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Empower Your Team Through Servant Leadership

Servant Leadership is fast-becoming a prominent leadership style, and for good reason: It tends to increase trust and collaboration among team members, helps to build coalitions and community, and promotes ethical business practices.

While many leaders use the power of their position to direct and control employees, the servant leader listens; her focus is on understanding employees to develop and support them. Servant leaders flip the traditional relationship between the employee and the leader, fostering a strong service culture by empowering and involving workers.

As part of the eCornell Entrepreneurship webinar series, Judi Brownell from Cornell’s School of Hotel Administration joined Chris Wofford for a interactive discussion on how servant leadership can transform your organization to one that is service-centered and culturally inclusive.

An abridged version of their conversation follows.

Wofford: Judi, we previously had a great conversation about the art of listening as it relates to leadership (((link to previous transcript))). Today we’re going to be covering the concept of servant leadership. What is that? It sounds like a response to a top-down leadership style.

Brownell: Well, servant leadership is relatively recent. The term was coined at some point in the early 1970s, but it was only recently that it became a truly prominent leadership style. What happens in servant leadership is that the follower experience really changes. Instead of followers taking a backseat and looking to a leader as the one who knows everything, servant leadership really puts the power front and center.

A servant leader follows a philosophy of service. A servant leader needs to believe that his or her role is really to serve, and they get satisfaction and gratification out of that type of behavior.

Wofford: I don’t want to preempt something you plan to talk about later, but does gender figure into this?

Brownell: It’s fine to talk about it now. I’ve done a lot of work with women’s career development and I do believe that men and women have different sets of competencies that come naturally to them. There are some people who would disagree, but men tend to be more assertive and more readily authoritative. Women tend to be better listeners. Women tend to be more emphatic.

The servant leader has a lot of characteristics that have always been associated with women’s leadership style. The wonderful thing is that, where in the past these characteristics may have been associated with weakness or pointed to as reasons why women are less effective, now the pendulum has swung and these same characteristics fit perfectly with the philosophy of servant leadership.

Wofford: And what’s at the heart of that philosophy?

Brownell: Servant leadership empowers followers. Rather than telling them what to do, and giving them a little bit of training here and there, servant leadership is about really developing your employees, really sitting down with them and asking, “What is it that you need to do your job better?”

It’s about looking at each employee as individually as possible. I believe that the opportunity to do this exists in most organizations. It could be as simply as just sitting down with people and asking, “Are you happy at your job? What is it that I can do as a leader to help?”

A leader presumably has more access to more resources and can perhaps shift an employee to a better position or cross-train them or whatever it is that they need to be happier and more effective in their work.

Wofford: We’ve got a good question here from Karen. She writes: “Yes, the servant leadership style may be more like a ‘woman’s style’ but in my experience (and I think research backs this up) men’s style of leadership includes a mentoring skill, whereas it is harder to find women leaders who mentor other females up the ranks.” Judi, any thoughts on that?

Brownell: Yeah, I’ve got lot of thoughts on that. I did a lot of work on that particular problem, in fact. This is really digressing from our main topic, but it’s interesting. I did a study asking women coming out of an MBA program whether they thought they would be as effective as men in a leadership role. They all said yes.

Then I asked them if they would rather work for men or women, and almost 90 percent of the women said they would rather work for a man than work for a woman. When it comes to mentoring, women either are the very best team ever or they are in conflict with one another, particularly when they are in an organization with very few women and a lot of men.

We need women mentoring women and we need women being advocates for women. And I think there are a lot of women out there who are great mentors – we just need to expand that pool. I think if organizations can build women’s confidence, then they will do a lot more to mentor other women.

Wofford: You said that was a bit of a digression. Where were you planning to go?

Brownell: I wanted to talk about the importance of compassion in the workplace. If you’re a servant leader and you really listen well to your employees and to your colleagues, it really does start a very positive chain reaction. People will see you as a role model and then they too will begin to also listen and be more compassionate in the workplace. Satisfaction at work really escalates when people feel like they are friends. There was a time when employers didn’t want their workers to be their friends because they thought the employees wouldn’t be as productive, but actually we’re finding that almost the opposite is true. The feeling that you’re surrounded by people who care about you makes a huge difference in how we feel about the workplace.

Wofford: Still, from an employer’s standpoint it’s a lot harder to fire someone you’ve become friends with.

Brownell: Yeah, well that’s true. It is harder to fire a friend, for sure. But I’m not talking about friends in the sense that you go bowling together after work. I mean a friend more in the sense of caring about someone because you know a little about them and they know a little about you. But your point is really well taken because that leads to another really interesting area, which is how close can you be with people that work for you without creating perceptions of preferential treatment or favoritism.

Nevertheless, compassion, empathy and caring is really important for a leader. The servant leader feels that the organization is in their care, so they care about its people and everything in it in a way that’s somewhat different than a leader who feels like they own the organization and that they’re driving it in whatever direction they want.

Another thing that I think is really interesting that characterizes the servant leader is self knowledge. I think often we’re so caught up in the actual doing – do this, do that, have this meeting, manage that project – that to have someone who is able to sit back and be introspective is a real treat.

You know, people are taught to talk, talk, talk but no one ever teaches anyone to really listen. Yet, to make good decisions you really need to gather information. Listening is really important to servant leaders. Not only that they’re listening but that people are able to see that they’re listening. Empowering employees and caring about them means paying attention to them.

I think the things that the servant leader focuses on are a little bit different. It’s more people-centric. It’s not that servant leaders are weak. They’re not weak at all. They’re very courageous in how they are honest and caring in the organization.

Wofford: It’s much more about making the best decisions even when they very well might be unpopular, right? Ultimately, the idea is to serve your vocation, right?

Brownell: Right, and being forthright with the information – some good, some bad – about what was done and what decisions were made. I think the whole transparency theme in organizations is important, and I think the servant leader facilitates that.

Wofford: We’ve got another great question from Karen here: “What about when servant leadership bites you in the butt? I tried to practice servant leadership but it comes back to bite me sometimes. Too much empathy, in particular, bites me.” What do you say to that?

Brownell: Empathy should be about recognizing someone else’s position and feeling how it affects them, but the consequences still need to be there. You know, if a student comes to me and says, “Oh I was trying to print and my printer broke down and that is why I’m a day late.” That’s when I say, “I understand that this happened and I’m sorry, but I’m still not giving you credit.”

Empathy is just indicating to the individual that you have in fact heard them, you understand how it could happen and you appreciate that they came to you and explained. But you still have a goal to reach. You still have a policy to meet. So empathy does not mean allowing people to slack off.

Rather than telling people what to do, servant leaders use persuasion whenever possible. This gets people sincerely on board and fosters ethical practices. Ethics have been a real big concern of mine. Sometimes we assume that someone is unethical when actually they haven’t even recognized that there was an ethical issue or an ethical component to what they were doing. They haven’t necessarily considered how their decision affects other people. So modeling ethical practices and being vocal about them are other important aspects of servant leadership.

Wofford: This also ties in to the self-reflection you mentioned earlier, right?

Brownell: That’s right and I think that self-reflection is actually a neglected leadership behavior and yet, if you read about really powerful leaders in various types of industries, almost without exception they mention how important it is to just sit back and kind of think about yourself and your own goals and what’s important to you, what you value, your strengths and weaknesses.

One of the things that a leader needs to do is to have what we call behavioral integrity, which means behaving in a way that corresponds with what they say. If I say I value being healthy but the bowl of M&Ms on my desk is the only thing I have for lunch, that is not displaying behavioral integrity. I think leaders should reflect on whether their actions back up their words.

Another thing to explore is who you become as a leader. One of the transformative things that I’ve been taking a look at is what being a leader does to one’s sense of self. There is this view that power corrupts, and I think servant leadership really helps prevent that.

I think self-reflection, no matter what position you’re in, is really important in the end. Sometimes it may have been so long since you last gave yourself the freedom to really think in these terms that it can be hard to know where to begin. One way to begin is to take some key themes and write down your own self-perceptions and then have someone else tell you what they think about you in those areas.

Wofford: And the servant leader is not only providing this sort of self feedback, they are also providing supportive feedback to their employees, right?

Brownell: It’s really about empowerment. As you empower someone, it implies that you trust them because you’re taking the time to coach them and mentor them. You’re giving them feedback, which is a sign that you care about them and how they are doing. You’re observing and helping them perform even better.

That then increases trust because as a leader you are basically saying, “I’m sure you’re not going to do it exactly the way that I would do it, but I trust that you understand the values and the goals and I trust that you are doing the best you can on behalf of the organization.”

Employees really take off when they feel like someone’s supporting them and that they can be instrumental in the organization’s success.

Wofford: Judi, thank you so much for this introduction to servant leadership.

Brownell: Thank you, Chris. It was nice to join you again.

Want to hear more? This interview is based on Judi Brownell’s live eCornell WebSeries event, Empower Your Team Through Servant Leadership. Subscribe now to gain access to a recording of this event and other Hospitality topics.

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How to Develop Your Personal Brand (And Live Up to It)

What adjectives would you use to describe yourself? Would your coworkers, friends and families use the same terms?

Pamela Stepp, who teaches leadership assessment at Cornell’s ILR School, joined eCornell’s Chris Wofford for a WebCast focusing on how to develop a personal leadership brand and ensure that you continue to live up it.

Wofford: I’m very excited to have you here with us, Pamela.

Stepp: Thank you Chris, and thanks to everyone who is tuning in. This is all about you.

I want to start by asking everyone watching to think about who you are as a professional and who you want to be.

I’m going to walk you through the steps to create your own personal leadership brand and then help you come up with a story that you can tell that will demonstrate that brand.

Wofford: That sounds great. I think our audience will really get something out of this. Where should we start?

Stepp: Power is very important to consider when you are developing your personal leadership brand. You need to think about how you present yourself powerfully in an organization and how to recognize if someone is powerful or powerless. A good way to start thinking about this is to choose a person—this could be anybody in the world—who you think is powerful. Think about the characteristics of that person and what helps them be powerful and write down this person’s leadership brand in one sentence.

Chris, let’s use you for an example. Who did you think of?

Wofford: The first person that came to my mind was Bob Dylan. And the adjectives I used to describe him were mysterious, direct, and honest.

Stepp: Isn’t that amazing how fast you could come up with these clear traits? Let’s turn to the audience members. Someone has chosen Oprah Winfrey, saying she is credible, empathetic, driven, and relatable. Does that sound like Oprah? I certainly think so. Another has chosen Barack Obama and described him as gentle, straightforward, and clear-speaking. So we can see that it’s quite easy to identify the personal brands of well-known leaders.

Now let’s move on to thinking about our own personal branding. What makes you different? What adjectives would you choose to describe this brand called “you”?

Wofford: Wow, the answers from our viewers are coming in very quickly. Maureen says she’s organized. Darius, passionate. Marcelo, accountable. Rebeka says she’s driven and has great attention to detail. Carol says she leads and inspires.

Stepp: I can see more results are still coming in, but now I want you to come up with your most noteworthy traits and values. It’s important to remember that your values change at different stages in your life, so I want you to come up with examples of your current value, either personal or professional.

Wofford: Some of the answers coming in include curiosity, family, integrity, honesty, kindness, empathy. These are great examples from our audience.

Stepp: Yes they are. Now I’m going to give you an example of two short descriptions of the leadership brand that I use. I teach at universities and business schools all over the world and one of the brands that I use—and I want people to let me know if I’m living up to this —is that I want to be known for being a knowledgeable and inclusive leadership educator who demonstrates her passion for the subject and genuinely cares about helping her participants or students to grow into the best leaders that they can be.

So that’s the personal brand I have when I’m giving these sorts of talks. I had a different brand when I was a full time businesswoman as the managing director at the Center for Advanced Human Resource Studies. There, I wanted to be known for being a knowledgeable and open-minded business leader who used her confidence, determination, and networking ability to help the center grow into a more global organization.

So that’s how I’ve used my values to create personal branding.

Wofford: Pamela, I’m just going to play devil’s advocate for a moment and ask what the point is in using these words to describe yourself. In your case, you say you’re inclusive, knowledgeable, and dedicated to making sure that people get results out of your talks. Isn’t this just an example of putting your best foot forward? Does it really help one’s leadership ability to go through this sort of exercise?

Stepp: It does, and that’s because once you’ve established your leadership brand, you want to live up to it. It helps keep things clear in your mind and remind you whether or not you’re living up to the way you’ve described yourself and the way you want others to see you. Does that answer your question?

Wofford: It does. You’re saying we’re always a work in progress and that developing a personal brand helps bring focus to our careers and our professional lives.

Stepp: That’s right. It helps us focus on the traits that we want to be known for. Some examples coming in from the audience include inspirational, politically savvy, collaborative, innovative, results driven, strategic.

Then you start to refine those and work toward finding your identity by combining those descriptors. For example, “I’m a strategic innovator who gets things done.” You want to construct your leadership brand statement by putting everything together, all those adjectives and values.

Then you need to start asking other people what they think your brand is because it will surprise you. Make your brand identity real by checking in with others around you. Are you living up to that brand? That’s the beauty of having a defined leadership brand. You can always check in to make sure you are living up to it.

Wofford: So is your recommendation to go to other people and ask them how they’d describe you?

Stepp: Absolutely. You’ve got to keep reminding yourself of your brand and keep asking others if you’re living up to it. For example, I teach undergrads at the university because I want to prepare 20 year olds for leadership and because I want to know that generation. I started writing about being an inclusive leader and when I get evaluations back at the end of the semester, I can see that inclusion is my highest score. That really inspires me to keep working on that and to make sure everybody participates, to make sure I’m including international students who maybe aren’t speaking English all that well, making sure that there aren’t gender imbalances in who I reach. The point is, you can gain confidence if you learn that you are living up to your brand. And if you’re not living up to it, you have to know that. My brand is the yardstick by which I measure myself.

Wofford: We invite you to take a minute and see if you can come up with your own personal brand statement. Don’t overthink it. This is just an exercise and something that hopefully you’ll continue to work on.

OK, we have some responses. Deborah says “I’m a mentor. Helping others is what I enjoy best.” Steve has a great one: “I’m an innovator who pushes the creative envelope by inspiring others to do the same.” Crystal says, “I’m an innovative, compassionate, and knowledgeable leader with a desire to help others become the best that they can possibly be.” I think people are getting there, right Pamela?

Stepp: Yes, you are all doing a great job. These are good examples of leadership brand statements. You can refine and change them, but they shouldn’t be long diatribes. It should just be a paragraph, so these are really well done.

Once you have that brand, it’s time to think about storytelling. It’s always helpful to demonstrate your brand through stories, whether you’re standing up in front of an audience or if you’re at a cocktail party or even just with your friends. When done well, a compelling story can inspire our beliefs and our motivation to reach a goal. So I recommend that you all think of a story that you enjoy telling and think about how you can use that in the workplace.

I also want you to think about nonverbal power. When you walk into a room, you want to stand up straight and have good eye contact.With nonverbal power, you want to express competence. You want to express trustworthiness, dynamism, energy. When you talk, you want to be sure to think about using a proper voice, making eye contact and scanning the whole room.

Another huge thing is that when you are speaking with someone, you need to take the effort to learn their name, maintain eye contact, and make them feel you are focused on them. I’ve always found that amongst the people that I admire, their leadership ability is to make you feel like you’re the only person in the room.

Wofford: Pamela, thanks so much for joining us. I’m excited to get my storytelling ability dialed in and I hope that those in the audience will start working on their personal leadership brand one-sentence mantras as well.

Stepp: Thanks so much for having me.

 

Want to hear more? This interview is based on Pamela Stepp’s live eCornell WebSeries event, How to Develop a Personal Leadership Brand. Subscribe now to gain access to a recording of this event and other Women in Leadership topics. 

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Legal Issues That Can Affect the Value of Your Business

Laying proper legal groundwork might not be the sexiest aspect of a startup venture. But a failure to adequately address legal issues has real potential to negatively affect the value of your business down the road.

That’s why Rhonda Carniol, a partner at CSG Law, recommends getting a legal footing established for your company from the very outset.

As part of eCornell’s Entrepreneurship webinar series, Carniol joined Chris Wofford for a wide-ranging discussion of the legal issues that can affect startups. What follows is an abridged version of their conversation.

Wofford: Thanks for joining us, Rhonda. Could you start by telling us a bit about some of the work you do?

Carniol: Thanks, Chris. As a partner at CSG Law, I represent entrepreneurs from startup to exit. I find with my clients that it’s very important for their legal counsel to get an in-depth understanding of their business so they can advise them as to what sort of things they have to address that could really affect their business.

Wofford: Ideally you’d want to hit these people as they’re in the early phases of business development, right? Getting yourself legally established seems like kind of a no-brainer and maybe the first thing you should think about doing. On the other hand, it’s never too late, right?

Carniol: That’s so right. It’s never too late. The most important thing is to get yourself in great shape legally before you try to sell your business. It’s easier in the beginning, but even if you’ve been up and running for four or five years, I still think the things we’re going to discuss today are going to be helpful.

I’d like to start by talking about what makes a business valuable. For example, you’re solving a problem or you’re adding something new and innovative into the market. If you have something valuable, you need to protect your intellectual property. You also need to think about limiting your liability to your vendors or your customers. Additionally, you want to avoid disputes with your co-owners, your employees and your contractors. These conflicts take up time and energy.

The first thing to really talk about is protecting your personal assets. If you’re currently operating a business in your own name, you need to immediately stop. Why? Because your personal assets are at risk. But if you form a corporate entity, like a subchapter S corporation or an LLC, then your personal assets, in most instances, would not be at risk except for in fraud situations.

What type of entity should you form? Well, there are several choices. There’s a limited liability company, a subchapter S, a C corporation, and a benefit corporation. A limited liability corporation is usually what most people choose when doing a startup because it has the most flexibility. Owners of the company don’t have to be individuals and it’s easy to bring investors into the mix. It also has tax benefits because it’s a flow-through, unlike a C corporation.

Sometimes you might instead choose to form a subchapter S corporation. There are less expenses involved but it’s taxed the same way as an LLC. The hot new thing is a benefit corporation, in which you’re supposed to do something good for the community or for your customers or the environment. The problem with that is there are a lot of filing requirements and recordkeeping, so I find that most of my clients, although they may want to do good with their companies, don’t want to be bothered with that.

Wofford: How is a benefit corporation different from a 501(c)(3) nonprofit?

Carniol: Well, a benefit corporation is still being formed to make profits. But they can sacrifice some of those profits in order to do good. A nonprofit, of course, is not out to make a profit. So it’s a different type of entity.

Wofford: Okay, got it.

Carniol: What I really recommend is to get an agreement in place right away between the owners if there are multiple owners involved. As soon as possible. In an LLC, this would be called an operating agreement. In a corporation, it would be a shareholders agreement.

A lot of people say, “I don’t need an agreement. I worked with Tim for 20 years. We love each other.” Well, let me share a story. I recently represented someone who had worked with their co-owners for 10 years in various corporations. They waited a year and a half after they started a new business to do an agreement. They were almost ready to launch when they discovered that they had a lot of disagreements, even over how much of the business each person should own. So the cost to them was significantly higher than if they had sat down in the beginning and had the discussion initially. The thing that made them finally come to a decision was everyone’s worst nightmare, which was the creditors of the company coming forward and saying, “We’re going to put you in bankruptcy. You’re not paying your bills.” That’s not a situation I want to see anyone in. You need to sit down in the beginning, find out if you have any differences, find out if your visions are the same, and enter into an agreement.

I often see situations in which a company is about to be sold and it comes out that the assets of the company aren’t in the company’s name. Instead, they’re in the original owner’s name. This is a major problem. The assets then have to be transferred into the company and they may have significant value at this point and therefore pose tax issues.

Another messy situation can arise in a multi-owner deal. If one person owns the patent, for example, then that individual has considerable negotiating power going into any deal – much more than the other owners. The easiest way to avoid these things is to move your assets over to the company at the outset. If you’ve already started a business and your assets aren’t with the company, move them over now.

Wofford: This goes back to your earlier point about doing all you can to avoid disputes.

Carniol: Exactly. That’s also why I can’t stress enough the value of a contract.

You should also always have a contract with your independent contractors that includes enforceable ownership language and confidentiality protections. You want to protect your customer list, your contacts, your vendors, your unique processes and your way of providing products. If you don’t have a confidentiality agreement, these things could skip right out the door with an independent contractor or a departing employee.

Wofford: Are these contracts something that should be drawn up by individuals? Do they need to involve highly complex legal language? Would you craft an NDA, for instance, without legal counsel?

Carniol: I know there are templates online, but you should not have an NDA without legal counsel. This is a really inexpensive document for your lawyer to draft. They will draft it geared to what’s important for your business. I don’t suggest just doing it yourself because you just may not protect what you need to.

Ideally, you should have a separate agreement for your employees and another for your independent contractors. If you’re further along in the process – let’s say a private equity firm is starting to look at you – you will need a different type of confidentiality agreement. Sometimes you’re going to have confidentiality provisions even in your customer agreements. But they won’t be as big as what you put in your independent contractor agreement because you don’t want to scare the customer away.

There are some other things that you might think of putting in the independent contractor agreements. You might include indemnities. If you get sued by a third party because of something the independent contractor did, you want them to step up and indemnify you. Of course, there are things that are standard in the industry so you cannot be too far-reaching, or the vendor is going to tell you to go take a walk.

You may also want to think about including an anti-competition provision. Sometimes this is appropriate and sometimes it is just not. You cannot stop someone from running their business but in some situations, you may want to prohibit them from making the same product as you, at least for a short period. You just need to evaluate it and this is a good time to call a lawyer to find out what the standard in the industry is and what is reasonable.

Wofford: What about contracts and agreements with your own employees?

Carniol: Your employees will probably become your most valuable assets, so you need them to sign confidentiality and ownership agreements. Without an agreement, an employee who conceives of an invention typically owns the patent rights, not the company. So, think about how this is going to look when you try to sell your business or get an investor. The best way to deal with this is to put it in an agreement.

Depending on your particular business, you may also want to consider whether non-competes and non-solicitation agreements are needed with your employees. In some industries, requiring a non-compete would mean you could not successfully hire anyone, but you at least want to establish a non-solicitation of your customers and definitely a non-solicitation of your other employees because this will prevent a group of employees from leaving and forming a competing business.

Since your employees are such valuable assets, you may also want to consider allowing them to have a stake in the success of the company. Consider whether certain employees should have an ownership interest or a phantom interest in the business. This is also something you would definitely need to talk to an attorney about because a lot of it depends on how far along you are in the process of building your business.

Wofford: Obviously, giving employees ownership encourages them to work hard for your company and to remain loyal.

Carniol: Absolutely.

I’d like to now talk a little bit about customer agreements, which are often needed in the business-to-business market and even in the consumer market. In the consumer market, if you have a web platform up, you will usually see an acceptance agreement that most people click without reading. Even though most people won’t read it, you should have an agreement that people must accept in order to do business with you, in order to protect yourself. Of course, the type of agreement you are going to have depends on your product, industry standards and your customer base. It needs to be tailored to your business.

In the business-to-business market, let’s say you are providing software that another company is going to use to operate and it is integral to their business. You want to limit your liability, because one lawsuit could put you out of business before you have even started. You also want to make sure that it is clear that you own everything and you are not giving ownership to the other company.

Another thing that is really important is to clarify payment terms. You have to specify in these agreements when the customer has to pay you. You do not want to have to get into a lawsuit situation as a startup, so having these kinds of provisions is going to help you avoid disputes and litigation.

Wofford: What other legal angles are essential to consider?

Carniol: Once you have your agreements in place, the most important thing is to develop and protect your brand. This is what differentiates you and makes your business unique. The example I like to give is toothpaste because it’s so boring. Even so, most of us have a favorite brand of toothpaste. Everyone has brand loyalty and that’s why you have to take care of your brand. Trademark your name, your logos and your designs. Doing a trademark only costs about $2,000, and it’s money well spent. You don’t want to start operating your business and then have another company come in and say, “Hey, you can’t operate under this name because I’m using it in the same business.” One of the most important things at the outset of starting a business is avoiding disputes.

Wofford: But a $2,000 layout in the early stages might seem like a lot to people, right?

Carniol: Well, a trademark adds value to your business because you own the intellectual property. You now have a name when you go to sell your business or when you’re looking for investors.

If you have the opportunity to do trademarks to protect your business and your assets, it makes your company more valuable when you go to sell because you have something that makes you unique. Plus, if you have a good idea and you’ve got a patent or a copyright or a trade secret, it slows down anybody else who wants to copy your idea.

Of course, not every idea can be protected. Establishing a trade secret isn’t easy because, generally speaking, for a company to be considered the owner of a trade secret, it usually must be shown that the subject matter has economic value. On top of that, you’ve got to use reasonable precautions to maintain the privacy of it. One famous trade secret is the recipe for Coke and they’ve maintained the confidentiality of that forever.

But you can also use contracts to protect the disclosure of confidential information. Ask people to sign a confidentiality agreement. The only time that this is really a problem is when you approach potential investors and venture capital. Often, they will not sign a confidentiality agreement because they hear so many ideas. Once you’re an established company, it’s different. You can get investors in private equity to agree to limited confidentiality agreements.

Wofford: What about the process of establishing copyright?

Carniol: Filing for copyright allows you to seek statutory damages. However, filing copyrights all the time isn’t realistic. If your business is about updating content constantly or you have a lot of content, you’re just not going to do this. It’s going to slow you down. And not everything you create can be copyrighted.

For instance, facts can’t be copyrighted. If you’ve done a lot of research and you’ve accumulated a lot of facts and data, that’s great — but you can’t copyright it.

The next thing I want to talk about is patents. Getting a patent is the most expensive process — it costs more than getting a trademark or a copyright. But again, not every product can be patented. And for those that can, the patent office has to approve it and that is a long process. Even when you get the patent, you can face lawsuits trying to claim that your patent is invalid. In your filing to the Patent Office, you also have to have to publicly disclose much of your invention and a lot of times, you won’t want to do that. You could do that disclosure and not get the patent and then your secret sauce is out there.

Patents also have a limited life. They last between 18 and 20 years. Once the patent’s life is over, you can’t license what you patented anymore and get money for it.

Wofford: That’s a lot to consider.

Carniol: It is, and it all goes back to doing an initial analysis. What is the goal? Do you want your business to go on for 40 years with a product that you can continue to license or is it something you’re constantly going to be innovating and updating?

Wofford: As we wrap up, I want to ask how much legal stuff can be sorted out by individuals on their own or would you always advise people to seek legal counsel one way or another?

Carniol: Yes, I think you should seek legal advice. I’m sure people are going to walk away from this going, “Wow there’s a lot to do. This is going to cost me a fortune.” It’s actually not going to cost that much.

Even if you don’t hire a lawyer, there is a lot of free advice out there from universities and other organizations for startups. There are accelerator programs where you can get free legal advice. Of course I’m biased because I’m a lawyer but I think that when you start out, you should at least have an initial conversation with a lawyer and find out what is important and what isn’t. Then you can spend your dollars wisely and not waste money on things that aren’t important.

Wofford: I think this conversation was very useful to our audience. I appreciate it, Rhonda.

Carniol: Thanks, Chris.

Want to hear more? This article is based on Rhonda Carniol’s live eCornell WebSeries event, Six Legal Issues That Can Affect the Value of Your Business Subscribe now gain access to a recording of this event and other Entrepreneurship topics.

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How to Successfully Pivot Your Startup

The fundraising and engagement platform GiveGab made waves in January 2018 by purchasing one of its biggest national competitors. With the acquisition of Kimbia, GiveGab is one step closer to becoming the biggest charitable software program out there.

But that success would not have happened if the company hadn’t decided to completely change direction from its original vision of being a social network connecting volunteers and nonprofits. In 2015, GiveGab pivoted to focusing on helping nonprofits attract and maintain donors rather than volunteers.

The company’s CEO and co-founder, Charlie Mulligan, spoke with eCornell’s Chris Wofford about his “painful” yet highly successful pivot decision and to share tips on how to decide when it’s the right time to change strategic direction. What follows is an abridged version of Mulligan’s presentation, delivered as part of eCornell’s Entrepreneurship webinar series.

Mulligan: I’ve met thousands of entrepreneurs at this point. I think almost all of them would describe themselves as having a vision of what they want to happen and being very persistent. While I agree that these are really important traits, they can also impact the challenges of pivoting. If you really pride yourself on what you are doing, it can be very hard to have to admit that your vision was wrong. When reality hits, it’s sometimes like you suddenly realize you’re climbing the wrong mountain. It’s not a matter of changing little tactics. You have to change your entire strategy. That’s what a pivot is to me.

When you are starting out, there is really no way to predict the future. Yeah, some people get lucky but for a lot of startups you’ll find that the reality is different than what you envisioned so you’ll have to decide what to do. You can quit or you can be flexible and make a different choice.

Wofford: How do you know when it’s the right time to change direction?

Mulligan: It could come at any stage. When you’re starting out, you have this idea of what the customer wants. Well, you better talk to as many customers as you can and you need to realize that oftentimes you will hear what you want to hear so you have to be very careful and make sure that you start to listen before you get too far down the road. You might have to pivot very early once you’ve assessed the demand and done the research.

The key thing about a startup is a lot of times you’re trying to create something new or completely different, but when you’re doing research, the research is about old products or old ways of thinking. So you won’t really know for sure whether your new way is going to be right.

Wofford I’m sure the audience would love to hear the details of your decision to switch tactics at GiveGab.

Mulligan GiveGab set out to be the social network for volunteers, which meant that we were a connection portal to help volunteers and nonprofits find each other. We interacted with a lot of nonprofits and they were really happy to talk about this. They loved the idea and then as we built our product they thought it was great. We had a free product so we had thousands of nonprofits and hundreds of universities sign on. We passed 100,000, things were growing and moving fast and we were getting great press and great feedback.

But it didn’t take us long to realize that there was really low engagement. Nonprofits would sign up but then only come back like every six months to do something. It was really challenging to get them to actually post volunteer opportunities.

When I first started I thought it was going to be really easy to get nonprofits to post volunteer opportunities because they were consistently telling us that they need more volunteers. But we couldn’t get nonprofits to actually sign in and create volunteer opportunities. That meant that we were having a hard time matching the volunteers who had signed up with opportunities in their area. You know, a volunteer in Montana and a nonprofit in Minnesota don’t really match up.

That’s why we decided to go after universities to help build an ecosystem because a lot of times they have volunteers and nonprofit partnerships. The problem we found there was that it was a super long sale because we were talking to low level employees. We should’ve noticed this problem earlier but if you want to know what a nonprofit really cares about, you need to go see what the executive directors are doing. What the directors are doing is looking for donors, not volunteers.

Raising money is really what mattered the most and we weren’t listening to that. So we decided to go down a new path. We sat down and really looked at what the nonprofits were using their volunteers for. Almost always, the volunteers were being used as a direct or indirect way to get donors. It’s really about money for nonprofits and volunteers are a way to get donors more engaged. One of the things we kept hearing all of the time – and the research backs this up – is that only 19 percent of first-time donors ever come back. Nonprofits spend all of this time getting donors and then four out of five of them are gone and never come back. We were skirting around the edges with volunteering but the core problem was how to get more donors and keep them coming back. So that’s now the problem that we decided to solve.

Wofford How big was your organization when you decided to make this pivot?

Mulligan We had 90 employees and we had a lot of funding. We had dozens of investors and so I had to go back to all of them and admit I was wrong. Then we had to let about half our company go. These were really good employees so that was a very painful day.

For a lot of people, ‘pivot’ is just a word, just a strategic choice. For me, it’s a painful memory. It was necessary and I’m really glad we did it, but it was painful.

We had to totally re-brand. We were the social network for volunteers so we were highlighting happy volunteers and like things like that, which makes no sense for a fundraising platform. So conceptually we had to change everything. Then we had to build it and go back to our development team and say, “Ok, we’re starting from scratch, let’s learn how to do this.”

There are also laws around fundraising so there was a lot of work in just making sure we were doing things the right way.

Wofford That sounds really challenging.

Mulligan It was, but one of the great things about pivoting is that if you’ve built a great team, as we had, then you’ve already figured out how to work well together. In our case, the employees we were left with were great, so we got a second shot at something and the second product looked a million times better than the first product because we really knew what we were doing by that point and we had a system in place.

There’s also a certain amount of incentive in a pivot situation because maybe you’ve run out of money, so you know that this could be your last lifeline. So you better make progress and you better make it quick. There is nothing like the gallows to give people focus.

As an entrepreneur, it can be very challenging because you have told a lot of people about your vision and you’ve been very persistent and then you have to go and tell them, “OK my vision sucks but now I have a new one.” You’re asking people to buy into this new idea even though your first was wrong.

Wofford That must take a certain humility.

Mulligan Sure, and you also have to make some super painful choices. Like I said, we had to let employees go. We had to go back and talk to investors and let them know that all of their investments just went backwards. Nothing about it is fun but you have to just face it head on, so I just owned it. I think that approach was super helpful.

You have to pick your new course of action and then you have to forget the past. Pick your new vision and just sell that like that was the only one you ever believed in. And of course you’ve got to somehow get everyone to buy into this one as much as they we’re into the first one. These are all way harder things than I think people realize.

Wofford It certainly sounds hard. Was it a challenge to keep morale up?

Mulligan Well, when you’ve just let half your workforce go, keeping morale up was already a challenge. People’s workloads had doubled and then it was like, “Now let’s do it over.” I think what helped us is that we spent a lot of time making sure that our new course of action was picked by everyone, not just me.

Wofford Everyone needs to be on board to make a pivot work.

Mulligan Right. We had conversations with the people that we were going to keep and said, “Look, if your heart’s not 100 percent in this, you need to let us know because there are people we are letting go whose hearts are 100 percent in this.” That wasn’t a threat, it was just the reality. I think people really appreciated the openness and transparency. When we let people go, we really supported them but we also sat everyone down and said, “OK guys, we’ve got to forget about it. There is a lot of pain here, but we need to just move forward.”

When we did our pivot in January 2015, we had five nonprofits raising money on GiveGab.
At the end of the year, we had 700. All paying customers, so we were making money off all of them. We are currently on pace to potentially have well over 20,000 nonprofits by this year. We also have 10 states using us as their statewide giving day platform later this year. So the pivot worked.

Wofford Wow, it’s very impressive. Congratulations.

Mulligan We’re really excited and of course relieved. We saw the bottom and that makes you appreciate it more when things are really working.

So much of the startup ethos is ‘vision and persistence’. I think you need vision and flexibility. You can also think about it in terms of the difference between persistence and resilience. Persistence is putting your head down and running into the wall. Resilience is putting your head down but looking around a little and realizing there’s a door over there and you can walk right through it.

Wofford Charlie, thank you so much for sharing your experience and giving such great advice about changing strategic direction.

Mulligan Thank you, Chris. I enjoyed being with you.

Want to hear more? This interview is based on Charlie Mulligan’s live eCornell WebSeries event,The Startup Pivot: Changing Strategic Direction. Subscribe now to gain access to a recording of this event and other Entrepreneurship topics.

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Smart Food and Wine Pairing – How to Think Like a Sommelier

Anyone who eats knows that certain foods taste even better when we pair them with others—think salt and caramel, cookies and milk, or smoked sausage slathered with grilled sweet peppers and onions. Wine has the same power, and customers will spend more money in restaurants that offer exciting wine and food combinations that enhance their dining experience.

As part of the Hospitality webinar series hosted by eCornell, wine educator Cheryl Stanley from the Hotel School at Cornell University provided an overview of the basics of food and wine pairing, as well as ideas for creative non-traditional pairings that you can try at home or on a restaurant menu.

An abridged version of her conversation with eCornell’s Chris Wofford follows.

Wofford: Cheryl, it’s great to have you with us. Let’s get started.

Stanley: Today we are going to be discussing smart ways to pair wines with food. People tend to think that there’s some magic formula associated with food and wine pairing, but you really just need to start with the basics.

It helps to start by asking, what is wine? Wine is just fermented fruit juice. Yes, you have some alcohol in there, of course, but you also have acid, sugar, tannins and water. And what’s in food? You have acid and sugar, and you have tannins in some food products. You also have fat and flavor. So, with food and wine pairing, you’re just aiming to highlight or complement some of those basic similarities.

Wofford: Are there rules of thumb that we should generally follow? How do you start pairing?

Stanley: Before we get into talking about specific wines, the very basic rule of thumb is red wine with meat and white wine with fish.

There are other general concepts that one can follow. Some of them involve matching or complementing body. Kevin Zraly, the author of the Windows on the World wine book, has a great methodology for explaining body to someone. Body is like milk fat. A full-bodied wine is like cream, and a light body wine is like skim milk. Within that range, you also have two percent and whole milk. So if you’re having a food that is full-bodied, you can complement it with a full-bodied wine. There’s also contrasting, where instead of balancing, you’re actually kind of juxtaposing or using the wine to contrast something in the food.

Wofford: What’s a common example of that?

Stanley: Acid is a perfect example because acid cleanses. You can have a fatty dish like steak and an acidic wine would cleanse the palate. It actually refreshes the guest’s mouth to take the next bite.

Personally, I love complementing flavor with flavor too. If you have a particular flavor in a wine, like a grassy-ness in the Sauvignon blanc, you could match that flavor with the grassy-ness in a cheese. That ties into another concept which you’ll commonly hear in the sommelier world: “grows together, goes together.” That’s pairing food and wines from the same area.

Wofford: Can you tell us a bit more about how we can get to know different flavors? What do you recommend?

Stanley: The Flavor Bible is an amazing book because it goes through the ingredients in dishes. For example, under “mushrooms” it has all of the different ingredients and spices and cooking techniques that complement mushrooms. The authors worked alongside a lot of chefs, so it’s not just their own opinions about what makes that perfect pairing.

If you’re looking to do a food and wine pairing, you can consult that book and say, “Okay, well, these flavors are going to be in this dish and this is what’s complementary.” Then you can look at your wines and see what’s available that could complement some of those flavors.

Wofford: Is it important to have a common vocabulary when talking about this? Something like ‘flavor’ seems like it could be difficult to articulate.

Stanley: That’s right. Building a sort of Rolodex of these flavors and aromas can assist you in making pairings in the future. How often do we honestly stop to think about what’s in our food? How often do you actually taste the wine, and really smell it and think about what you’re getting from the glass, and what you’re getting from the dish?

Wofford: What are some different ways restaurants can present wine pairings with food from a menu standpoint to ultimately drive more sales and revenue?

Stanley: I always bring up a 2008 study done by Wine Spectator. About 18,000 people responded to the survey and 50 percent of them said they prefer to see the wine list organized by varietal. That can be helpful with food and wine pairing because if you have the varietal listed, you are adding another tidbit of information and it can decrease people’s anxiety. They might not know that Chablis is actually Chardonnay. Or they might know that they like New Zealand Sauvignon Blanc, and although you don’t have a New Zealand Sauvignon Blanc on your menu, the guest can see that you have a Sauvignon Blanc from France.

Wofford: I think the varietal thing is a really good idea because picking a wine is sometimes intimidating.

Stanley: It is. I teach my students varietal lists because they are so popular and you can see a lot of benefits from wine sales by designing your list by varietal. One thing I also recommend which ties into food and wine pairing is to list the wines by body. For example, having your Chardonnay section list the lightest bodied Chardonnay first and the fullest bodied Chardonnay at the bottom. This way, if a server is not confident in their wine knowledge and a guest says they would like a full-bodied Chardonnay, they know to recommend the wines at the bottom of that section.

Wofford: Do you have some basic words of wisdom for how to build a well-rounded wine list? Are there any trends you’re seeing?

Stanley: Guests are getting more knowledgeable about wine. In some ways that’s good and in some ways it’s bad. There are some wine blogs out there that provide misinformation. Like with anything else, you have to be very careful about where you get your information online.

In terms of building a wine list, there are certain wines that you need to have. You need a light-bodied white wine and a full-bodied white wine. You need to have a light-bodied red wine and a full-bodied red wine. Depending on your staff’s knowledge and your clientele, do you go crazy with those and do a Nebbiolo from the Langhe region in Piedmont from Italy? Or do you do a Napa Valley Cabernet Sauvignon that people would be more familiar with?

I see some young beverage directors who try these wines that are really esoteric. They can’t sell them because the staff doesn’t even know how to pronounce them. That’s another big thing – train your staff on pronunciation. If they can’t pronounce it, they won’t sell it.

Wofford: I’d like to turn to some questions from the audience. Parminder asks: “How does one pair wine with Indian cuisine?”

Stanley: I love off-dry wines with Indian food. This could be an off-dry German Riesling, or even an off-dry Riesling from here in the Finger Lakes. Indian cuisine is so delicious and flavorful that you’re not looking for a wine that will butt heads with all of those different flavors. You’re looking more for a wine to cleanse the palette and just refresh. Another idea is rosé, which is high acid but with a little bit of a bigger body. That can also be very complementary to Indian cuisine.

Wofford: We have a good question here from Alison: “I have a really hard time knowing what dry actually tastes like. When someone is looking for a nice dry red wine, what flavor profile or flavor characteristics am I looking for in particular?”

Stanley: When a guest wants dry, I always like to follow up by asking what wines they normally drink. Because every person can have a different definition of what dry is, especially with some of the red wines that they’re now producing with higher amounts of residual sugar. They’re still being marketed as dry but they’re not, they’re actually sweet. So some people perceive dry as having very little residual sugar. Others perceive it as high amounts of tannin. That’s why a safe bet is to always ask what they enjoy drinking at home, and then gauge off of that brand or style or region to pick up on their definition of dry.

Wofford: We’ve got another great question: “As the wine drinking public becomes more sophisticated, more interesting varietals and new countries of origin emerge. How much should you change your menu based on new trends?”

Stanley: Don’t let trends dictate what you have on your list because you really need to listen to your guests first. If you have guests that enjoy drinking a full-bodied California Chardonnay, then you better have a full-bodied Chardonnay on there. They say that Grenache Blanc is becoming the hot varietal to replace Chardonnay. Well, that’s great but you’re still gonna have guests wanting the Chardonnay. So keep it on, and then introduce the Grenache Blanc. Offer a taste. If you offer a taste, you’re educating your guests and you’re giving them an experience that they might not get at another restaurant, for a cost that’s miniscule to you.

Wofford: What are some pitfalls you see people do over and over when it comes to their wine pairings? What are some common mistakes that are easy to fix?

Stanley: One thing is having wines that people can’t pronounce by the glass. You need to have some good go-tos. I go back to Chardonnay, and I go back to Cabernet Sauvignon. Those are comfortable wines. People understand them. People are familiar with them.

But if you want to still have fun with a Chardonnay, don’t do Napa Valley, do Margaret River in Australia, or do Casablanca Valley. There are opportunities to still have fun by introducing new places to your guests and to your staff, but still with a varietal that people can be comfortable with. Then see how it goes — maybe you need to go back to Napa Valley, and maybe you don’t.

Another thing is just the importance of reading the table. If the guests are having a business meeting, they’re not going to want to spend a lot of time talking about wine. They’ll want to just pick it. But if it’s an anniversary or it’s kind of an first awkward date, then you might want to talk a little bit about wine as a server because that can start fostering conversation at the table.

Wofford: Any last thoughts to share? Other than encouraging viewers to check out the great Rieslings coming out of here in the Finger Lakes, of course!

Stanley: It’s interesting you say that, as I’m the faculty advisor to Cornell University’s blind wine competition team and we were at a competition at the L’Ecole Italia in Lucerne in June. There was a Swiss Wine Magazine that had an article that said the Finger Lakes would in the future be the main competitor to German Riesling. It was pretty incredible.

The last thing I want to say is also my biggest recommendation for food and wine pairing and that is to never judge the guest on what he or she wants to drink. If they’re drinking what they’re happy with, they’re going to have a great meal. If you push them into drinking something that you think is the best pairing and they don’t like it, you have just ruined the experience.

Wofford: That’s really great advice. On the one hand, you are kind of a tastemaker, so you should be able to offer pairings when asked. But on the other hand, it goes back to reading the table and dealing with the audience that you have and making them happy.

Stanley: Absolutely. Help them out if you can but ultimately you have to please your guest.

Wofford: Cheryl, this has been great. Thank you.

Stanley: Thank you, Chris.

Want to hear more? This interview is based on Cheryl Stanley’s live eCornell WebSeries event, A Perfect Pairing: Wines to Enhance Your Guest Experience and Bottom Line. Subscribe now gain access to a recording of this event and other Hospitality topics.

How to Recognize and Build Upon Your Talents

Worried that you’re just not cut out for entrepreneurship? Don’t be.

Gallup’s Entrepreneurial Profile 10 (EP10) assessment has outlined the top ten talents of entrepreneurs and each and every one of us has them within us.

As Mona Anita Olsen, an assistant professor of entrepreneurship at the School of Hotel Administration at Cornell University, puts it: “Entrepreneurship is for everyone.”

Olsen joined eCornell’s Chris Wofford to discuss the EP10 assessment and how it can be used to provide a better understanding of anyone’s entrepreneurial talents and how they can be put to use in any work setting. What follows is an abridged version of their conversation.

Olsen: At the School of Hotel Administration, we have been promoting entrepreneurship to students at all levels. That’s where the EP10 comes in.

We’ve provided the opportunity for all freshmen, transfers and masters students to take this assessment at no cost. They can then take the results and come to a session on how to actually analyze those results. The main motivation behind it is to plant a seed that entrepreneurship can be part of your journey no matter where you go – whether you’re trying to innovate within a corporation or starting your own venture.

Wofford: What exactly does the EP10 assess?

Olsen: When thinking about the EP10 and its application to entrepreneurship, I want to first make sure we’re on the same page about the word entrepreneurship. An entrepreneur organizes, manages and assumes risk. Entrepreneurship is the capacity and willingness to develop, organize and manage a business venture along with its risks in order to make a profit.

There are ten talents that the EP10 assesses: confidence, delegator, determination, disruptor, independence, knowledge, profitability, relationship, risk and selling.

This is an online assessment, not a test. It takes 20 to 30 minutes to complete and it costs $12, so it is not a huge investment in terms of time or money. You can take it anywhere and at the end you get an assessment of those ten talents and they will be ranked in order of your highest score. So this really helps you identify your greatest natural strengths.

Gallup has studied entrepreneurship for a long time and they came up with the unique talents that successful entrepreneurs possess. Remember, talents are different from personality traits and encompass attitudes, motives, cognition and values. Entrepreneurs have certain business outcomes that they’re trying to reach and Gallup tried to figure out how the talents impact those business outcomes.

Wofford: How did you first get involved with the EP10?

Olsen: I was in Omaha in December to get certified as an administrator for the EP10 and there was this question on the wall that really struck me: “What would happen if we studied what is right with people versus what is wrong with people?”

It really struck me that not only is strength-based education training really important, there are also a lot of links between happiness and and being more productive in the workforce. Leveraging your talents actually influences your performance.

Wofford: I’m curious about some of the terms. Take profitability, for instance. How do you assess that for someone who has not necessarily gone out and generated profits themselves? Similarly, a term like ‘risk’ can be perceived very differently.

Olsen: OK, let’s look at the talents and their definitions. Let’s start with confidence, which is defined as the ability to accurately know yourself and to understand others.

A delegator is someone who recognizes that they can’t do everything themselves. Personally, that’s something that I struggle with.

Determination is a term that people usually understand – you persevere through difficulties and seemingly insurmountable obstacles. You’ll note that entrepreneurs actually love obstacles. They love being able to get through those challenges.

A disruptor is someone who exhibits creativity and takes an idea or existing product and turns it into something better. A lot of people will use disruptor synonymously with innovator but they’re not the same. With a disruptor, we’re talking about the creativity to bring value to an existing idea or product.

Independence is doing whatever needs to be done to be successful in a venture. This is a talent that’s ranked highly for most entrepreneurs.

Knowledge means that you’re constantly searching for information that is relevant to growing your business. You see this in almost all of the students that take the assessment.

To your previous question, when we talk about profitability we’re talking about making decisions based on an observed or anticipated effect on profit. In other words, you’re always thinking about how your decisions are going to impact the bottom line.

Relationship is assessing social awareness and the ability to build beneficial relationships. Naturally connecting people.

Selling is the ability to be persuasive and really be a champion for pitching an idea.

Risk refers not to taking a risk, but rather how to manage risk. How to instinctively deal with high-risk situations.

Wofford: Most of those definitions are pretty intuitive, I guess.

Olsen: Yes, but you’re right that people might have their own definitions for these terms so it’s good to establish what they mean in this context.

Now, once you do the assessment you will essentially be given a top four. Your top four talents will be weighted and then it will basically align your results with one of three entrepreneurial styles.

So you’re either relational, strategic or activation oriented. The difference between those last two is that strategic is more about planning while activation is getting things done.

At the end of the assessment, you’ll get this full report that includes your top four talents and your entrepreneurial style. It goes through each of the different talents that you have and gives you scenarios in which you might actually use those talents in your work environment.

Wofford: If you don’t mind me asking, what were your results?

Olsen: In my case, I have the activation style. What’s great about the assessment is not just that it gives you your top four talents but that it also helps you identify some of the areas in which you are not as strong.

Wofford: OK, so let’s say I’ve just gotten back the results of my assessment. Now what?

Olsen: There are many different things you can do. The first thing I usually ask students to do is to map their talent. I ask them to draw an inner circle, where they put their top four talents. In the second circle, they identify the next three and then the bottom talents are put in the last outer circle.

Why is it important to do that? Well, first, it’s important to really look at yourself and sort of accept where you are before you decide what you might want to do with the results.

If you know your talents, when was the last time you used them? How many times do you use your top talents on any given day or week or month?

If you’re not using them, how would doing so impact your work? Would you be more effective in whatever role you’re in? If you are using these talents on a more routine basis, how can you consciously work toward putting these talents forward?

When you have your results, you can you ask yourself how you are going to use these talents in a team setting. Understanding yourself before getting into a group makes you a more effective group member and also enables you or the group leader to strategically think about how to use your talents.

Wofford: So this isn’t solely about self-improvement or self-understanding, there is a team benefit to this as well?

Olsen: Absolutely. You can actually use the results to make team maps, where you map out the top four talents of all your team members. This can be very helpful in a startup situation because you can look at the talents that are necessary to be successful as entrepreneurs and determine which ones your team is really strong at and how to take advantage of that. You can also identify areas that might prove to be blind spots for your team.

Wofford: If your team map results showed that nobody is prepared to delegate, that would obviously be a problem.

Olsen: Exactly. Going through these assessments can be a great team-building tool.

Wofford: A question from the audience came in that really jumped out at me. It asked whether you’re likely to see immediate changes in someone’s behavior after they’ve taken the assessment.

Olsen: I think it makes you more mindful of what you’re doing on a daily basis. In my case, I might think that maybe the reason someone responded to me in a certain way is because my risk tolerance is so high that I’m willing to push something forward even when I know there’s going to be pushback. It’s made me more mindful of how I come across to others.

Recognizing my talents also helps me to focus on the most effective ways for me to spend my time and how I can be the most productive by leveraging these very naturally-developed talents that I have.

Wofford: It must also help to expose some deficiencies so you know what sorts of things you need to improve upon.

Olsen: Absolutely. It’s only natural to spend some time thinking about the talent that you scored the lowest on, especially if the results were surprising. But it’s important to remember that it’s all relative. For example, you could actually be a very strong delegator but it’s just not as strong as the other nine talents. It’s human nature to focus on areas that need improvement. It is important to be aware of your weaknesses but you shouldn’t let them overshadow your strengths.

Wofford: We’re just about out of time – any parting words?

Olsen: First of all, if you haven’t taken the assessment yet, go to the Gallup site and take it. It’s only $12 and it will take you less than 30 minutes. Before you take it, I think it can be very helpful to predict your four top talents and then try to analyze how your assessment results either matched your expectations or surprised you.

My challenge for all of you is to think about how you can use your talents at least once every single day. If you do that consistently over a week or two, will you see any results in your productivity or in your happiness or just in feeling like you’re very effective with the talents that you bring to the table?

Wofford: Mona, thank you so much. I also want to thank the audience and again, if you haven’t taken the assessment, go out there and do it!

Olsen: Thanks, Chris.

Want to hear more? This interview is based on Mona Anita Olsen’s live eCornell WebSeries event,The Entrepreneurial Profile: Buidling On Your Talents. Subscribe now gain access to a recording of this event and other Entrepreneurship topics.

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How to Make the Business Model Canvas Work For You

Neil Tarallo has more than two decades of entrepreneurial experience under his belt and is a senior lecturer at Cornell’s Hotel School as well as the director of the Cornell Entrepreneurship Bootcamp for Veterans with Disabilities.

But that doesn’t mean that he can simply come up with an idea and magically turn it into a successful startup. When Tarallo brainstorms ideas, he leans heavily on the Business Model Canvas. Created by Alexander Osterwalder, it is arguably the most important innovation in entrepreneurship and strategy in quite some time.

Tarallo joined eCornell’s Chris Wofford to discuss the Business Model Canvas as part of the Entrepreneurship webinar series. An abridged version of their conversation follows.

Tarallo: Entrepreneurs are problem solvers. We solve problems in a marketplace, and in doing so we create businesses. For us as entrepreneurs, it’s important to understand exactly who is feeling the pain, so to speak, that has been created by that problem. One of the nice things about the Business Model Canvas is it really helps us focus on that.

When I talk to entrepreneurs around the world about their businesses, one of the things they tend to miss is the value that their solution creates for their customers, and exactly what those customers think about that value.

People get a little upset with me sometimes when I say these things but products and services don’t create markets. Solving problems in markets, and creating value, allow us to create new markets. But in order to have a sustainable business, you have to solve real problems for real people and understand what that solution means to them.

It’s really not about your products or your cool technology or how great your food tastes. It’s always about how you create and capture value for your customers. So that’s what we want to focus on and I think one of the great things about the Business Model Canvas is it really helps us focus on that important element of our business.

There’s no shortage of new products. It’s not even cool anymore just to have a new product or new technology. There’s so many of them out there, but very few of them really bubble up to the top. That’s because the manufacturers misinterpret what it is that they’re trying to do. There’s that old adage: Build it and they will come. Whenever I hear that, I run as fast as I can and you should too because you need to do more than just build it. You need to make that connection and that’s really what the Business Model is about. It’s all about how a business captures and delivers value to the customers.

Wofford: Before we go much further, perhaps we better get into what the Business Model Canvas actually is and how it works.

Tarallo: OK. The Business Model was created by a guy named Alexander Osterwalder. He was doing his Ph.D. and his interest was in business models. What he discovered as he was doing his research is that when he would ask people about business models, no two people could define it the same way.

I give him a lot of credit for seeing that. I think it’s something that all of us who teach and talk about entrepreneurship over the last 15 or 20 years have encountered but we just never identified it.

Osterwalder wrote his dissertation, ‘The Business Model Ontology – a proposition in a design science approach’, about how we build and generate business models. His premise was that we need to have a common understanding of what a business model is and that we need sort of a shared language around it.

So he created this tool called the Business Model Canvas and that was followed shortly thereafter by another canvas called the Value Proposition Canvas. We won’t spend as much time on the Value Proposition Canvas today but it has also become a fundamental tool in innovation.

The Business Model Canvas has nine building blocks and we’re going to quickly go through each of those building blocks. In the very center of the canvas is the Value Proposition. This is where we articulate the problem that we’re solving as well as how we are solving it for our customers. It is the first building block and is at the dead center of the canvas because it is central to everything that we do.

All the way over to the right is Customer Segments. We need to understand, as specifically as we can, who the customers are. Who will be interested in our solution and what value do they see in what we propose for them? Continuing on, building block number three is Channels, and that’s how customers actually get and access our Value Proposition. It could be online, it could be in our store – there are a whole bunch of variations on how we do that.

Next, Customer Relationships, which is primarily the marketing component of what we do. Moving to the left on the canvas, we have Key Resources, what we need in order to deliver our value proposition. Above that is Key Activities, where you identify what activities your business engages in on a daily basis that deliver the Value Proposition.

All the way on the left is Key Partners and those are other organizations or people that we can work with to help us deliver our Value Proposition. An example there might be, if I sell coffee, coffee growers may be a key partner for me because I have to bring them on board.

The bottom of the campus is all about the financial aspects of our business. To the right, we see Revenue Streams, and that’s those unique products or services that generate revenue for our business. To left is Cost Structure, or what it costs us to deliver our Value Proposition.

Notice that when I talk about each of these building blocks, I’m always referencing the Value Proposition. The activities that happen within these building blocks are central to that. Everything I talk about on the Business Model Canvas focuses on that Value Proposition.

Wofford: Yes, I did notice that you were really driving that home.

Tarallo: Now, if you look at the layout of the canvas, what you really see on the right side is what we call front stage operations or what we call front of house in the hospitality industry. These are the forward-facing activities that customers see and feel and touch. On the left side of the canvas are what we call backstage or back of house operations and those are the things we do behind-the-scenes that customers don’t necessarily see that support the delivery of our value proposition.

My work with companies and with entrepreneurs tends to focus on that left side because it’s a much more difficult thing to do. I call the front stage operations low-hanging fruit: we get to talk to our customers, we get to do some research, we see what they value and what they don’t value. That’s all pretty easy to do. The interesting thing about backstage operations is that if we can figure out how to deliver value through our operations, we tend to create a competitive advantage that’s very difficult for our competitors to break into.

An example I always use for that is Disney World. It’s one of my favorite places to go because I learn so much about operations there. Disney really delivers value through their operations. They entertain you while you’re going through lines, they have a series of tunnels underneath the entire facility, so that they can get anywhere in the park in six minutes or less. Other parks can’t do that so they’re creating value through operations that really gives them a big advantage over their competitors.

Wofford: It’s fascinating, and for our viewers who are interested, just Google ‘Disney World front stage operations and backstage operations’. There’s so much stuff out there written about it.

Tarallo: Now, the lower part of the Business Model Canvas is what I call the economic model.
It’s how different elements of the cost and revenue structure of our business come into play and work together. So that’s the way I think about the model: right, left and lower side, with value being in the center of everything.

Wofford: So how does the canvas work?

Tarallo: As we build our Business Model Canvas, we really hypothesize and we’re guessing what we think is going to happen or could happen in each of these building blocks. Then our job is to go into the marketplace and test our hypotheses. We learn from those tests and we go back and we repeat this over and over again until we get it right.

Wofford: So following this model allows you to test your assumptions, right? That’s where you validate whether or not you do have unique value, whether you’ve got a competitive advantage and so on?

Tarallo: Exactly. You need to be objective. One of the big challenges for me in disseminating information about the canvas both to my students and entrepreneurs is that they’re very emotionally invested in their solution to the problem. For me, one of the measures that I use to determine whether I think somebody is in fact going to be successful as an entrepreneur is how flexible they’re willing to be in that solution.

Wofford: How do you know when you’ve got it right?

Tarallo: To be very candid with you, as much as we work on this and as much as we test, it will not be accurate. The day that we open our business is when we really find out whether it’s accurate or not. None of this is an absolute, but the canvas gets me on the right page. It gets me as close as I can so that when I have to make adjustment when I open my business, or as I’m running my business, I don’t have to take big leaps. I’m trying to mitigate risk and I think one of my favorite things about the Business Model Canvas is it lets me do that.

Entrepreneurs don’t like risk, contrary to what a lot of people believe. We understand risk. We understand it’s part of our lives and we work hard to mitigate that risk, but we don’t love risks.

Wofford: So you’re not rushing off to Vegas every chance you get?

Tarallo: Haha, no. When it comes to testing ideas we’re really trying to set up a series of controlled experiments that you can fail without jeopardizing your business. I always say that entrepreneurship is nothing more than a series of small failures. I’m very careful about how I say this though, because I think there is this belief out there that it’s good for entrepreneurs to fail big and fail fast. I’m not a fan of that. Failure is never a good thing. I want to try to control my failures so that I’m mitigating risk and I learn from my market in a way that’s not going to damage my brand or what I’m trying to accomplish.

It’s important to me to stress that in my opinion, the Business Model Canvas is not a replacement for a business plan. It’s not a replacement for a marketing plan or a strategic plan. It is an effective tool for understanding who your customers are, what they value and how you can create a solution for their problem.

One of the things that Steve Jobs was really good at with Apple was not even thinking about a product necessarily but going into the market and interfacing with the market and seeing what it is that they were struggling with. The iPod is a great example of that. He saw a problem that was happening in the marketplace and he really found it through observation and getting people to tell stories about how they get music and how they listen to music.

I contend that Apple’s business model as a whole is that they’re problem solvers. They find problems in the market that they can solve with their core competencies, which are design and technology. That’s how they come up with these really great innovative products.

I shouldn’t say this because you’re recording, but I think Apple is going to be out of the phone business before too long.

Wofford: Really? Why do you say that?

Tarallo: Because the problem is solved. It’s no longer compelling for them and for the first time ever we saw iPhone sales drop last year. If you think about the iPod, you can’t buy one of those on a store shelf anymore. Why not? Because the problem has been solved, so Apple no longer makes them. Our phones are now substitutes for iPods and I think you’ll see the same thing happen with the iPhone, perhaps sooner than a lot of people think.

Wofford: Well, if you’re right you’ll be glad we were recording this so you can pull up the video and say “told ya so”. Neil, this has been very interesting. Thank you for sharing your insights into the Business Model Canvas.

Tarallo: Thanks, Chris. I enjoyed it.

Want to hear more? This interview is based on Neil Tarallo’s live eCornell WebSeries event,Business Model Canvas: A Tool for Entrepreneurs and Managers. Subscribe now gain access to a recording of this event and other Entrepreneurship topics.

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How to Manage Risk, Uncertainty and Opportunity (The Smart Way)

Having spent many years as a business consultant, Stephanie Thomas says she has “a long history with risk.” But although many people view risk as a negative thing, Thomas says that risk is more like the flip side of opportunity.

Now an economics lecturer at Cornell University’s ILR School, Thomas joined Chris Wofford to discuss the relationship between risk, uncertainty and opportunity as part of eCornell’s WebSeries.

An abridged version of her presentation follows.

Thomas: It’s important for people to realize that, risk isn’t necessarily a negative thing. Without risk, there’s no opportunity. If we never take a risk, we can’t really ever move forward to build, grow, develop and expand. So we have to take calculated risks but not stupid risks.

Wofford: To make sure we’re all on the same page, how do you define risk?

Thomas: Risk can take a variety of forms. There are four kinds of risks within the business setting: hazard risks, financial risks, operational risks and strategic risks.

The first, hazard risks, are usually the kinds of things that we think of when we hear the word ‘risk.’ This is the risk of something bad happening – natural disasters, floods, car accidents, those kinds of things.

Wofford: The risk there is not having prepared for them, right?

Thomas: Yes, and it’s really difficult to prepare for them because oftentimes they’re unanticipated. But when they do happen, they’re going to impact the business. Hazard risks are things that happen to the organization from the outside. Insurance, contingency planning and emergency preparedness plans can really mitigate hazard risks. So even though hazard risks are unanticipated, we usually have some pretty good mechanisms in place to deal with them.

Most organizations will also have protocols and policies in place to manage financial risks. These are things like fluctuations in interest rates, debt, asset losses or shrinkage if you’re in a retail environment. We all face these kinds of financial risks, but they’re typically well controlled and well understood as a part of routine discussion.

Then we can talk about the operational risks like supply chain issues and cost overruns. These are things that you might not plan for or take insurance out to mitigate against, but they’re still risks that are pretty well understood. If you have supply chain issues and can’t finish your product because something has happened to the person that you’re relying on – their truck broke down or they’re behind in production – this can really blow everything up.

But again, these kinds of risks are usually able to be managed pretty well. As an organization, you’re going to have a sense of what could go wrong and what you’re going to do to mitigate that situation.

Wofford: So that leaves the big category.

Thomas: Yes, the fun one. Strategic risks. Here we’re talking about things like customer retention. We’re talking about R&D projects. We’re talking about industry or sectorial issues and broader macroeconomic fluctuations. You’ve forecasted demand and it turned out that your forecasts were wrong and you have all this excess inventory. What are you going to do with it? Or you manufacture a toy and all of a sudden it becomes the “it” toy for the holidays and everybody is buying them and you haven’t produced enough to satisfy demand. What now?

These are examples of strategic risks and you really need to think about how they can potentially impinge on your strategy and what you’re going to do.

Wofford: So do you get everybody in the same room and sort of talk through these different possible scenarios and your responses to them?

Thomas: Absolutely. I’d like to turn to some real-life risk examples. When Apple did their R&D to create the iPhone, they didn’t really know for sure if it was going to be a success. It was a touch screen; it looked nothing like the flip phones or the clam shells of the day. It was a huge risk. But what was the upside? Well, it was enormous. The iPhone is now on its seventh generation and everybody has one.

To give another example, do you like to cook?

Wofford: Yes, a lot.

Thomas: Okay, let’s say that you’re making a new recipe for the first time. If it doesn’t turn out the way that you hope it does, what’s the downside?

Wofford: Well, I’d certainly be disappointed myself, and I could have unhappy guests. Worst case, someone gets ill.

Thomas: Let’s not even get into the getting ill part. Let’s just say it doesn’t look the way it’s supposed to look or it doesn’t taste the way it’s supposed to taste. The downside is, well, you can’t eat it and you have to order take-out. This is relatively minor in the grand scheme of life. But the upside is you prepare something wonderful for your family, you’ve learned a new skill and you’ve added to your credentials as a chef.

Wofford: Right, it’s not a huge downside if we have to order pizza because I messed up dinner.

Thomas: It’s not catastrophic. But in some cases, the downside of strategic risk can be catastrophic. If we look at Exxon Valdez, if we look at Deepwater Horizon, those things have huge potential downsides in terms of not just money and resources but in terms of human life. So how we balance these risk-versus-reward situations depends on what’s at stake. Context is super important when we talk about managing these risks.

Wofford: When we think of risks, we sort of associate them with trying new things. But can you think of any examples in which it is better to stick to what you were doing? I ask because I’m from Rochester, New York, the home of Kodak. And that’s a company that willfully decided to neglect the burgeoning digital market to their peril.

Thomas: Again, I think it depends on the situation. In the case of Kodak, it was a strategic choice that they were the leader in what they do and wanted to focus on that core capacity. I certainly can’t speculate on the decision-making process, but if I had to guess, I would say that they felt that even with this new digital marketplace coming, there was still going to be a need for the old analog film. And there are still photographers and artists that use film even though the market has gone overwhelmingly digital.

Wofford: I know it depends on the situation, but typically, how do companies typically deal with risk, uncertainty and opportunity?

Thomas: I think that you need to take a holistic approach. There’s not necessarily one single correct answer but we can assign likelihoods to things. To go back to the cooking example: if you’re trying a new recipe, what is your level of cooking ability? Can you read a recipe? Do you know how to measure ingredients? If you’ve never cooked anything before, the downside for you is a lot more likely than if you’re an experienced cook. You need to really think about what those potential upsides and downsides are and how likely they are to happen.

The classic expression is “nothing risked, nothing gained.” If Apple had not taken the risk to move forward on their R&D project, they would have lost a lot. The iPhone really helped make Apple one of the world’s leading consumer brands.

There are a few common approaches that are used to address risk. The first one is to be like an ostrich and put your head in the sand and ignore it. Not a good idea. Ignoring everything around you is a catastrophe waiting to happen.

A second approach is to say, “Okay, so we know last quarter this happened. And the quarter before that, this happened. And two years ago this happened, so we’re going to predict what we’re going to do in the future based on historical information.” That often works, especially if you’re in a stable environment and producing a product or service that hasn’t changed in the last 10 to 15 years. In that situation, looking at history is going to help you predict the future.

But if you’re in the tech world, you certainly don’t want to look at what’s happened in the last five years to try to predict what’s going to happen in the next five. Things change too rapidly.
To tie it back to your Kodak example, they had been a leader for a number of years so they might have thought that what worked in the past was going to continue to work in the future.
It didn’t. Projecting the past into the future is like driving on the highway looking only in your rear view mirror. You’ve got some information — you know where you’ve been — but you’re still missing what’s in front of you.

Wofford: Let’s talk about the distinction between risk and uncertainty.

Thomas: The way I think about risk is that it is something that can be known. If I cross the street, there are certain inherent risks. With uncertainty, on the other hand, we have no way to quantify it. It’s the realm of unknown unknowns.

If it’s risk, we can manage it. We can manage hazard risk through insurance policies. We can manage financial risk through standard operating procedures and audit controls and generally accepted accounting principles and so on. But if it is truly uncertain, there’s really not much you can do. Uncertainty in my mind is a lot scarier than risk. If it’s true uncertainty, you’re not able to even articulate the array of possible outcomes.

Wofford: So we’ve made that distinction and we’ve talked about a couple of risk case studies. Do you have any advice for putting risk assessment into practice?

Thomas: I think that when coping with risk, particularly strategic risk, you really need to understand what it is that you do and what your customers expect. What is it about you that distinguishes you from your competitors? What is your strategy? You need to have a firm grip on these things in order to think about what is likely to happen in the future.

Do we want to go from making widgets to digital switches? Are we going to transition into that new area to cope with the new business environment or are we going to stay on track and continue to do what we’ve always done? Again, depending on the scenario and the environment that you operate in, both could be viable alternatives. But when you choose one path, you should be able to articulate a set of reasons as to why you made that decision. You need to understand the opportunities as well as the risks and make a calculated decision.

Wofford: Stephanie, thanks for that practical advice and thank you so much for joining me today.

Thomas: Thanks, Chris.

Want to hear more? This interview is based on Stephanie Thomas’ live eCornell WebSeries event,How to manage Risk, Uncertainty and Opportunity. Subscribe now gain access to a recording of this event and other Entrepreneurship topics.

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Can Pay Transparency Help Close the Gender Wage Gap?

Women may have more professional opportunities today than ever before in history but the unfortunate reality is that they still earn less than men on the whole, thanks to a persistent gender wage gap. The most commonly cited statistic in the gender pay gap discussion is that women earn 77 cents for every $1 earned by their male counterparts. But according to Stephanie Thomas, a lecturer at Cornell University’s ILR School who has spent 15 years researching the gender gap, there is more to that figure than meets the eye.

As part of eCornell’s webinar series, Thomas joined Chris Wofford to discuss the complexities of the gender wage gap and how employers can use transparent pay practices to help close it. Below is an abridged version of their conversation.

Wofford: I think everyone is probably familiar with the common figure that we all kick around, that women earn 77 cents to the dollar that men earn. Is there more to the story?

Thomas: That figure is part of the story, but it’s not the whole story. When we look at various explanatory factors and make appropriate comparisons, we see that the 23 cent gap really narrows. Yes, it’s a real number but it’s not necessarily reflective of the true gender pay gap when we measure things correctly.

Part of the reason that we have this 23 cent differential is due to the way we’re measuring the gap. If we look at all men versus all women, we see a large gap but that’s not necessarily the right comparison to make. We know that there are a lot of non-discriminatory factors that influence pay, like occupational choice, industry, labor market experience, and education — all those kinds of things. So when we lump everybody together and look at all men versus all women, and the only thing we account for is gender, we see that 23 cent gap. When we control for things like occupation, industry, labor market experience and union status, we see that the 23 cent gap really closes. When these factors are included, we get that gap down to about nine cents per dollar.

Wofford: If everything else has been accounted for, does that suggest that the nine cent difference is down to pure discrimination?

Thomas: It’s difficult to make an inference of discrimination. We first need to make sure that we’re comparing people properly, so we want to look at people who are in the same occupation, in the same industry, with the same labor market experience. Women tend to have less labor market experience than men, simply because of biology. Women are the ones that give birth and most women don’t want to give birth under their desk and go right back to work. So we take time off and that makes a difference in the labor force experience of men and women of the same age. When we account for all of those things, there’s about a nine cent gap left.

But there are some other factors that are a little more difficult to measure, that could explain that remaining nine cents. For example, women will, generally speaking, take a lower salary and a richer benefits package while men are more likely to take a higher salary and less benefits. Men also tend to prefer more risky compensation elements like stock options and bonuses. Women, on the other hand, tend to be a little more risk averse than their male counterparts.

We can also look at the role of caregiving responsibilities, whether that’s for children, disabled family members or elderly parents. In our society today, women still bear the brunt of those caregiving responsibilities. Whether that is right or wrong is a different conversation, but it’s still seen as a female thing to do. So if women are taking time off from work, or scaling back their hours, that can influence what we see in terms of the overall earnings numbers.

Wofford: Doesn’t negotiation also play an important role in this?

Thomas: Absolutely. Negotiation and compensation expectations are really important. There have been a variety of studies done on this. One of the most interesting asked people who had just finished their MBA what they thought a reasonable starting salary would be. Depending on how you look at the data, compensation expectations for women were anywhere from 25 to 50 percent lower than their male counterparts.

Wofford: Wow, that’s substantial.

Thomas: It is, and if women have lower expectations about what a reasonable pay package would look like, that can contribute to the disparity. We also know that women are only one-third as likely as men to engage in compensation negotiations. When they do negotiate, they’re just as successful but they’re only one-third as likely to start that conversation.

The last thing I want to bring up here that helps explain that nine cent differential is the difference in work hours. We know that men tend to work more hours per week than women. A lot of times those extra hours are paid as time-and-a-half overtime earnings, so if men are working more overtime, that alone can be enough to explain the difference in the amount on the paycheck. Even though you and I might be paid the same hourly rate, if you’re getting time and a half for overtime and I’m not, you’re going to have higher earnings than me.

Now, even if we account for caregiving, hours, the cash benefits tradeoff, and all those other things, there still may be some gap left over. I think it’s important to note that just because we can explain the gap in the aggregate doesn’t mean that there aren’t real cases of gender discrimination happening. We could have a zero differential in the aggregate but that doesn’t mean that everyone’s being paid fairly. If there are cases of gender discrimination, and unfortunately there are, it’s really more than just the impact on the woman herself. It’s really a family issue. It’s a societal issue. More than 7.3 million families are headed by single mothers. If they’re not earning as much as they should be, then that’s going to affect where they can live, access to education, and opportunities for their kids. It’s really much more than just paying the woman fairly. If women have less income, that’s going to affect the economy as a whole because they’re not going to be spending as much, which in turn has a dampening effect on GDP growth and macroeconomic issues.

Wofford: So actually, everyone would benefit if the gender gap was brought down to zero, not just women.

Thomas: Yes. People are starting to realize that the gender pay gap is more than just about the woman. It’s a family issue, a societal issue and a big macroeconomic issue.

Wofford: So how do we work on closing the gap?

Thomas: One thing that can help is pay transparency, which is something we are hearing a lot about these days. Why do we care so much about pay transparency right now? From my perspective, I think that there are two different sets of forces playing a role here. On the one hand, it’s sort of a logical extension of what we’re seeing in society as a whole. With the rise of social media, people are sharing more things about themselves. I’m a little bit older and I was raised with the idea that nice people don’t talk about politics, religion or money. But my 16-year-old niece just tells everybody everything about herself on social media. It’s very open, it’s not a big deal. I think that millennials don’t have the same kind of privacy concerns that Gen-Xers like me do.

I think this push toward pay transparency is also an extension of business trends and the rise of big data. Today, we’re collecting more information and we have better technology to process that information and generate insights. Organizations are shifting somewhat to more person-based jobs, rather than job title-based jobs. It used to be that job descriptions would include “other duties as assigned.” A lot of times now, the “other duties as assigned” is the job. It’s a combination of business and societal trends that are sort of causing this issue of transparency to rise to the surface.

Wofford: How do you go about showing pay transparency? I’ve never been in an environment where that was the case.

Thomas: Pay transparency means different things to different people. What I recommend for businesses is what I refer to as pay process transparency. What that means is really setting out a very well-defined, organized, clear set of expectations. If this is your job and this is how many years of experience you have, and these are your skills, abilities, talents, and qualifications, this is what the pay range is going to be.

Cornell has what I would call pay process transparency. Depending on the job family that you’re in, there are different grades – B, C, D and E – and a starting salary range. If you are in this particular job family at this particular grade, then your salary is going to be between here and here. In order to get to the next step or to earn the next pay increase, the criteria are laid out very clearly. Each employee knows what they have to do to get that next merit increase or bonus. Being transparent about your pay process is really providing employees with enough information to really understand how those pay decisions are made.

Wofford: This also tells an employee how much negotiation wiggle room they have, right?

Thomas: Yes, there’s a minimum and maximum. Sometimes you’ll see it presented in terms of a midpoint. Some organizations, particularly in the high tech sector, have decided to opt for non-negotiation policies. They know that men and women have different tendencies to engage in those conversations, so one of the ways that they’re addressing the gender pay gap is to say, “This is what we’re offering you. Take it or leave it, we’re not going to discuss it.”

Another element of pay transparency is what I refer to as pay disclosure. Whole Foods is a great example of this. At Whole
Foods, anybody can go in and say, “I want to see how much so-and-so is earning” or “I want to see what the CEO’s compensation package is.” Whole Foods has taken somewhat of a radical approach to this in that they’re making their payroll books open. Any employee can go in and look at any other employee’s pay. For the culture that Whole Foods has, this is a good strategy for them but for other organizations this may not be optimal. I think you have to figure out what’s appropriate for your organization and what fits with your culture.

The third example that I want to talk about is something that happened at Google, and this is what I call radical transparency. This was not something that Google put into place but rather something that Google employees did on their own. It started with a former Google employee who was concerned about some pay equity issues at Google. She created a Google spreadsheet and circulated it among some of her co-workers and said, “Put in your name and your salary and we’re going to see what the pay practices are.” It was voluntary disclosure on the part of the employees.

Wofford: What happened? How did the higher-ups respond?

Thomas: Well, they weren’t happy, but technically, there was nothing that could be done. It’s not illegal for employees to talk amongst themselves about their pay. Whether you’re unionized or not, the National Labor Relations Act gives employees the right to talk about compensation.

There was a lot of buy-in from the fellow Google employees and the spreadsheet revealed what the workers thought were some discrepancies that needed to be looked at. Now, just looking at a sheet of people’s names and pay rates is not going to tell you everything that you need to know. Just because you and I have the same job title doesn’t mean that we should have the exact same pay rate.

Wofford: What happened at Google as a result?

Thomas: Well, the employee departed the organization and the whole thing blew up in the news. It was ultimately resolved internally so I don’t know the details but I know Google did take a look at this issue. I hope that if there were real disparities that needed to be corrected, they were.

Wofford: Great, so we’ve seen several examples of pay transparency, radical and otherwise. What’s next? Are more companies thinking of transitioning to a transparent process?

Thomas: A lot of organizations are thinking about it. Before I came to Cornell, I spent 15 years in private consulting and one of the things that I specialized in was the statistical analysis of pay disparities. So we would be retained to go in and look at an organization’s data, understand how they paid people, and actually do a statistical analysis to identify those disparities. If we found disparities, we would report that information back to the organization and help them figure out what steps they needed to put into place, not only to correct the situation, but to prevent it from happening again.

Wofford: Would you advocate generally for this kind of transparency?

Thomas: I completely support pay process transparency. I think that it’s the right thing to do. I think it’s information that your employees are entitled to and should be provided. For some organizations, it’s probably not time yet, but it might be in the future. You have to understand your workforce, their needs and their wants. There really isn’t a one-size-fits-all solution to this.

I think the bottom line is your employees are going to talk about pay. They’re going to have those conversations, whether you want them to or not. You can’t legally prevent them from doing it but what you can do is help manage them. By being open and providing this information up front, you can inform and direct those conversations. If you’re providing accurate information and people have an understanding of how those decisions are made, it can shut down the rumor mill.

Wofford: Stephanie, thank you for the conversation on these very important issues.

Thomas: Thank you, Chris.

Want to hear more? This interview is based on Stephanie Thomas’ live eCornell WebSeries event, The Gender Wage Gap: Causes, Consequences and the Way Forward. Subscribe now gain access to a recording of this event and other Human Resources topics.

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Are Most Managers Bad Listeners?

The Art of Listening for Impactful Leadership

When you think of the traits that define a good leader, does your list include listening? If it doesn’t, it should. If you learn to develop and improve your ability to listen, you’ll likely be better prepared to lead and manage individuals, teams and organizations.

In this edition of the Women in Leadership WebSeries, Professor Judi Brownell from Cornell University’s Hotel School joined eCornell’s Chris Wofford to discuss how listening can improve your effectiveness as a manager and to share practical tools for improving your leadership ability through listening.

What follows is an abridged version of their conversation.

Wofford: Is it true that most managers are bad listeners?

Brownell: Well, most managers certainly believe they listen more effectively than they do. I think that speaks to our lack of awareness of listening.

Listening is like any other communication skill in that you really can keep improving. Regardless of how well you actually do listen, there is always more you can do.

In a professional context, there is a really interesting curve where listening is critical as you come into an organization but then speaking is often more important in the middle of a career because you’re influencing through your ideas. And then as you go into senior management, listening once again becomes really important.

For new employees, listening is particularly important because it’s through listening that you begin to understand how things are done in an organization and whose voices are really heard. But it’s also important in senior positions. One of the problems is that sometimes senior executives think they have all the answers but they often don’t. They really need to rely on other people’s perspectives.

Wofford: Listening is easily taken for granted, right?

Brownell: Absolutely. A lot of us don’t think actively about how we listen.

Listening is what we call a receiver-defined activity, which means that things mean what the listener thinks they mean. We’ve seen that in many cases in the political arena recently. No matter where you stand, things can mean different things to different people. That’s because as a listener, you have a lot of personal characteristics that contribute to how you interpret things.

Wofford: Speaking of personal characteristics, let’s check in with the audience. As Judi mentioned, most people think they’re better listeners than they actually turn out to be based on feedback. So I’m going to ask the audience: How would you rate yourself as a listener? Do you perceive yourself as an excellent listener, a pretty good listener, an okay listener or a pretty poor listener?

Looks like almost 75 percent say they are either excellent or pretty good, although we do have two admitting to being poor listeners. This probably jibes perfectly with your data, right?

Brownell: Yes, generally people think that they’re pretty good listeners.

Wofford: I’d now like to ask the audience to think of someone you work with who is a great listener. What is it that they do? Give us the one particular characteristic or a bit of feedback they display that demonstrates to you that this person really listens.

Brownell: The responses coming in are what I would expect. People list “eye contact,” “nodding,” “asking follow-up questions,” “focusing,” and “reciprocating.” These are all great and I think asking follow-up questions is probably one of my favorite things about having a conversation with somebody. That’s an indicator that they’re listening. I’m not satisfied when I’m talking to someone and they’ve got nothing but answers.

Wofford: Okay Judi, so what else can people do to develop their listening skills?

Brownell: I want to talk about the LAW of listening, which is Listening = Ability + Willingness. Although listening is a skill that you can develop, nothing really matters if you don’t have a willingness to listen or if you don’t have an interest in focusing on your listening and making it a priority.

I think it’s important that everybody see themselves as someone who can improve their listening, no matter how great or dismal you think you are at listening.

We certainly learn by listening and we facilitate by listening. As a leader you’re not the one who has all the ideas or all the opinions, you’re the one who brings out the best in the team. So a good listener makes sure that all of the people in the group feel like they’re heard.

Listening also builds trust. If you are someone who listens and encourages others to listen, trust increases. When trust increases, so does job satisfaction.

Wofford: And the flip side is that poor listening then leads to lower job satisfaction, right?

Brownell: Yes. Let’s talk about what it means for you as a leader when you are not listening.

I was asked to do a listening training session at a large healthcare organization where the employees were unhappy with the way their managers listened. When I went in to try to find out a little more about the problem I discovered that different employees meant different things by not listening. In some cases they would mean that a manager would say, “Sure, don’t worry, I’ll take care of it” but then didn’t follow through. To them, it was like not listening. In other cases a manager would have an open door policy but when someone would come in to speak to him, he’d be multitasking and doing a lot of other things. So the employees were frustrated with their managers but for quite different reasons.

Over the course of five to ten years of doing a lot of needs analysis and a lot of interviewing and a lot of follow up, we came up with a model that has six interrelated components that represent the different types of skills that contribute to what people think of as effective listening.

I’ll go through each of those from the standpoint of a leader. The first of these is focusing attention. Are you paying attention to the right things? Next is understanding, which is getting more complicated as we have a more diverse workforce and customer base. Then we have memory. If you don’t remember, it affects the way that your listening is perceived. Fourth, interpreting. This has to do with the nonverbal aspects of listening, while the fifth component, evaluating, has to do with making a judgment about something. Finally, the last component we’ll discuss is responding.

So you can see with all of these components that listening is a process. It involves a multitude of different skills and you may be really good in one skill area but not so good in another area.

Wofford: How do you improve in the areas that need it?

Brownell: We have what is called listening strategy, which is a way to focus your attention. There are two components of listening strategy. One is the context. Usually in leadership situations, you’re in a team context. But even if you’re not the leader of the team, you can still have a lot of real influence as a team member by changing your listening behavior. Many times what a team needs is someone who’s really listening and paying attention.

Wofford: What are some of the different contexts that listening can play out in?

Brownell: It could be whether or not you’re listening one on one if you’re in the context of two people. Or listening within the context of the team or within the context of a presentation, where you’re just sitting there listening to somebody speak. Or the context of a mediated communication, which is the type of ‘listening’ that takes place while communicating through texting, email or the telephone. I expanded listening to include texting and all of the ways in which people today, particularly younger people, are communicating because there’s always a listening component to those interactions.

Part of context is how many people are involved. A team situation is the most dynamic because you’ve got all these players. The other element of context is the purpose. You may not always think about it, but whenever you go to talk with someone, there’s almost always some purpose. It can be to learn, to make a decision, to solve a problem or just to get to know someone better. So looking at the context, both in terms of the number of people and the purpose, helps you focus your attention on the things that are important.

We all know about selective attention, which means that you tend to seek out things that confirm your beliefs. But being open minded is so important in listening. You need to at least attempt to understand what the other person is saying, even if you don’t agree with it. It’s fine not to agree, but you need to listen until you understand.

Wofford: When your disagree with someone, do your own beliefs interfere with your ability to really listen?

Brownell: Well, there are a lot of personal factors that influence what you hear. As I mentioned earlier, individual differences and diversity are major factors in our ability to really understand all messages. When I’m listening, I try not to make assumptions. I try to really ask probing questions, questions that show that I’m interested.

Everyone is so different now, with different understandings of things and different amounts of information about things, so you should never just assume what someone may or may not know. Along with that, you should never take for granted that someone is listening to you. You need to look for the visual cues and ask questions. Sometimes when you are listening to someone, asking them if they feel that they’ve been heard is really powerful. To ask, “Do you feel I’ve understood you, and if you don’t, then please tell me more so that I do understand” is pretty effective.

Wofford: That’s a great tip. Do you have any others to help people focus and understand?

Brownell: Well, as you know, a lot of people have trouble with remembering names when they are introduced to someone. It’s typically because they’re not really focusing on listening to the name — instead, they’re focusing on what they plan to say next. So some of that difficulty in remembering is just due to where you’re focusing your attention.

Wofford: I think using people’s names in conversation is a great way to indicate that you’re paying attention.

Brownell: Absolutely, that’s a great tool. When meeting someone, you need to give a firm handshake, have really direct eye contact and then repeat their name: “It’s good to meet you, So-and-So.” That definitely helps you remember their name, and remembering is part of the perception of listening. If you don’t remember, you are perceived as having not listened.

Also, and I think most people are already aware of this, it is very important to be sensitive to the non-verbal elements that either contradict or support what someone says verbally. The non-verbal carries something like 70 percent of the message so you need to try to understand not just the content in the language but also the emotional aspects that are communicated through body language, expressions and vocal characteristics.

Wofford: We had an observation come in from the audience that I find really interesting. This person writes: “When you are known as active listener, especially when you listen with emotional intelligence and show that you actually relate to the speaker, they always try to burden you with personal issues.” Judi, what do you think of that?

Brownell: I think it’s true that sometimes when you’re perceived as someone who will listen, people may take advantage of you. If you are a good listener, you may attract people who are needy and that is a really difficult balance. You need to find a way to get yourself out of those situations. As soon as you realize what is going on, you need to continue to have empathy and project empathy but then you need to say, “I really wish I had more time for this, but I don’t.” If it’s somebody you really care about then you can set up another, more appropriate time to discuss it.

Being a good listener doesn’t mean that you can’t be assertive. Assertive skills can go in combination with listening skills. You need to protect your time because your time is really valuable.

Wofford: I think most of us can relate to being in a situation where someone really wants you to listen to them but for whatever reason you just can’t do it right then. It can be very awkward, so I think that was a great comment from the audience.

There’s another question that I’d like you to weigh in on because I think it’s another situation a lot of people can relate to. Katherine asks: “What if a senior executive you work with does not exhibit healthy listening behaviors? That is, he or she interrupts, doesn’t give feedback, doesn’t probe. How do you handle that?” I suppose there’s no short answer to that one, but do you want to respond?

Brownell: Can you help a leader become a better listener? Well, changing someone else’s behavior is really hard. One of the things I’ve always found is helpful in trying to get someone to really listen to you is to connect with them. Treat them as a real person and not just the person in their role. Learn about their interests. I find that helps them get into listening mode a little bit. Timing is also important. If you approach some people at a bad time, they’re not going to listen regardless. So you can try to strategically select what might be a good time.

Also, maybe the reason they’re not listening is that they have something they want to say. People don’t listen if they also want to speak. If you go to your supervisor and there were things your supervisor wanted to tell you, he or she won’t listen to you until they’ve had the opportunity to tell you what they had in mind for the meeting. After they get something off their chest, they’re much better positioned to listen.

Wofford: Judi, I want to thank you for joining us today.

Brownell: Thank you, Chris. We really had some great feedback from an active audience so I think we’ve got a pretty healthy bunch of listeners out there.

 

Want to hear more? This interview is based on Judi Brownell’s live eCornell WebSeries event, The Art of Listening for Impactful Leadership. Subscribe now to gain access to a recording of this event and other Women in Leadership topics.