Category: Business Management Articles

1. E. Carson, “How Loneliness Could Be Changing Your Brain and Body,” CNET, June 15, 2020, www.cnet.com; J. Holt-Lunstad, T.B. Smith, and J.B. Layton, “Social Relationships and Mortality Risk: A Meta-analytic Review,” PLoS Medicine 7, no. 7 (July 2010) doi: 10.1371/journal.pmed.1000316; V. Murthy, “Work and the Loneliness Epidemic,” Harvard Business Review, The Big Idea (September 2017): 3-7; and S. Cacioppo, A.J. Grippo, S. London, et al., “Loneliness: Clinical Import and Interventions,” Perspectives on Psychological Science 10, no. 2 (March 2015): 238-249.

2. H. Ozcelik and S.G. Barsade, “No Employee an Island: Workplace Loneliness and Job Performance,” Academy of Management Journal 61, no. 6 (December 2018): 2343-2366.

3. M. Mortensen and C.N. Hadley, “Life Under COVID-19 Survey Results Report,” May 12, 2020, www.covidcoping.org.

4. K. Vasel, “The Dark Side of Working From Home: Loneliness,” CNN Business, April 30, 2020, www.cnn.com. See also J. Mulki, F. Bardhi, F. Lassk, et al., “Set Up Remote Workers to Thrive,” MIT Sloan Management Review 51, no. 1 (fall 2009): 63-69.

5. J.R. Hackman, “Leading Teams: Setting the Stage for Great Performances” (Boston: Harvard Business Press, 2002).

6. R. Wageman, H. Gardner, and M. Mortensen, “The Changing Ecology of Teams: New Directions for Teams Research,” Journal of Organizational Behavior 33, no. 3 (April 2012): 301-315.

7. M. Mortensen, “Constructing the Team: The Antecedents and Effects of Membership Model Divergence,” Organization Science 25, no. 3 (May-June 2014): 909-931.

8. N. Scheiber, “The Pop-Up Employer: Build a Team, Do the Job, Say Goodbye,” The New York Times, July 12, 2017.

9. M. Haas and M. Mortensen, “The Secrets of Great Teamwork,” Harvard Business Review 94, no. 6 (June 2016): 70-76.

10. C.N. Hadley, “Emotional Roulette? Symmetrical and Asymmetrical Emotion Regulation Outcomes From Coworker Interactions About Positive and Negative Work Events,” Human Relations 67, no. 9 (September 2014): 1073-1094.

11. A.C. Edmondson, “The Fearless Organization: Creating Psychological Safety in the Workplace for Learning, Innovation, and Growth” (Hoboken, New Jersey: John Wiley & Sons, 2018).

12. Vasel, “The Dark Side.” This tendency is also seen in social media, where depression and self-blame can occur when connections to others are high but fulfilling relationships are not. A. Walton, “6 Ways Social Media Affects Our Mental Health,” Forbes, June 30, 2017, www.forbes.com.

13. S. Wright and A. Silard, “Unravelling the Antecedents of Loneliness in the Workplace,” Human Relations OnlineFirst, Feb. 21, 2020, https://journals.sagepub.com.

14. See, for example, G.W. Marshall, C.E. Michaels, and J.P. Mulki, “Workplace Isolation: Exploring the Construct and Its Measurement,” Psychology & Marketing 24, no. 3 (March 2007): 195-223; and D.W. Russell, “UCLA Loneliness Scale (Version 3): Reliability, Validity, and Factor Structure,” Journal of Personality Assessment 66, no. 1 (1996): 20-40.

15. J. Wimmer, J. Backmann, M. Hoegl, et al., “Spread Thin? The Cognitive Demands of Multiple Team Membership in Daily Work Life,” LMU-ILO working paper, Munich, Germany, 2017.

Image courtesy of Jing Jing Tsong/theispot.com

The COVID-19 pandemic put professionals in a box — a virtual one. Overnight, managers and their teams shifted from in-person brainstorming and ideation sessions to those taking place electronically via Zoom, WebEx, and other tools.

You might assume that major changes in how we work are taking a large toll on business creativity, in light of the loss of more spontaneous face-to-face connections and interactions. One of my most outspoken executive students — a young, data-driven manager at a technology consulting company — seemed to be making that assumption when he asked how I thought virtual work “thwarted” creative processes like those his teams engage in with their clients, such as defining problem scope, exploring solutions, prototyping, and testing. My answer surprised him: Based on research I and others have conducted over the past couple of decades, I believe that the shift to remote work actually has the potential to improve group creativity and ideation, despite diminished in-person communication.1

Remembering What Really Drives Creativity

Scholars define creativity as the production of novel and useful ideas.2 Novel, in this context, means statistically rare and unique; useful means that some stakeholders see practical value in the ideas. In business, innovation is the realization of creative ideas as products and services. Think of the creative process like a river, starting with the upstream generation of ideas, often seemingly outlandish ones; proceeding to the testing and refinement of certain ideas midstream; and eventually moving downstream to the full development of chosen ideas.3

Virtual collaboration needn’t hinder any of that, nor is it at odds with the following well-established ideas about what drives creativity.

Creative ability isn’t fixed or inborn. Creativity is influenced by factors under one’s control. In one study, for example, some participants were told that raw talent and ability determine creative outcomes, while others heard that factors such as motivation and persistence drive creativity.4 Both groups then completed a creativity task scored by judges who didn’t know what participants had been told. The group that believed creativity was under their control significantly outperformed the other. The conclusion from many such studies is that mindset matters. And you don’t need to collaborate in person to embrace a proactive mindset about creativity — you can do that independently, from anywhere.

Individuals are more creative than groups. When I ask business leaders in executive workshops who is more creative, groups or individuals, almost no one chooses individuals. It’s widely believed that synergy among group members generates more creativity than individuals can. But virtually no research supports this. In fact, most studies have found that “per capita” creativity declines precipitously as group size increases.5 Group dynamics can actually diminish overall creativity by stifling certain voices while amplifying others. In contrast to in-person meetings, where people tend to engage in simultaneous cross talk, virtual meetings make it nearly impossible for more than one person to speak at once. We’re forced to focus on individual input, so it’s easier for less vocal participants to be heard than in the physical world, where they’re often drowned out. That addresses at least part of the challenge of having all voices represented and heard in creative meetings.

Constraints spark creative thinking. Working within limits pushes us to solve problems in ways we wouldn’t if given free rein. For example, financial restrictions activate a tendency to think “big picture” and then trim down rather than follow a more organic idea-generation process that can result in a larger price tag.6 And time pressure often prods more-efficient idea generation.7 Moreover, imposing communication rules, such as “do not explain ideas,” increases creative-idea generation — and groups that are interrupted with brief breaks produce more ideas, as do those that engage in electronic brainstorming (considered more constrained than in-person free-for-alls).8

Overall, virtual meeting platforms impose more constraints on communication and collaboration than face-to-face settings. For instance, with the press of a button, virtual meeting facilitators can control the size of breakout groups and enforce time constraints; only one person can speak intelligibly at a time; nonverbal signals, particularly those below the shoulders, are diminished; “seating arrangements” are assigned by the platform, not by individuals; and visual access to others may be limited by the size of each participant’s screen. Such environmental restrictions are likely to stretch participants beyond their usual ways of thinking, boosting creativity.

How to Enhance Virtual-Group Creativity

If virtual collaboration doesn’t kill creativity — and can actually boost it — how can teams maximize that upside? Here are some practical suggestions, drawn from the broad body of research on creativity and innovation. These ideas are useful for in-person collaborations, too, but given that virtual business meetings are now ubiquitous and in many organizations have replaced face-to-face conversations, we’ll focus on the benefits of these tactics for remote creativity.

1. Prevent production blocking. As noted earlier, social scientists have long known that individuals are better than groups at creative-idea generation. Classic meta-analyses suggest that’s true regarding the quantity and quality of ideas, as do recent empirical works. Studies have carefully compared the performance of people working independently with that of interactive groups, measuring per-person productivity (typically as creative production percent, based on the volume of ideas per person) and quality of ideas (assessed by independent experts blind to participant identities and experimental hypotheses) over a fixed period. Inevitably, individuals outperform groups.

Several social-psychological factors drive this consistent result.9 A primary one is production blocking, or anything that interferes with a person’s focus on creative-idea generation, including subtle factors.10 One is conversation itself, which involves having to listen to others politely. Working remotely requires less of this. With less pressure for constant conversational engagement in virtual communication, people can more easily focus on generating ideas. Even so, there’s still a performance aspect to virtual collaboration, with everyone’s face on display; people may expend energy managing how they come across. Take steps to minimize that source of production blocking, such as by reserving large blocks of time for individual work, away from the shared screen.

2. Crush conformity. Excessive like-mindedness destroys creativity. Such conformity occurs when people believe that they must aim behavior at winning their group’s acceptance. Fortunately, virtual collaboration involves less pressure to conform. That’s partly because the group is less immediately present than in-person groups (yielding fewer cues about acceptance, such as eye contact only among certain members), and partly because of the online disinhibition effect, or the idea that people are more likely to express themselves and not worry about getting others to like them when interacting digitally.11 It’s true that virtual collaborators are often fully visible to one another and can’t “hide” behind text-only forms of communication like email. However, the disinhibition effect still exerts influence, since many of the politeness rituals of in-person communication, such as vocalizing agreement and engaging in small talk, are no longer present.

3. Facilitate idea expression through brainwriting. Brainwriting is the more sophisticated cousin of brainstorming. In brainstorming, people throw out ideas in a free-for-all manner, ideally refraining from criticism; the belief is that off-the-cuff ideas might spark truly innovative ones. One problem with brainstorming is that people often self-censor out of concern about the group’s response, as I noted above regarding conformity. And even when individuals are willing to speak up, they may not get the floor, given the chaotic flurry of ideas being shared.

Brainwriting resolves these issues through the simultaneous generation of ideas by individual group members. The group sets aside time for individuals to write down ideas; afterward, they come together to discuss them. But when it’s time to share, in-person settings still induce self-censorship and the impulse to be “too nice” in assessing others’ ideas. Virtual communication is ideal for brainwriting, because participants can anonymously contribute to a common virtual whiteboard or shared document without significant group influence. And when they meet to discuss ideas, doing so virtually helps them express their opinions more honestly (again, because of fewer group-acceptance cues).

4. Preempt insider-outsider bias. Research suggests that people evaluate ideas from colleagues more harshly than those from outsiders, particularly competitors.12 They may feel compelled to devalue colleagues’ ideas partly because they fear that the advancement of ideas by group members will lead to their own loss of status within the organization. One solution is to anonymize ideas so that each one can be evaluated independently of its source. In a face-to-face meeting, however, this can be very difficult, especially when ideas are shared on the spot. But the same virtual-communication principle that applies to brainwriting applies here: Digital tools enable people to contribute ideas from a safer distance, without revealing authorship, thus mitigating insider-outsider bias.

5. Promote high-construal thinking. Research indicates that low-construal thinking results in less creativity than the high-construal variety.13 Think of low- and high-construal as degrees of focus of a camera lens: Low-construal thinking, like a telephoto lens, emphasizes details; high-construal thinking, the wide-angle lens, captures the bigger picture.

One study found that people think of more creative ideas when they believe they are interacting with someone at a greater physical distance, because this activates higher-construal thought processes (big-picture focus and abstract thinking).14 Virtual communication inherently involves the perception of greater distance than in-person interactions. You can enhance this by asking each virtual meeting participant to announce their location: “Hello, this is Juliana from Panama,” and so on.

6. Foster diverse interactions. My research with psychology professor Hoon-Seok Choi at Sungkyunkwan University suggests that the presence of a single newcomer can stimulate group creativity, yielding a larger number and variety of ideas.15 In general, diversity enhances the creative process. Yet in a typical face-to-face meeting, people sit by their friends and colleagues, often engaging in sidebars or shared nonverbal interactions, which have the unintended consequence of promoting conformity and narrowing creative focus. In a virtual meeting, you can’t choose your seat, and having sidebar conversations is not nearly as tempting, given the shared screen and risk of accidentally messaging a private thought to everyone. Moreover, the group-breakout function defaults to sorting people randomly. These factors make it more likely that people in virtual settings will interact with participants they don’t know well, boosting creativity.

7. Keep idea vaults and boneyards. Pre-COVID-19, many in-person brainstorming meetings were not recorded, erasing any trace of discarded ideas. That fails to maximize group output, because returning to ideas that were previously suggested increases group performance.16 Why? Silence is the biggest killer of creative-idea generation; giving voice to ideas (even old ones) spurs new insights. Luckily, chat windows, electronic whiteboards, and other virtual-collaboration tools serve as vaults and “boneyards,” memorializing sessions and making it easier to revisit previously overlooked ideas.

None of this is to suggest that virtual communication is a cure-all for addressing creative-collaboration issues, or that managers and their teams should aim to work in their own “lighthouses” whenever possible, shunning face-to-face contact. However, virtual collaboration does provide benefits that many of us didn’t realize or pursue in pre-COVID-19 times. Our creative output may be all the better for it.

Culture is all-encompassing. It radiates through every action taken inside an organization — including deciding what is made and sold, which employees are hired and retained, which customers are serviced and how, what is measured and reported, and where time and money are invested.

However, while some leaders strive to create tomorrow’s cultural norms using advanced technologies, others resist cultural changes and stick to their knitting. The result is a growing chasm between winners and losers. For example, today’s trillion-dollar behemoths are all technology-based organizations that take advantage of mobile technology, data, multiple revenue streams, and AI strategies. They are led by leaders who want to change the world, while the companies that held the top spots of growth and value just two decades ago — banks, oil companies, real estate companies, and manufacturers — are paying the price for holding on to their historical cultural beliefs.

A good example of what’s at stake is the emergence of electric vehicles and Tesla’s rise to prominence as the most valuable car company in the world. In the companies that Tesla has surpassed, boards and leaders have resisted adapting to new cultural and technological realities. It’s not that the emerging cultural norms about the advantages of embracing modern business models have been unclear. It’s that while culture provides the foundation for organizational and industry stability, it is also the force that keeps leaders stuck in their old ways of conducting business. The takeaways from this story apply to every industry.

Leaders who are serious about creating the organizations of tomorrow have a simple choice: They can stay with the cultural norms that created their prior success, or they can do the hard work to change themselves to ensure success in the future. Today’s leaders need to take a personal journey to avoid the fate that has befallen companies such as Blockbuster, Kodak, Sears, and so many others, and it starts with three steps: examining personal values in order to redefine them, communicating the new values widely, and measuring what matters — the performance of the new initiatives and investments that are necessary.

While culture provides the foundation for organizational and industry stability, it is also the force that keeps leaders stuck in their old ways of conducting business.

Leaders: Change Yourself to Change Your Culture

Cultural norms are deeply held beliefs about the way an organization should work. These norms translate into different cultural products throughout the company, including values, customs, and traditions. Said differently, cultural norms define an organization as well as its sources of growth and value.

For example:

• If leaders believe in manufacturing, they make things and measure units produced.
• If leaders believe in services, they deliver support and measure hours billed.
• If leaders believe in analytics and AI, they measure data collected and insights generated.

But new technologies — coupled with consumers’ changing wants and needs — disrupt legacy beliefs. Twenty years ago, most leaders would have said they believed that making things was more important than matching buyers and sellers. That core belief has been shaken to its core, of course, as subscription and marketplace models powered by data and AI began to fuel the most powerful companies in the world today — Amazon (with Prime and its massive supplier network), Apple (with its iOS developer community), Facebook (with its billions of users), and Google (with its search and matching algorithms). Further, external forces like the COVID-19 pandemic can accelerate the demise of traditionally held norms and make those who are best prepared for the future the winners of today (such as Zoom, Shopify, and Spotify).

Three Steps Toward Change

If leaders are itching to change their corporate culture and direction, we recommend that they first follow three steps to challenge their own biases:

Step 1: Leaders need to examine their thoughts and values in order to redefine them. Attempts to change an organization’s strategy, products, services, measurements, or reporting will be in vain if leaders don’t realize that cultural change is an inside job. Leaders have to change first.

Take Ford, for example. Along with other car manufacturers, Ford has finally decided to enter the electric car race. However, for Ford to catch Tesla, its leaders need to let go of the company’s rigid traditional management practices that made it successful. That’s the only way Ford will be able to compete for customers as other U.S. states join California in prohibiting the sale of internal combustion vehicles and, in so doing, create the new cultural norms for the industry. This is in stark contrast to the days when Henry Ford started his business and became the cultural trendsetter.

Before they look at their products, people, and processes, leaders have to better understand their own underlying attitudes, behaviors, and beliefs. Only by challenging and changing core beliefs can leaders consistently act in ways that support a true business model transformation.

Step 2: Leaders need to communicate their new identity. Clearly defining the values that management and the board hold should help an organization create today’s newest business model: AI-powered digital platforms with multisided revenue models. Doing this requires that they discourage existing employees from keeping their heads down and proceeding with business as usual.

A stunning example is today’s colleges. For a long time, universities’ leaders resisted restructuring their business model — by sticking to a primarily on-premises structure despite its cost to students, limits on access, and restricted extensibility. COVID-19 is forcing a sea change: This fall, at least 65% of higher-learning institutions are holding classes completely or partly online, according to the College Crisis Initiative at Davidson College. The astonishingly fast shift to digital classes will drive down the per-student cost of traditional instruction if it sticks as the pandemic wanes. Colleges and universities will need to rethink their identities and the new value they are proposing to justify their high price tags. This work should include examining how data and AI can be leveraged to reinvent the college experience.

Company employees, customers, investors, and lenders all need to understand a leader’s new belief system before they will be ready and willing to align their actions. Only by overcommunicating can leaders ensure that their new belief system is accepted and embraced.

Step 3: Leaders need to measure the impact of new cultural norms on the company’s performance. To truly transform, leaders must identify new key performance indicators that link to their company’s emerging new identity and track and report them. If you don’t measure it, you won’t manage it, nor will you value it. Leaders and boards that continue measuring the same things they have always measured and valued will end up with what they already have — a slow-moving legacy business. But if they do want change to stick, they will need to follow up with adjusted compensation and rewards.

For example, Blockbuster measured brick-and-mortar stores and individual video rentals, while Netflix measured and built subscriptions (first with a physical product and then, explosively, through a digital platform). John Antioco, former CEO of Blockbuster, recognized the importance of heavily investing in a digital platform. But at the first hint of unprofitability during this investment in the transformation of his company, the board and investors quickly reverted to their old beliefs about what creates value and where to allocate dollars, and Antioco was ousted. Within a few years, Blockbuster declared bankruptcy.

Leaders often fail to change what they measure, manage, and report, hoping that somehow those parts of the system will be OK while the rest of the organization changes. But the best thing leaders can do to change behaviors is to change what is measured, managed, and reported.

Change Your Leadership Culture — or Your Leaders

Organizational culture has a strong impact on the efforts of an organization trying to adopt big data, machine learning, and network-based business models to catch up with today’s leading companies. The reinforcing loop — culture — is the foundation of that race. If leaders truly want to derive meaningful business benefits from analytics and platform models, they must proactively address their own core identities before trying to introduce large-scale transformation initiatives.

Most leaders simply don’t want to put in the work and examine their core beliefs, and neither do their boards. The fear is that they will become destabilized. As a result, both leaders and boards make short-term decisions to remain aligned with legacy industry norms that in the long run lead to their demise. Consequently, sometimes the only way out is to replace leaders, including the board (and, potentially, investors, too).

To paraphrase famed U.S. baseball manager Yogi Berra: You’ve got to be careful if you don’t know where you’re going, let alone what you stand for. Otherwise you might not get there.

The COVID-19 crisis began in March in the United States and shows no signs of letting up. Globally, some organizations are adapting and holding their own. Some have been hit very, very hard. Most leaders are struggling to prepare for what could come next and to keep their teams engaged and moving forward.

In this webinar, leadership preparedness expert and MIT SMR author Eric J. McNulty offers strategies for adaptation, resilience, and building trust in a time of vast uncertainty.