doesn’t take much time, but be warned, people aren’t stupid, if your comments are lip-service only they will know and respond accordingly;
giving back – supported or encouraged volunteer programs, leave day banks, etc.;
making a difference – internally and/or externally; and
growing/stretching – the opportunity to do something new, learn new skills, etc.
Obviously, money is still a motivator, but it’s not always big bucks, it’s more that the amount is relevant to the accomplishment and logical relative to the company’s circumstances.
And it doesn’t need to be “new” money; it can be a different way to cut a current pie. For example, I get many queries from senior execs asking for exotic approaches and detailed how-to’s for implementing cultural and other intangible changes that often require encouraging (and at times, coercing) their managerial staff into actually doing them.
The most successful method I’ve found is as simple as one, two, three.
Carefully define, in a quantifiable manner, what you want done (not “increase retention,” but “reduce turnover by X%”).
Include these well-quantified goals in the managers’ annual objectives. (This is not a variation of MBO.)
Make it clear to your managers that they will be evaluated on these goals and that the evaluation will impact their annual reviews and compensation.
Entrepreneurs face difficulties that are hard for most people to imagine, let alone understand. You can find anonymous help and connections that do understand at 7 cups of tea.
Crises never end.
$10 really does make a difference and you’ll never miss it,
Tuesday I shared my version of 
How do you lead/influence/motivate/cajole/force others to move in the direction you choose or achieve a necessary goal, large or small?
