Streaming Leadership Derailment

I’m a big movie buff. Since I have young children I rarely get a chance to go the movie theaters anymore to see a film that doesn’t star Woody, Buzz, Lightning McQueen, or a princess of some type. In my 5+ years of fatherhood, Netflix has become a savior in terms of feeding my movie addiction. For me and 20 million other subscribers, seeing that a new movie is available for streaming online or getting that red envelope in the mail is one of life’s simple joys.The joy of being a Netflix customer was mightily shaken last July when customers received a brisk, impersonal email informing them that the video subscription service pricing would be increased by as much as 60% per month unless subscribers decided to substantially limit the services they were receiving. In essence, customers were abruptly told that they would no longer be able to enjoy both the streaming movies and DVD-by-mail features. They would be required to choose one type of service otherwise incur the price hike to retain both options.Netflix customers were outraged by this imposed price increase and/or elimination of service options. This outrage was not only communicated via blogs and Facebook posts. Many customers have truly put their money where their mouth is by canceling their subscriptions. The company’s stock price is now 42% lower than it was in July before the price hike announcement. An organization that by all accounts changed the video rental industry and was experiencing a fantastic upward trajectory envied by the business world has taken a serious turn for the worse. How did this happen?The recent events at Netflix appear to be yet another unfortunate example of leadership derailment. The company’s decision to increase prices and the manner in which they communicated the changes to customers has been perceived by many as a bold and arrogant move. In September, Netflix CEO Reed Hastings issued a statement apologizing to customers. However, it is possible that some may view his apology as too little, too late. Even after the initial customer backlash, Netflix at first confidently defended their decision and even announced in August that they expected to gain 400,000 subscribers by the end of September. Recently, Netflix has projected that it will have actually lost 600,000 customers by the end of September. In other bad news, Starz, a key movie content partner for Netflix, ended its partnership with the organization. The company has decided to rebrand their DVD-by-mail service as a separate company called Qwikster. The effectiveness of this strategy is being questioned by many and could further stoke the flames of the fire started earlier this summer.Two months after the initial controversy, Reed Hastings’ blog post apology stated that the July announcement “lacked respect and humility” and indicated that he should have personally communicated in more detail the reasons for the changes. He went on to say, “In hindsight, I slid into arrogance based upon past success.” Hastings ends his statement by saying that he and his team will work hard to regain customers’ trust. Interestingly enough, his actions and choice of terminology strongly parallel the leadership derailment research findings of Hogan Assessment Systems. High potential leaders assessed by Hogan tend to be seen as confident, assertive, ambitious, and visionary. Some of these very characteristics are likely present in the senior leadership team at Netflix and surely contributed significantly to the company’s hugely successful rise. However, during stress or heavy workloads, when leaders aren’t paying attention, or during times of change, this confident style may emerge as counterproductive behaviors viewed by others as arrogant, lacking humility, setting unrealistic expectations, and ignoring negative feedback. In his own words, Hastings acknowledged a very similar behavioral pattern. Furthermore, derailing behaviors related to arrogance often lead to the inability of leaders to be seen as trustworthy and sincere, hence Hastings’ comment that Netflix is now committed to regaining customer trust. Leaders that allow their natural confidence to descend into arrogance rarely admit when they are wrong, learn from mistakes, or take responsibility when things go wrong. This recent statement by the CEO appears to potentially demonstrate a realization that a mistake was made and a willingness to take ownership of the misstep…however the pricing increase was not rescinded and only the poor communication of the policy change was addressed. Will the apology and Qwikster rebranding strategy be effective in retaining customers and attracting new subscribers? Can Netflix and its leaders get back on track after derailing so drastically? Stay tuned! 

Can’t We All Just Get Along?

Working together; it’s such a simple concept, and vital for work teams. However, good teamwork is often lacking in groups. Take a moment to fathom how much could be accomplished in the world if individuals were just better at working together.

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Leader of the Pack

For as long as I can remember, I have had a strong affinity for canines. In fact, I haven’t ever been without at least one, and don’t ever imagine a time in my life when I will. In keeping with that trend I recently became the proud adopted father to two dogs - Weimaraners. You have probably heard about how utterly insane this particular breed of canine can be. You may have even experienced it firsthand; either way their reputation precedes them. I tend to sway from popular opinion and think that people often err on the side of exaggeration, so I went with the mentality of “how bad can it really be?” and took the leap. The diplomatic way to summate the result of that leap is to say that I have learned a lot in these past months. I have learned a lot about patience, when to laugh, when to scream, when to cry, and also just how quickly my hair can morph into the color of the very beasts causing the change. Oddly enough, however, I have also been able to draw some conclusions about an unexpected topic: leadership. As mentioned above there are two of them: a boy and a girl. Note that I did not say a male and a female. The terms boy and girl imply some degree of adolescence or immaturity, and although these dogs are well into adulthood, I think boy and girl more aptly describe them. In an effort to protect their anonymity I will henceforth refer to them as Bonnie and Clyde, but their real names are Shiner and Luna. To be fair, I am not sure I have ever met two creatures with better intentions than Bonnie and Clyde. They are incredibly sweet and good-natured; it’s just that they have some wires loose. Or maybe even all of their wires loose. And maybe not just loose, but severed and hanging. So what do these two schizophrenic, hyperactive, sociopathic creatures have to do with leadership? To begin with, I am in a position to lead these two beasts. I have had to step in as a secondary authority figure and become the alpha male (or so I have to tell myself) of the pack. If you were to ask Clyde, he would probably tell you something different, but he can neither write nor speak English, so I win. To date Clyde and I hold many long standing battles, one of which is the trash. The dog loves, moreover needs, to get into the trash. He has figured out how to use the foot release (I think his cunning wire is the only one still connected) to open the lid and stick his head in, and if he still can’t get what he is after, he will just knock the whole can over and enjoy. I have yet to learn how to teach the animal not to exhibit this behavior, so as a leader in this situation I feel like I have effectively failed. I have analyzed the aforementioned failure for months and tried in vain to formulate different ways to work with Clyde, but I had a moment this past weekend that could only be described as an epiphany. It was Saturday afternoon and he had rummaged the kitchen trash. In lieu of the normal scolding, Clyde and I had a moment of unspoken conversation marked by about 30 seconds of locked eyes and puzzled facial expression. It went something like this:Me: “Clyde, why do you keep knocking over the trash? You know you I am just going to put it back in the can and you are going to get in trouble. Why do you do this?”Clyde: “Why do you keep standing the can back up, picking up the trash, and scolding me? You know I am just going to knock it right back over when you turn around.”That dialogue, while it may seem trivial, changed my frame of mind. Occupationally, I am surrounded daily by conversations about leadership. What is good leadership? What makes it? What traits coincide with it? What often arises is that leadership starts with values. In order to effectively lead individuals, a person must find a way to align his or her values with those being led. Such an alignment helps to form a bond that motivates people to work toward and achieve a common goal. Historically, those individuals who have led successfully, frequently did so by using their skills to make others believe what they believed. With certain exceptions, of course, those who have attempted to lead through intimidation failed, and failed rather quickly. An iron fist certainly has its place, but it can rapidly cause a breakdown in cohesion that will lead to resentment, or even mutiny. We have all been surrounded by people in leadership positions all of our lives (note that I didn’t say leaders). Thinking back, which of those individuals stick out in your mind? To me it isn’t the screaming football coach, tyrannical geometry teacher, or angry manager. It is those individuals who led me in such a way that I didn’t even realize I was being led; those individuals who held a strong passion for something and found a way to make that passion contagious. Exposure to that type of leadership is more than motivating, it is inspiring, and long-lasting.What struck me this past Saturday afternoon was that Clyde and I are suffering from a terrible misalignment of values. It is not that he acts this way because he likes to anger me (at least so I think), in fact I know he doesn’t like to get in trouble. It is just that one of his core values is food. And it is not that I like to become angry and scold him, it’s just that I value cleanliness and order. The result of this misalignment is a pretty big problem, as Clyde is a dog, and a German dog at that. I don’t speak dogese or German, so this is going to be a constant struggle. I could try to adapt to his way of thinking, but that would just leave me overweight with a messy kitchen. To make a long story short, Clyde is going to win this battle and I just need to resign to cleaning up trash for the rest of his days. Leading people is different, however, as we can understand spoken language and have a stronger ability to reason. People enjoy leadership through inspiration, and a sure fire way to inspire is to tap into an individual’s values and drivers…and the first step in tapping into them is to identify them. 

Think Twice Before You Say Nothing

The political season is upon us again and we are being presented with the latest episodes of SYTYCD—So You Think You Can Debate.A recent study from Harvard offers the following research-based advice: If you're stumped by a question in an interview, fake it. You'll have a better chance of making a good impression if you respond eloquently and slightly irrelevantly than if you answer truthfully but with a dozen "uhs" and "ums" thrown in, according to the study.Subjects were shown different videos of a political debate. In the first, one of the candidates answered the question asked. In the second, he dodged it by answering a similar question. In the third, he dodged it by answering a completely different one. When the candidate answered a similar question, subjects failed to notice the switch. They also liked him better if he answered a similar question well than if he answered the actual one less eloquently.People who dodge questions artfully are liked and trusted more than people who respond to questions truthfully but with less polish. The take-home message for job candidates is that interviewers may not remember if you avoid a question, as long as you do it eloquently. As many high-school debate champions know well, people treasure style over substance, and will be inclined to trust you more if you come off looking like you know what you're talking about, even if you don't.HR people look for that sense of collectedness; being able to gracefully answer any question that's put to you, even if you are not completely sure of the answer, will help convince them of your poise.Robert McNamara famously said, “Never answer the question that is asked of you. Answer the question that you wish had been asked.” It’s important to recognize the transition devices. The first 10 words of an answer are key to creating an artful dodge. You’ll hear phrases like “That’s a good question” or “I’m glad you asked that.” This seems to help prime the listener to accept what comes next as relevant.Many politicians seemed to have mastered this skill. Hillary Clinton was phenomenal at dodging questions. Our current President is deft at sidestepping. And looking back, Ronald Reagan was a master dodger, too. Sarah Palin has a unique approach. She is sort of intellectually honest about dodging questions. She basically states her intention to answer a different question than the one asked.This verbal judo is not confined to political discourse. It applies to business as well. Think about the leader fielding tough questions about layoffs. Or George Clooney’s character in Up in the Air. He flies around the country firing people. They say things to him like “How can you fire me?” and he doesn’t answer them. He dodges. He says, “This is an opportunity for you.” Years ago when I was obtaining my license to practice psychology, I was supervised by the first licensed psychologist in Georgia. Hermon was 98 when I met him and he died at 104. He was unbelievably bright, wise, energetic, and embodied a wonderful southern gentility and charm. We interviewed and assessed thousands of job candidates for our clients. In full sight, Hermon had an interesting plaque on his desk that said, “Think Twice Before You Say Nothing.” You could see just about every interviewee pause as they pondered this instructive yet enigmatic message. I hope I hear straight answers to the debate questions coming up over the next few months. And I hope I’m not impressed by the artful dodger.

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Defining Moments in Leadership

My colleagues and I recently attended a local breakfast meeting with Tulsa’s Lead Change Group. We focus on leadership virtually every day at Hogan, but stepping away from our desks and engaging in a community discussion about leadership proved to be both interesting and insightful. Plus, the bagels and coffee helped get the early morning off to a great start.

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How Attractive Is Your Personality? (Part I)

Although it sounds like the hook in a romantic comedy, recent findings indicate that your inner beauty (or lack thereof) might be affecting your outer beauty.Let me back up. A few months ago I was analyzing data from a large community sample and I stumbled upon some interesting information. Specifically, I found peer ratings of physical attractiveness on a sample of people who completed the Hogan personality and values assessments. Considering that I am (a) distractible and (b) a nerd, I decided to investigate further. It’s important to note that these were not ratings of likeability, friendliness, etc. Peers rated the extent to which the target person was “good-looking,” “unattractive,” “physically attractive,” and “not good-looking.” So the question became: does one’s personality affect their perceived physical attractiveness? The answer, to an extent, is yes. There were significant effects on seven of twenty-eight scales across the Hogan Personality Inventory, Hogan Development Survey, and Motives, Values, Preferences Inventory. I found positive correlations between ratings of physical attractiveness and scores on HPI Interpersonal Sensitivity, HDS Colorful, MVPI Affiliation, and MVPI Altruistic. Additionally, I found negative correlations between physical attractiveness and HDS Reserved, HDS Leisurely, and HDS Imaginative. What does this mean in non-Hoganese? First, we are physically attracted to people who are nice, friendly, approachable, and considerate. No big surprise there; mean people are ugly (or is it that ugly people are mean because they are ugly?). Second, we are attracted to people who have a flair for the dramatic, drawing a lot of attention to themselves, and being the center of attention, even to a fault. These big personalities draw our eyes to them and we seem to find them attractive for that, even if they are acting in this way for self-serving reasons. Next, we find people who value networking, teamwork, collaboration, and social interaction physically attractive. This may indicate that we are attracted to people who have the inclination or desire to engage and get to know us. Finally, the altruists of our society are found to be attractive. These individuals are motivated by a concern for the welfare of others. The attraction is likely borne out of the perception that the person is taking a genuine interest and concern for our needs and well-being; perhaps a more generous lover? Now let us turn our attention to our turn-offs. First, we are not fans of the cold, stoic, aloof types. These individuals appear indifferent to the feelings or concerns of others, so this finding is in alignment with the aforementioned factors of heightened attraction. Next, we find passive-aggressive behavior to be particularly unattractive. Although these individuals may appear friendly and cooperative on the surface, we seem to see through fa?ade and recognize that they are likely to act on their own agenda, which makes them less desirable. Finally, our eccentric visionaries are apparently persona non grata. Overall, results indicate that creativity is not related to attractiveness, but here we have an indication that extreme (and unconventional) creativity is actually a mild repellant. These results come from a single (but large) community sample. Therefore, these are not necessarily universal truths. Nonetheless, the trends are clearly there and of mention. Also, the peers providing these ratings knew the target people, so there is no guarantee that these results would generalize to how attractive a stranger at a bar will find you. That being said, it is logical that personality affects physical attractiveness only at the point that someone gets to know us at least a little bit. In summary, these results indicate that personality does have an impact on physical attractiveness. If you want to be perceived as attractive, stop acting like an inconsiderate jerk. Even if you have the face of Adonis (or Persephone), curt, brash, or uncaring behavior will likely downgrade your hotness factor. The next installment on this topic dives into gender differences, explaining what it takes for men and women (separately) to be perceived as physically attractive. Sneak preview: there are clear differences and the results do not confirm what we may commonly assume…

The Dark Side of Entrepreneurship

The future of the US (and world) economy depends on the activity of entrepreneurs, who create businesses, jobs, and wealth. Although, as Adam Smith noted, they do this for perfectly self-centered reasons and the fact that others profit from their activities is of no interest to them. Adam Smith was speaking from personal experience, and if he were alive today, he would still need to speak from experience, because applied psychology knows little about the psychology of entrepreneurship in an empirical way—although interest in the subject has begun to emerge. What happens when they are in charge? The bottom line is that they make disastrous managers. Read More »

Motivating Employees in Today’s Economy: A Lesson from the Past

  Faced with the threat of a double-dip recession, many U.S. companies, rather than re-expanding their diminished workforces, are expecting more from their employees for less pay. These circumstances put a strain on worker satisfaction; a survey by First Command Financial Services Inc. found that 24% of respondents were unhappy with their job and 39% were actively looking for a new employment. Talent Management magazine quoted Scott Spiker, First Command CEO, as saying, “This rising discontent in the middle-class workforce is clearly being fueled by the continuing economic turmoil.” Reduced bonuses and extended work weeks are sure to diminish morale. So what can organizations do to motivate and retain their talent given today’s economic constraints? A look back into the field of psychology may provide the answer. Read More »

M&As | Employee Impact

Dozens of mergers and acquisitions (M&A) occur on a daily basis in the business world. A vast majority of these deals are strategic plays designed to reduce costs, increase competitive advantage or simply buy out the closest competition. Many M&As go relatively unnoticed by the public unless an interest piece is published showcasing a $ billion headline paired with a well-known company. Unless you track these events, or their impact on everything from your cell phone bill to your investment portfolio, they can be easy to miss. Here is an abbreviated list of the largest global M&A’s from Q1 of 2011:1. AIG: $59 billionAcquirer: Preferred Shareholders2. TMobile USA: $39 billionAcquirer: AT&T3. Progress Engery Inc.: $26 billionAcquirer: Duke Energy Corp.4. Fiat SpA-Auto Business: $18.5 billionAcquirer: Shareholders5. ProLogics: $15.2 billionAcquirer: AMB Property CorpIn the last few months, M&A’s have also been a recent topic of conversation with multiple individuals from a consulting standpoint. Unfortunately, these have been negative experiences from the ‘acquired,’ citing example after example of poorly-managed and poorly-implemented transitions. Regardless of the financial purpose behind M&A activity, there are still corporate citizens (aka: people) that are dramatically affected by such deals. It is only natural that employees may feel alienated in their role or fear losing their senior position to an individual with marginal experience in their area of expertise. Said differently, an acquired employee is likely to view this situation as something closely aligned with a hostile takeover rather than a merging of shared I.P. and capital in which a new more competitive company can emerge. Senior executives must then lead this transition rather than manage reactions or mitigate attrition.Deanna Hartley, in an article from Talent Management magazine, proposes that leaders must clearly communicate the intentions behind M&A activity, expectations of value-added processes, and potential risks and opportunities to all staff members. Hartley goes on to say that a key process in communication with M&A is ensuring your message matches what employees hear or interpret. She suggests numerous top-down meetings, roundtable discussions, and exposure to leadership from both sides of the deal. Ultimately, clarity and security should be a target in the minds of upper management while stabilizing the merging of two distinct companies. As long as new business relationships form with frequent, open dialogue, there should be reduced chance for productivity to suffer.It would not be a surprise to say that there is little emphasis on aligning corporate culture in the boardroom during M&A negotiations. Be that as it may, companies should still involve employees to gather opinions or ideas on the transition as soon as a deal is reached. Early intervention, in the form of open communication, is crucial to quiet the fears of employees on both sides of the table.