Have a Great Startup Idea? Beware These Seven Pitfalls.

As a follow-up to his recent presentation on what makes a great startup idea, Cornell entrepreneurship expert Bradley Treat has returned to eCornell to discuss some of the common pitfalls that often keep great business ideas from succeeding. Below is an abridged version of his discussion.

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People often go down the entrepreneurial path only to discover that their idea actually won’t work before they’ve made it very far. What I want to discuss today is how to spot potential pitfalls in your business idea and address them early on.

Most of this presentation comes from a class I teach at the Johnson School called “The Business Idea Factory”, which helps students work through a business plan or business pitch.

YOU DON’T ALWAYS HAVE TO GO BIG

Most times, when we are looking for great business ideas, we look for really big markets. We’re thinking of being as big as Walmart, which basically sells everything to everybody.

But there’s always a counterpoint. The counterpoint to Walmart is a company called Fox 40, which makes whistles. The founder of Fox 40 was a hockey referee. As he was refereeing a hockey game, he went to blow his whistle – it was one of those metal ones with a little bounce-around cork thingy – and it didn’t blow. Maybe it was cold, covered with sweat or whatever, but it didn’t work. Some of the players saw him raise his hand to indicate a penalty but some did not and, as a result, a player got hurt.

He said, “Okay, I need a whistle that always works in all situations.” And so he developed a whistle that is loud and works whether it’s wet, cold, high-altitude, you name it.

When he said, “I’m going to make a whistle that always works,” was that a huge market? Of course not. But is it a great company? Yes. The whistles have become very popular with the military, the police and lifeguards.

My point here is that you can go big, or you can play small, and still find success.

HIGH MARGIN ISN’T THE ONLY MODEL

Another thing we tend to think about when starting a new business is high margins. We like businesses with high margins, but there is again a counterpoint to be made.

For example, Harley Davidson has extremely high margins on their motorcycles. And people who buy Harleys are not buying them just to get from point A to point B. It’s a state of mind, it’s who you are. You can go to a tattoo shop and choose multiple options for Harley Davidson tattoos. Harley is a brand for life and they tend to keep people. The motorcycle aficionados out there would probably say that if they made a list of bikes with the highest-performing, cutting-edge technology, Harley Davidson might not be at the top. But it’s that brand identity that gives the company such an extremely high margin.

Now look at Costco. I guarantee you will not find a Costco tattoo on anybody. But they do extremely high volume with extremely low margins. They just move a lot of product. Their number one product is toilet paper. So they’re a great counterpoint example of how a low margin/high volume model can work.

EXECUTION TRUMPS ALL

Let’s take Planet Hollywood. This company was started by A-list celebrities – Arnold Schwarzenegger, Bruce Willis, Demi Moore – but it went bankrupt twice. With that kind of marquee value, you might ask, how that is even possible? Or you could look at Dive!, a restaurant that was opened by Steven Spielberg, arguably the greatest movie director of our generation. But the thing bombed. He lost like $20 million on it.

What these examples have in common is that they prove that the success or failure of restaurants and bars is not the concept. It’s the execution.

Great restaurateurs make it look easy. They’re like professional basketball players draining three pointers. But if you want to be successful, particularly in the hospitality or service industry, it’s not about having a great idea. It’s about having the right experience. The truth of the matter is that there are very thin margins in the industry.

I mean, one of the most successful restaurants in the world is McDonalds. Their concept is not that special. It’s hamburgers and french fries. But just think about the volume of food they move. It’s almost unbelievable they can sell their food for as cheap as they do on the margin, but they’re very successful operators.

DON’T MISS THE REST OF THE ECOSYSTEM

Another thing to consider is the ecosystem. Most college students would agree that their textbooks are really expensive. But the textbook ecosystem isn’t just buyer and seller. There is the teacher, there is the institution, the publisher. It’s a very complex ecosystem.

So is the taxi business. It’s much more than just the driver and the rider. There’s a whole ecosystem of dispatchers and cab owners. There are also all the government regulations, and different rules for different places, such as airports.

At first glance, it might look like just two players, but in fact there are often many more. Understanding that ecosystem is very important. And it’s not only about understanding the rules and the players, but also the individual people involved that could impact your business.

NOT ALL ADVICE IS CREATED EQUAL

When you’re starting a business, you should be out talking to a lot of people. What you’ll quickly find is that you’re going to get a lot of conflicting advice. Some people will tell you that your best idea is A, others will say it’s B. What are you going to do about it? Whose advice should you care about?

Try the mosaic method. A mosaic, when you look at it up close, is just a bunch of broken ceramics. But when you step back, you start to see a picture. So you need to have a lot of conversations in order to see that big picture emerge.

The other thing is to make sure you understand the context in which people are giving you advice. A mistake many people make is to put too much stock in the advice they get from investors at the detriment of advice from potential customers. When an angel investor comes in and says, “Here’s what you should do with your business,” people tend to go, “Oh, well, they can write a big check so I should listen to them.”

I would actually discourage you from doing that unless you’re selling to venture capitalists. You should heavily weigh the advice of the people who are most relevant to your business, and if you’re already up and running, those who are actually using it.

ONLINE AD REVENUE – IT’S A TOUGH GAME

When people tell me their plans to do this and that in their app and I ask them how they are going to make money, they almost always say “ads.”

Well, the challenge with ads is the numbers just aren’t there anymore. The way that a lot of online businesses make money through advertising is described in terms of cost per thousand, cost per click, cost per action and so on.

The problem is, these prices have gone into freefall. The cost of ads has dropped precipitously. To make $3, you have to show a video a thousand times. To make $3 million, you’ve got to have a video that is seen 100 million times. Just do the math. You need just insane volume to make money off this.

When somebody tells you their big plans for an app and they say they are going to make money through ads, it means they haven’t thought about the business very well.

YOUR MOM ISN’T YOUR BEST CUSTOMER

The last pitfall I want to touch on quickly is confirmation bias. I see this a lot. Basically, when people are convinced that they have a great idea, they pay attention to all the data that confirms that their idea is great and ignore all of the data that says it’s a bad idea.

I guarantee if you talk to your mom about your business idea she’ll think it’s the best idea ever.
Instead of only listening to those whose inclination is to support you, you really need to go out there and talk to people who don’t know you. The best ones to talk to are your potential customers.

 

Want to hear more? This article is based on Bradley Treat’s live eCornell WebSeries event, What Makes a Great Startup Business Idea? Subscribe now to gain access to a recording of this event and other Entrepreneurship topics. 

Don’t Just Beat Your Competitors, Learn From Them

If you’re starting your own business, you need to know your competition. But rather than viewing your competitors solely as enemies, why not think about what you can learn from them? What are they doing right that you can emulate? Where are they underperforming and how can you use that to your advantage?

As part of our Entrepreneurship WebSeries, Stephani Robson, a senior lecturer at Cornell, joined eCornell’s Chris Wofford to talk through the process of analyzing your competitors. What follows is an abridged version of her webinar presentation.

Robson: Let’s start off discussing the idea of competition. A lot of people see competition as a bad thing. They think of it as somebody to be beaten, someone to be defeated. That’s actually a mistake, because your competitors are probably your best source of information about what your business should and should not be.

There’s a great quote that I like from Otto von Bismarck: “Only a fool learns from his own mistakes, a wise man from the mistakes of others.” That should be your major takeaway from today: competitors are a great source of learning. Think of your competition as someone you’re trying to absorb as much as you can from.

With that in mind, let’s talk about how to figure out who your competition is. A lot of people think competition has to be a company doing the exact same thing — but competition can come from many different angles. It really depends on what you’re trying to sell and what other entities out there are trying to do something similar.

Wofford: But how do you know which ones you’ll really be competing with?

Robson: There’s a method for identifying your competitors that we call “the three Ps.” The first one is “product.” What is it that you intend to sell? The second P is “price” — and by that I don’t mean a specific number, but a price range or a segment. And finally, the third P is “proximity”, which is how close that other business is to yours. Perhaps not physically close, because if you’re not doing a bricks and mortar business it’s not all that important, but certainly how close you are in terms of your mindset.

I typically break down competitive analysis into three parts: macro, vicinity and unit. In the first category, macro, you have competitors that may not be competing with you directly but you can still learn something from them. Next, vicinity, is simply whether there are businesses in your area, whether it’s a physical area or a virtual one, that are going after a similar customer base even if they aren’t necessarily competing with you directly. The last part, unit, involves looking very carefully at specific organizations that are direct competitors to you.

Wofford: It would be great to hear you expand on this.

Robson: Sure. As I mentioned, macro is referring to businesses anywhere that are going after a similar customer experience to what you plan to offer. As an example, let’s take a lemonade stand. If I were going to start my own lemonade business, I would want to look at businesses all over the place that were trying to offer the same kind of experience. That is, not just others selling lemonade, but it could be iced tea or ice cream or basically anything else that is a single serve refreshment that you could walk around with.

First I’d look to see what their product is. What are they selling? What’s the range of items they sell? How are those items packaged? How are they presented to the customer? What’s their price structure – do they have a range of prices or do they offer just one item at one price point?

As you know, people don’t purchase a product just because of a price – they’re looking at the whole value proposition. So when you look at a competitor – whether it’s something directly competing with you or something out there in the world that you think you can learn from – ask, “What’s the value they’re bringing to their customer?”

If I am starting a lemonade stand, I’m going to look at Starbucks and ask what value Starbucks brings to its customers. Very quickly, you’ll see that it’s not just about a cup of coffee. Part of the value proposition for Starbucks is that it’s a brand identity that people feel they can connect to. It’s also products that relate to the consumption of coffee that you may not necessarily think of. For example, Starbucks was one of the top sellers of music for a long time. So, what’s that whole package? What’s the value proposition and how did they do it?

Looking to see what competitors are doing in terms of how they execute is really one of the areas where an entrepreneur should spend a lot of time, even before they’ve really figured out their business. How you execute really makes the difference — it’s not so much about the product.

Wofford: Even a great product can’t save poor execution.

Robson: Are you familiar with the term “servicescape”?

Wofford: No, I can’t say that I am. What’s a “servicescape” all about?

Robson: Servicescape is essentially the environment in which the service takes place. It’s not just the room. It’s the lighting, the seats, the packaging, the branding. It’s the music and the smell. All of that is servicescape and a lot of very successful brands really use it effectively. You can learn a lot from competitors’ servicescapes about how to compete effectively and the things that are connecting with your customer base.

Wofford: I had a good servicescape experience with a lemonade stand. There are some kids in our village, maybe 10 years old, who did the fresh-squeezed thing in a little play area in the center of town. They made a boatload of money and I think that squeezing it fresh is what did it. You saw it being made right in front of you. That was their competitive advantage, right?

Robson: Precisely. For a kid to do that at a lemonade stand is just brilliant.

Wofford: What else should we consider when looking at how competitors provide service?

Robson: When you’re looking at a competitor’s servicespace, you also want to consider their position in the marketplace. Are they market leaders? How quickly are they growing?

Wofford: How do you access that information? How do you find another business’s growth plan?

Robson: Well, it comes from doing some detective work and some judicious Googling. For example, let’s take a business in the lodging sector. There is a company called citizenM, which is a small Dutch hotel company that is growing very rapidly. They have 6 hotels now and the plan is to open 9 in the next year, and 12 in the following year. I found that out by going to their website and digging up a press release.

You can usually find a lot online. A Google News search is often helpful. You can also read up on reviews to learn about the buzz surrounding the business. What are consumers saying about it in online reviews?

The things you really want to get at when you’re looking at these other businesses is how they are emotionally engaging the customer. We all know that in order to be successful in business, it’s really not about what you are selling. It’s about how you make a connection with the person who is buying it. Is it through the fresh-squeezed lemon right in front of the guest, or is it through the servicescape or is it through great social media use? There are always going to be strengths and weaknesses when you’re looking at competition and there are always going to be gaps in the market.

My background is in restaurants so I do a lot of work with restaurateurs and we talk about this idea of gap analysis. That is, a way of figuring out if there is room in the marketplace for your particular concept. So for restaurants, it could be asking if there is room for an old-fashioned meatloaf restaurant, for example.

Wofford: I don’t think there is.

Robson: Probably not, but with gap analysis, you can look at pricing and the quality of concepts that are similar to or adjacent to the concept you’re thinking about developing. You rank them on the two dimensions of price and quality and look for gaps. When you find the gap in that ranking, ask yourself why the gap is there. That will tell you something about whether your business idea is viable or not. There might be a very viable reason for a gap. Maybe there is simply no way to deliver the right experience at that particular price point.

Wofford: I’d like to turn to an audience question now if that’s okay. It’s from Caitlin, who asks: “This is all a little overwhelming. Do you have any advice on how to keep your head above water when getting started? ”

Robson: That’s an excellent question, because I’m throwing a lot of things out there for you to do. The best place to begin is to identify four or five businesses that you admire. They don’t have to necessarily be in your particular discipline, just organizations that you admire and want to learn something from. Then use this competitive analysis approach that we’re talking about to look carefully at those businesses. Once you’ve done that, you sort of get used to the process and if you want to expand it, you can then look at other businesses that are closer to what you are doing. What you want to try and take away is what they are doing right and how you can apply it to your business.

It’s important to recognize that sometimes your successful competitors may have advantages that are really hard for an entrepreneur to compete with. They may have a parent company with deep pockets, for example. To use the restaurant industry as an example again, a lot of people look at Chipotle and think, “I want to be just like them.” Well, guess what? Chipotle was bankrolled by McDonald’s so it’s hard to compete with that kind of money.

But at the same time, there are things that you can look at that might be weaknesses in those organizations. Is their execution reliable? Are they so limited in their offerings that they may be at risk as tastes change? Look for expensive operations that are doing an amazing job and try to come up with a way of doing things less expensively.

Another thing I want to touch on is ubiquity. There is an interesting phenomenon that when a business starts to grow so much that it is everywhere, there starts to be a bit of a backlash against it.

Wofford: This is like the Starbucks effect, right? There are so many Starbucks that people start saying, “I want the anti-Starbucks.” Or someone might want to start their own coffee business that is the anti-Starbucks just because they know they cannot compete with them head-to-head.

Robson: Right. I talked earlier about the concept of macro, which is looking at companies anywhere that are delivering a similar customer experience to what you are shooting for. If you are thinking of something bricks and mortar, then obviously it would be in the physical area that you are thinking of building or renting. If you are looking at a digital business, it could be businesses that are going to be offered in the same venue, like Apple’s App Store, for instance.

What you are looking for is who is there now and who is coming into the market, which can be tricky depending on what kind of business it is. You can also look to see who has failed in this marketplace and why they failed.

It’s also very helpful to look at online reviews. Look at the number of stars and look at the trend. Is there a lot of variation or is it pretty consistent? Look at the number of ratings and who is making the ratings. One of the nice things about these review websites is they tell you something about who the rater is. We know their age, where they are located, how many reviews they have written. I like to look at that very closely to see if the person doing the review is actually the kind of customer that we are going after.

A lot of entrepreneurs make the mistake of thinking that everybody is their customer. That is probably not going to be the most effective strategy. You need to nail down who your customer is and then the reviews from people who fit that profile are going to be much more interesting to you. If the type of customer you’ve identified is giving your competitor 4 and 5 stars, you know that business is probably doing very well at connecting with your customer.

Wofford: I have always found that written reviews are very good for understanding the kinds of expectations people have. Poor reviews are almost invariably the result of the customer not getting what they expected. On the other hand, a lot of good reviews talk about how their expectations were exceeded.

Robson: Exactly — and it’s also important to remember that you need to be careful with reviews because the two situations you’ve just described are usually what motivates someone to write a review to begin with. So I’m a little cautious about doing too much of a deep dive into the text and instead focus on the average rating.

Wofford: Right. People do not write reviews just to say, “It was okay.”

Robson: I’d like to wrap up by saying that you need to cast a wide net to learn as much as you can. You need to test your ideas. You need to be flexible. You need to be nimble. Those four things together are what describe most successful entrepreneurs.

Wofford: Stephani, thanks so much for joining us today. You really gave some great advice.

Robson: Thank you, I hope the viewers can use it.

 

Want to hear more? This interview is based on Stephani Robson’s live eCornell WebSeries event, Entrepreneurship: How to Learn from Your Competition. Subscribe now to gain access to a recording of this event and other Entrepreneurship topics. 

What Makes a Great Startup Idea

Bradley Treat is the type of guy that carries several business cards. He teaches entrepreneurship at the Johnson School at Cornell and at Ithaca College. He’s involved in the startup incubator Rev: Ithaca Startup Works. And he was also the CEO of the video and voice communications company SightSpeed before it was bought up by Logitech.

So the self-described serial entrepreneur was a natural fit to join eCornell’s Chris Wofford for a WebSeries event on what makes a great startup business idea. What follows is an abridged version of their conversation.

Treat: What I’m going to talk about today is actually an excerpt from a class I teach at the Johnson School called “The Business Idea Factory.” As people begin the entrepreneurial journey, they need to make sure they have some great ideas to start with. We’ll focus on giving you the tools to generate a lot of ideas and then help you filter out the best one and decide where to go from there.

To start the process, ask yourself: “What is a business?”

A business solves a problem that people care about. Someone has to be willing to pay for the solution. To break that down a little bit, the first thing we have to ask is, not what does your business do, but what problem does it solve?

Wofford: So this is really thinking about your potential customer in terms of what problems they might face and what kinds of solutions to that problem they’d pay for?

Treat: Right. Why do they care about solving this problem? Why should they be willing to pay you?

What I want to do next is give you some examples of businesses that solve problems. The first problem we’ll look at is the need to save money.

There’s a company called Forward Air, which is an air freight company that doesn’t own planes and a trucking company that doesn’t own trucks. What Forward Air does is to drive trucks between airports in the middle of the night.

You might say, “But Brad, why would somebody want to drive trucks to airports in the middle of the night?”

Well, what they figured out was a lot of air freight doesn’t have to go on planes. If you were to send an air package from Syracuse to Boston, you’d have to send it by 7pm. It’s not going to leave the FedEx depot in Boston until 7am the next day, so that’s a 12-hour period. They realized Syracuse to Boston is a one hour plane flight or a five-hour truck ride. So why not put that envelope on a truck and drive it to Boston? It’s much cheaper to drive mail than it is to fly mail. Forward Air figured out that they could handle a lot of airmail for the overnight carriers and save them significant money.

I also mentioned that this is a trucking company that doesn’t own trucks. One of the things Forward Air identified was the fact that many trucks sit idle in the middle of the night. So they went to truck owners and said, “Hey, your truck is just sitting there overnight. Let us use it. We’ll drive it, fill it back up with gas and get it back to you in the morning. You’ll make a little money instead of it just sitting in your driveway.” They identified a problem and solved it in a very unique and practical way.

Another example of a company solving the “Save Money” problem is a company called Kettleshell. This company invented a way to turn dumbbells into kettlebells. As you might know from the gym, a kettlebell sort of looks like a Civil War cannonball with a handle on it and there are a lot of workouts you can do with them.

Kettleshell converts a dumbbell into a kettlebell through a handle that bolts right on. If you’ve already got a set of dumbbells, you can now bolt this handle on and do kettlebell exercises using your existing dumbbells.

It’s a tremendous idea but interestingly, the founder originally thought he was going to save people money on not having to go out and buy a bunch of new kettlebells but it turned out that people in urban areas, particularly urban gym owners or urban apartment dwellers, were actually less concerned about the cost than the space. They didn’t have anywhere to put a bunch of kettlebells. So this product ended up solving two problems.

Wofford: It sounds like one of those products where you think, “Why hadn’t anyone thought of this before?” What about addressing problems that aren’t money-related?

Treat: Another area where businesses find success is in making something more convenient.
A good example is Sean Neville, the founder of Simply Audiobooks. Audiobooks are still something that people listen to on a physical medium because so many people listen to them in a car. So Sean developed a subscription service similar to the early days of Netflix, in which subscribers get mailed the audiobook CDs. Part of their innovation was coming up with a packaging sleeve that allowed the company to mail multiple audio discs at once. Unlike Netflix, which would send one disc at a time, Simply Audiobooks would send all of the discs required for a book, which sometimes could be as many as 12.

At the time Sean sold the company to a Toronto private equity firm, they had 25,000 customers and were North America’s number one audiobook rental company. Each one of those customers was paying an average of $25 to $35 per month.

To understand how valuable the convenience they provided is, you need to remember that their number one competitor wasn’t charging anything. Their top competitor was the local public library, where users could get an audiobook for free. But the convenience of having the audiobooks come to your home and being able to send it back and forth was worth $25-$35 a month to over 25,000 people. Convenience is truly valuable even if you’re competing against free.

Another good example is a Cornell company called Rosie. Rosie is an app to do grocery delivery. Now, people typically view grocery delivery as a luxury item for rich people. But what Rosie discovered was that rich people actually like to go to the grocery store. They like to walk the aisles at Wegmans. They like to pick out their own apples.

It turns out that the people who really need something like this are folks for whom getting to the grocery store is actually quite inconvenient. This is primarily people without cars. It could be students, it could be people who can’t afford a car, it could be people who choose not to have a car because they use public transportation for most things. But going to the grocery store is wildly inconvenient if you have to take a bus. You have to fit all of your grocery bags on the bus or you have to pay for a taxi, and that’s both inconvenient and expensive.

So what Rosie discovered is that although they thought they would be selling to rich people, their audience was really those who found the value in paying a very low delivery fee that was cheaper than a cab and more convenient than a bus ride.

Wofford: I know someone who has a modest income with three children under the age of two. With the inconvenience of trying to take the kids to the grocery store, this sounds like a no-brainer.

Treat: That’s a perfect example of who Rosie reaches. The company polled college students and asked why they needed a car and the number one reason given was for going grocery shopping. With Rosie, you don’t need a car anymore. I can also tell you that university administrations don’t like having to deal with a lot of cars and parking and all the permits. They’d prefer that students do not have cars. I also know that here in Ithaca, our mayor is very excited about it because he’s trying to figure out how to get people out of their cars from an environmental standpoint.

Wofford: So this company is actually addressing numerous problems at once.

Treat: Exactly. When you’re thinking about problems, think broadly. It’s not just about saving money or saving time. There are always creative ways of solving a problem for someone out there if you can deliver on it in a meaningful way.

One thing I really like to point out to people is that you do not have to come up with a business that nobody else has ever come up with. It’s a popular myth that a good idea is one that nobody else has ever had. But think of Google. There were all kinds of web search engines that existed before Google but Google came in and said, “Hey, we can do this better, we can do it differently, and we will be able to compete with all of these.” And of course, they didn’t just compete, they completely took over the market.

The way we see it is that if there are no competitors doing it, that’s a problem. It means nobody cares and you don’t want to try to solve a problem that nobody cares about. Having competitors is good — you just need to know your competitors and understand how you’re different and unique from them. If you can be slightly different or slightly better or target a different, underserved market, that’s a tremendous opportunity for you. Don’t get discouraged and just say, “Gosh, somebody already came up with that idea.” Revisit the idea and say, “How can I do it better? How can I do it different? How can I find a new market that is being underserved?”

Wofford: I think that’s great advice. It certainly seems easier to improve upon something that already exists than to invent something out of whole cloth.

Treat: It is. If you can understand how big a problem is for people or how you are better than the competitors at addressing it, you’ll have an edge. Focus on the problem you solve and then you can build an organization around that.

So, where do you find the ideas? You need to put on your entrepreneur glasses and look at the world in terms of problems that you could solve. If they’re big problems, people will pay to solve them. The bigger the problem, the more they’ll pay. Find somebody who has their hair on fire and they will pay you a lot to put it out.

Once you change your lenses and look at the world through different ways, you can actually start coming up with lots of ideas. I would encourage you to put everything on the list.

Wofford: Let’s say you have a list of 100 ideas. How do you know which ones are worth acting on?

Treat: There are certain criteria that we can use to define what makes a good business idea. You have to make sure it’s a good business idea for the customer. We want you to say, “I want to make what customers want to buy.” That should be the focus rather than trying to sell something that you want to make. Understand the customer and build an organization accordingly.

Wofford: I’d like to now turn to the audience and take some questions. We had a good one come through from Lawrence in the chat window while you were speaking: “How should a successful startup value its equity prior to seeking angel funding?”

Treat: I would actually encourage him to not value it. I know that sounds like a dodge, but valuing early-stage companies is extremely difficult to do. It becomes a sort of a thumb in the wind.

Still, there are techniques we can use, the most notable of which is something called convertible debt. What this says is that any money that comes in will be valued at some future date and there is a whole mechanism for doing it. You can actually find a lot of these templates online but basically what it says is you put the money in now, that money will earn interest, and then at some future date it will convert into equity once we have a better way of determining valuation.

Wofford: Here’s another great one: Once you’ve got a good idea for a new or improved product, what’s the best way to go about getting it out there?

Treat: Let’s go back to the Kettleshell example. He made the handle that goes on the dumbbells and he thought he should go out and build a prototype out of steel, aluminum, rubber handles — the whole thing. I said, “Don’t do that. Just make a mock-up.” So he went over to the art supply store, got some styrofoam, some duct tape, and some spray paint. That was enough to make a mock-up that he could put into gym owners’ hands. They were then able to give him feedback and suggest some changes. That styrofoam version turned out to be way more valuable than had he made the real thing. He was able to get pre-orders based on a CAD drawing, essentially. The more you can talk to customers, the better.

Wofford: We’ve got another audience question here, this one from Rohit in India. “I have a great product idea, but building it requires funding. I’ve done my research and believe this product will be the first of its kind. Where and how do I begin?”

Treat: Well, as I said earlier, it is rare that I find something that’s truly one of a kind. So I would challenge Rohit by asking how people are currently solving the problem that his product addresses. You may be solving it in a unique and different way, but how are others currently solving it? If you can go out there and talk to customers and find out what their needs are, then they’ll help you build the products.

I would challenge you, Rohit, to think very creatively about how you can get a minimally-viable product. If the guys from Kettleshell can do it with Styrofoam, then you should be able to creatively come up with some way to demonstrate your product.

Wofford: We have a question from Lance, who asks if you can recommend any other resources for generating ideas.

Treat: The best way to come up with a lot of ideas is to talk to a lot of people. Ask them open-ended questions about what problems they face. The more open-ended, the better. What’s your top expense? What check do you hate writing each month? What is one thing that you do in your job that you wish would just go away?

If you’ve currently got a job, look at the company you are at right now and ask yourself “What’s something that my company does now but shouldn’t be doing because it’s not our core business?” That could help you spin it out into a whole new business.

Wofford: Those are all great ideas. We’ve unfortunately run out of time, so I want to thank Brad for joining us and thanks to all of you in the audience for posing such good questions.

Treat: Thanks Chris, this has been fun.

 

Want to hear more? This interview is based on Bradley Treat’s live eCornell WebSeries event, What Makes a Great Startup Business Idea? Subscribe now to gain access to a recording of this event and other Entrepreneurship topics. 

How to Plan and Prepare for Organizational Change

The Greek philosopher Heraclitus said that “the only thing that is constant is change”. This is true both in life and in business. Organizational changes are inevitable. It’s how we handle them that matters.

As part of eCornell’s Women in Leadership webcast series, Amy Newman from the School of Hotel Administration at Cornell University joined eCornell’s Chris Wofford for a discussion on how to effectively communicate and prepare for organizational change. What follows is an abridged version of their discussion.

Wofford: Amy, it’s great to have you again.

Newman: I’m glad to be here. Thanks for having me.

Wofford: Amy and I have done this before. About a year ago, we did a webcast on crisis communications. That’s pretty related to this but tell me, Amy, what are we going to learn here today?

Newman: The focus is on managing a change and communicating that change. What I’ve found is that organizations are pretty good at implementing change but they often forget to actually communicate with people both internally and externally. Sometimes, the external communication seems to be the priority in companies. They’ll tell their investors and their customers but often forget that employees are important ambassadors of the change and are the ones who will actually implement the change.

Wofford: All right. So what is the value of communication planning?

Newman: Well, let’s look at some research. In a paper published in Corporate Communications: An International Journal, Wim Elving identified four goals of change communication. The first is to increase buy-in and decrease resistance. We know that people naturally resist change, so the more we can do to prepare them to increase readiness, the more likely that they’ll buy into the change. So that’s one component.

The other is obviously to inform the audience. People need to know there is a change. They need to know how it affects them and what they’re going to be doing differently. Those are kind of the basics, but they’re essential.

Next, we have creating a sense of community or a sense of belonging, and this is the piece I think people don’t really think much about. When people hear there will be organizational change, they worry about layoffs or worry that they’ll have more work to do. There’s a tendency to focus on the negative results of a change, so you want people to feel like they’re part of the process and they’re going to be a critical piece of the organization going forward.

And then finally, it’s important to reduce uncertainty. You need to let people know what they can expect and what is expected of them. This also gives you a better chance that your change is going to be successful.

Wofford: I think a lot of people in the corporate world have probably experienced situations in which hirings and firings and big, sweeping departmental changes don’t always tend to be communicated very well.

Newman: Absolutely. And I think the tendency is to not communicate for a couple of reasons.
One, we simply forget because there are all these logistical things to deal with. But I also think people don’t like to deliver bad news, so they think it’s better to say nothing at all. Of course, that’s not true.

There are really two types of communications strategies for change. One is to inform people of what’s happening, but the second is critical and that’s about creating a sense of community.

I’ll give an example. When Marriott acquired Starwood last year, in one of the early messages that Arne Sorenson, the CEO of Marriott, sent to Starwood associates announcing the change, he said, “It’s strange for us to go from competitors to teammates.” I thought that was just such a great way to say it. He acknowledged that, “Yeah, this is weird.” First we were competitors and now we’re supposed to be part of one big happy family. Everybody’s thinking it, so acknowledging that up front makes people really feel like they’re part of the process.

Wofford: That we’re all in the same boat.

Newman: Exactly. Honesty like that reduces uncertainty and job insecurity. It prepares people for the change and then it ensures an effective change.

Now I thought that there was one goal missing from Elving’s work that I added and that’s to prevent a crisis situation. If you’re not communicating well, at some point your employees can be angry at you. So can your investors or your customers. And we know that social media will respond.

Wofford: There will be a whistleblower tweet out there or something like that, right?

Newman: Yes… It could go viral and, suddenly, in addition to trying to communicate the change, you now also have a crisis situation to handle. So it’s best to get out ahead of things even if it’s bad news.

Wofford: Like in The Godfather when Tom Hagen says, “Mr. Corleone is a man who insists on hearing bad news at once.” Obviously that was great advice.

Newman: That’s right. With bad news, you just need to get it out. In my classes, we talk about indirect communication and direct communication. The older style of thinking is indirect communication for bad news. You know, soften the blow. I don’t think that really works anymore. People want to hear what it is and just get past it.

Wofford: So that’s good advice for crisis avoidance?

Newman: Absolutely. I can share an example where the planning may have not gone so well. This is the Carrier situation and I know it’s a very sensitive one. President Trump got involved.

Wofford: The heating and air conditioning manufacturing jobs in Indiana?

Newman: Exactly. They announced that this plant was moving to Mexico and they did it in a large forum. I mean, I’m not so sure what would be a better choice really, maybe smaller department meetings. There’s no great way to tell 1,400 or so employees that they’ll be losing their jobs but, in this case, someone had an iPhone and recorded it and that’s what went viral for everyone to see. So it did not turn out so well for them and it’s something that they really should have thought about in advance.

I think part of the communication planning process is that you have to assume that any internal message is going to go external.

Wofford: You’ve developed an actual change communication plan, haven’t you? Should we get into that now?

Newman: Yes, I have something that I’ve used for many companies. It’s something to be used for major organizational changes like a merger or acquisition. But even with small department changes like a new system implementation, it would be helpful to think about who we need to communicate to and what our messages are.

Wofford: Okay, so how does it work?

Newman: The major categories are to identify the audiences, to do some work thinking about their potential reactions and to look at some communication objectives. What media or channels are you going to use? What is the timing?

Let’s start with the audience and their potential reactions. I put together a sample involving the closing of a restaurant. In every situation, this is going to be a little bit different but this is the way you might think through that kind of change.

The first thing I would do is to identify all of the audiences. Usually, we get into something called cascading communication where most likely you’re starting at the senior-most level of your organization and working your way down. You’ve got to think about the levels of management and the level of employees involved. So in this case, I’m saying the corporate management team, the restaurant management team and then the restaurant staff. Clearly they need to be notified pretty quickly. The corporate staff might be next and then you might have to notify the local government depending on the local laws. You may want to directly reach out to some VIP customers. Maybe the media will be next.

They all get different messages, different media choices. All of that has to be thought through.

Next is to look at the background of the different audiences and their potential reactions. This is the step I often find is missing. It’s really about empathy, about trying to put yourself in someone else’s shoes. It’s thinking through some of those potential, particularly negative reactions and trying to address them.

Wofford: Right. What else is involved in your template?

Newman: First, let’s look at the communication objectives. You want the corporate management team to understand the rationale and details and then you have to plan communications for their team. And when you’re coming up with these communication objectives, I would really recommend to once again think from that audience’s perspective.

The next thing to consider is responsibility, and this is easy to identify but a little harder to carry out in the communication plan. If we’re using this cascading communication, the corporate management team would communicate to the restaurant management team, for example, and the restaurant GM would communicate to the restaurant staff, probably with the help of H.R.

Next we’ve got to decide on our communication media or channel. You know, the default communication channel is most often email. For 12 years now, I’ve been hearing about the death of email. I’m still waiting for it to die.

Email is particularly effective in communicating bad news. Can you think about why?

Wofford: Well, it’s directed at me. I mean, people are tethered to their phones, right? So there’s an expediency to it.

Newman: Right. Plus, everybody’s getting the same message at the same time. In layoff situations, companies will usually send those messages on a Friday and then people go home so they’re not in their office angrily talking to each other and getting each other riled up.

But there is a downside to email. Many people would prefer a call, or better yet, a face-to-face conversation. So that’s a decision that really has to be thought through.

The last component here is about the dates or the timing of the messages. It is important to think about who should know what and in what kind of sequence. I’ll go back to the Marriott Starwood example, because I think they did a pretty good job overall.

When the announcement was first made, and this was back in November 2015, there was an email from Starwood executives to Starwood associates with a press release that hadn’t gone out yet attached. That was really the first communication, as it should be, because this was an acquisition, not a merger. Starwood associates are the ones who are thinking they might have the most to lose. When that email went out, it was presumably the first that anybody had heard of this.

Next, we get an email from Marriott executives to Starwood associates that came less than two hours later. Clearly this was all well orchestrated and planned. And that was the message I mentioned before, where they say it’s strange to go from competitors to teammates. It was just a very welcoming message. There was also a video with Arne Sorenson that was lovely.
Then, we had the press release. That public announcement was a little later in the day, but at this point employees already knew that it was coming. In other words, they didn’t have to read about it in the press. All of this happened within three hours of that first message.

Wofford: Amy, thanks so much for joining us once again and thanks to all of you who tuned in.

Newman: Thank you, Chris. It’s been a great conversation.

 

Want to hear more? This interview is based on Amy Newman’s live eCornell WebSeries event, Communication Planning: Preparing for Organizational Change. Subscribe now to gain access to a recording of this event and other Women in Leadership topics. 

Want Better Data? Build from the Bottom Up.

At Cornell University’s Center for Hospitality Research, one of the main aims is to make research available in a digestible format for those in the hospitality and service industries. A large part of that work involves helping the industry not only collect significant data but to make sense of it in order to make better business decisions.

As part of eCornell’s webcast series, the center’s director, Professor Chris Anderson, joined eCornell’s Chris Wofford for a discussion on data analytics and why industry professionals should adopt a bottom-up approach to data. What follows is an abridged transcript of their conversation.

Wofford: Welcome. Let’s talk about data-driven analytics and what the bottom-up approach means.

Anderson: The first thing to note is that good analytics is not necessarily new. I’ve been in this space for a little more than 25 years now. What’s really happened in the last five to ten years is that analytics have become much more accessible — and with that new accessibility comes lower costs. As a result, it’s become much more widely adopted.

But I think we’ve kind of lost a bit of what I refer to as the bottom-up approach, which is involving those who are critically close to the business itself in the data analytics. You need to have an understanding of where that data came from, what potential variables you’re missing, and how it was sampled. In order to get the most out of data analytics, you need a firm understanding of the business itself and how things should be working towards some sort of outcome. In the opposite scenario, the top-down approach, we let technology tell us what’s going on and we sort of let the data drive the solution.

Wofford: Can you give us a real-world example of what you mean?

Anderson: I come at this historically from the hospitality space, from the demand and pricing side of things. That space to me has always been fascinating because, in order to price and control a hotel or an airline, you really have to have a fundamental understanding of where demand comes from, how the business manages that demand, and what kind of decisions they can make. You really get this deep insight into how you make money.

So for a lot of data analytics, that becomes this core set of skills and once we’re good at it, then we really understand our business well and it brings a lot of opportunities for us.

Wofford: What kinds of data analytics are relevant to the hospitality and service industries?

Anderson: There are three basic forms of data analytics. The first is what we refer to as descriptive, where we’re just describing what has happened or just reporting. It’s kind of a backward view of the world.

Our second is the predictive world, it’s the forward-looking part of analytics where we’re trying to use our insight from reporting to help us look at relationships and make predictions about the future. And then predictive analytics goes one step further and tries to see what factors resulted in us achieving previous metrics, what we might do to impact those and what the future outcome might be.

The third part is prescriptive analytics. Once you understand where you’ve been and have a good sense of how to go forward, then you want to use some tools and techniques to make sure you’re going forward in the profit-maximizing or cost-minimizing sort of way.

It’s about using a set of tools to help us do the best going forward, given the insight that we’ve been able to extract from this both descriptive and predictive framework.

Wofford: What are those tools? What are you looking for within the data?

Anderson: We use things like optimization, where we are looking at making multiple decisions at a time. We use things like decision analysis and programming.

We work on incorporating uncertainty into our decisions. No decision is made out of certainty, so we don’t want to just ignore that. We want to make decisions knowing that there is some uncertainty and once I make one decision I can adjust to those uncertainties and make subsequent decisions.

We use different tools if there’s a lot of uncertainty that’s evolving over time and we might use another set of tools if there’s so much complexity that it’s hard for us to map out how things are all working together.

We think about the starting block as being reporting. Your goal is really to understand how well you’ve been doing, so you’re focused on key performance indicators. How was I pricing? How was my competitor pricing? We are just looking at some of these things together in concert with our backward-looking metrics.

This really lays the groundwork of the predictive part, in which we are trying to understand that these things may be impacting some of our key performance indicators, and we may look at those in different ways.

Even before we can start to do this we’ve got to collect the data, put it in a data warehouse, and have it organized in some sort of centralized way. One of the trickiest parts about this is we have to make sure that we have a lot of integrity around that data. We want to have a secure process from which we can extract, pull and analyze, but we don’t want to necessarily change that underlying structure.

There are a lot of pieces we have to make sure are lined up so that if we have lots of users, they are not going to distract from the quality of that data.

Wofford: In your experience, do you find that most companies have their data in order or when you go to work with them, or do you find you have a lot of work to do right out of the gate?

Anderson: For most organizations, it’s about getting their data house together. It’s often not well organized.

Wofford: So getting that data organized is almost always the biggest challenge?

Anderson: That’s right.

Wofford: Once things are put in order, are we then looking at the predictive component? You mentioned using this to reduce uncertainty – how do we do that?

Anderson: Well, let’s say you are looking at what your sales were last year. That would provide a naive estimate for the next year, right? But while you might be able to take last year’s average, there is a lot of variance around that average. So our goal is to generate a better estimate for the future that has less variance around it, so it’s a more refined guess. We try to make less naive guesses by using information from other attributes that may be impacting sales. If we know those factors going forward, that will help us refine the estimate for whatever that metric is, whether it’s sales or some other key performance indicator. The predictive part is all about reducing uncertainty and we do that through different kinds of relationships.

Wofford: Like competitive analysis, for instance?

Anderson: Right. How my competitor is pricing relative to how I’m pricing. But we have to be cautious because there’s no point in looking at the impacts of relationships unless you know those factors in the future. My sales are a function of how I price and how my competitors price but I don’t necessarily know how my competitors are going to price tomorrow or next week or next year.

Once we’ve got those two parts under our belts – the reporting and the predictive – then we can start to make better decisions going forward instead of just shooting from the hip. And that entails using a lot of these mathematical tools, along with our knowledge, intuition and expertise, to look at some of this complexity.

The prescriptive part is getting us beyond just making obvious logical decisions and trying to look at how things are interconnected. We don’t necessarily jump into this part unless we have our foundations in the information because the prescriptive modeling component is going to need inputs from reporting or inputs from our predictive components. They’re the critical first two steps before we get into part three.

Wofford: And the prescriptive element involves running a simulation in some way?

Anderson: Yes, you could think of it like that. You can think of a hotel trying to set optimal prices to maximize revenue. To do that, the hotel owners have to have some estimate of future demands and ideally some estimate of future price-dependent demand. That estimate of future price-dependent demand from our predictive analysis will then be input into our optimization models to help us formulate those decisions going forward.

Wofford: We hear a lot about things like “text analysis” and other new techniques that help us look beyond simple numeric data. Can you tell me about that?

Anderson: Think of Amazon reviews. We’re selling products on Amazon and we’re looking at what consumers are saying. We have to be cognizant that other consumers are reviewing that content. They’re paying attention to that average review score on Amazon but they’re also actually looking at what people said about the product. So we need to look for keywords and repetition of those keywords.

Yes, I could read all that information manually, but we can now use tools to help us pull up keywords and their frequencies to help us get a sense of what’s going on.

Wofford: I’m guessing this is probably common across all industries at this point.

Anderson: Yes, because now you can review anything. And there’s hardly any business that doesn’t have some sort of online chat service where consumers are typing information. So it’s about trying to look at what questions they’re asking, what problems they’re having with your product and then asking yourself how you can use that data to improve the product.

There’s just so much unstructured text today so we’re trying to look for ways to streamline how we extract insight because we don’t have infinite time to read it. Most of the tools for analyzing text are pretty standardized and most of the algorithms that we can use have been well developed. We’re ten-plus years into things like sentiment analysis so it’s not like we have to reinvent the wheel. There are a lot of off-the-shelf approaches.

Wofford: I’d like to turn to a question from the audience. Peter, who identifies himself as a “non-analytics person” posed this question: “In terms of decisions, I sometimes hear, ‘The numbers don’t support that.’ But it’s often on content that I know has not been marketed. So it seems the decision may be made on numbers that are correct, but that the decision comes from a faulty premise. Is this something you see often?”

Anderson: One of the classic things that I see is that organizations think price is going to impact demand, and they think they are changing prices but what they’re really doing is moving prices seasonally. And when things move together, you can’t really tell the impact of the season versus the price, because those are both adjusting together.
So one of the things we see in that data is that we may not have created the right kind of variance in order to see the outcomes.

Most of us don’t experiment with our business on a regular basis but in order to get insight from data, we have perturb those inputs. It’s just like the science experiments with two petri dishes, where you pour bleach on one and not on the other one to see what kind of bugs grow.

We have to have that experimental mindset when generating this data, because if we’re not making those little perturbations to our business practices, then it’s very hard for us to see how A leads to B because we’ve never manipulated A. Or we’ve only manipulated A at the same time we’ve manipulated B, C and D. If I always drop prices and spend more on marketing together, it’s hard for me to unravel which of those was the driving factor. Our data will not tell us that unless we’re cognizant from the business standpoint of having manipulated those things in such a fashion to generate that variance.

Wofford: So to glean real insight, you’ve got to be willing to take risks?

Anderson: Right. Be like a scientist and do some experimenting. You know, the online world has dramatically changed because of what we call A/B testing. Now it’s so easy to tweak something, so we can do all of these little A/B experiments. It’s very easy to create variances and see the outcome.

Wofford: So in some ways, you describe this as a linear process, but at the same time, it’s not. It’s iterative.

Anderson: It is. One minute to the next. The goal of predictive analysis is to look for robust insight into the future. And that is where, for me, the bottom up approach is critical. Yes, we’re trying to understand your business model but nothing is constant. There could be a new competitor, underlying changes in dynamics or some sort of disruption happening. In order to be robust to those changes, the models that we build from the predictive framework have to be grounded in our business practices.

And that comes from this bottom-up approach, versus just letting the data tell us what’s going on. For me, as a data analyst, it’s always about thinking about my two minute elevator pitch. How do I justify my models and can I clearly explain those models in layman’s terms? If I need to use statistical terminology to explain my insight and my models, that is going to tell me that I’m not necessarily grounded, that I’m relying on the data versus relying on my intuition.

It’s some give and take. You have to go back and forth, but the more bottom-up you are, the easier it is for you to justify models and to communicate those models to other people.

Wofford: I want to thank Chris Anderson for joining us today.

Anderson: Thank you, Chris, this was great.

 

Want to hear more? This interview is based on Chris Anderson’s live eCornell WebSeries event, A Bottom Up Approach to Data-Driven Analytics and Why We All Need to Be Involved. Subscribe now to gain access to a recording of this event and other Hospitality topics. 

Want to Lose Weight? Drop the Diet and Get One of These.

The world is in the grips of an obesity epidemic. The UN’s Food and Agriculture Organization warned last year that “adult obesity is rising everywhere at an accelerated pace.” Some 640 million adults worldwide are now considered obese, or roughly 13 percent of the global adult population.  

As part of our Expanding Nutrition Frontiers webcast series, eCornell’s Chris Wofford was joined by professor David Levitsky from the Division of Nutritional Sciences at Cornell University to discuss why so many of us are putting on extra weight and what can be done about it.

Wofford: David, we’ll get into the solutions later but let’s start by talking about the problem. What is age-related weight gain? What is happening physiologically?

Levitsky: Well, I think age-related weight gain is perhaps the most serious medical problem in our country and maybe the world. Age-related weight gain is weight gain that occurs after you stop growing vertically. So after about 18 years of age, you continue to gain weight without growing taller. That age-related weight and the rate at which you gain the weight are the best predictors of whether you’re going to suffer from diabetes, hypertension, heart disease, stroke and many kinds of cancers.

Wofford: I was doing a little bit of research before this and I read that our muscle fiber tissues begin to disappear to some degree and get replaced with fat. Is there a biological reason for that?

Levitsky: Well, the decrease in muscle mass really doesn’t occur until middle age, your 50s or 60s. And it’s not that the muscle is replaced by fat, we’re just adding fat. Most of that weight gain is due to the fact we consume more calories than we expend. Simple as that. Despite all the hundreds of diet books out there teaching all kinds of magic, it is simple energetics.

Now we can ask why we are consuming more calories than we expend… My colleagues and I agree that we live in an environment in which we are surrounded by signals that make it easy. In psychology, we call this priming. So if we see food, it actually makes us want to eat. And we have experimental data showing that if you see people eating, you want to eat. When we see a television commercial containing food, we’ll get up and go to the refrigerator to get something to eat. We are totally surrounded by these stimuli and what is referred to as an obesogenic environment.

It’s obesogenic because simply responding to all the stimuli in the environment causes us to gain weight. And that’s the reason we’re gaining weight as we get older. We’re subjected to more and more of these stimuli and we’re going to respond by eating just a little bit more than we expend.

Wofford: Let’s back up a little bit and talk about your experience as it relates to psychology and nutrition, and the experiment that you conducted several years ago related to weight gain and how it might be prevented.

Levitsky: Okay. This all started for me when I was sitting in my office and I had someone pop in and say that they wanted to study “the freshman 15”, which is the idea that college students gain around 15 pounds during their first year. It turns out it’s less than that – more like 5 pounds – but the problem is real. Nobody was really studying it so I said, “Okay, go ahead and look at it.”

So we gave freshmen scales at the beginning of the semester, had them weigh themselves at the beginning the semester and again at the end of the semester, and by then they had gained about 5 pounds here at Cornell. We didn’t really believe it was real, so I got very excited about these findings because it represented an opportunity to study techniques to try and prevent that weight gain.

The most logical way to lose weight is to say, “I’m just going to reduce my calories by 200 per day.” Diets have been around forever, and forever they’ve shown that they don’t work for the vast majority of people.

They’re still responding to the stimuli in their environment and it gets more and more difficult the more weight you lose. So the traditional way of concentrating on caloric intake fails.

Wofford: Nothing new there. Okay, so you’re doing this study and discover that the freshman 15 – or maybe the freshman 5 – is real. What’s next?

Levitsky: My training is in psychology and it’s in a certain kind of psychology called behaviorism, which is a discipline that’s simply dedicated to your behavior in certain situations. In order to change behavior, you have to have some monitor of that behavior. When it comes to weight, that monitor can simply be stepping on a scale.

So the first thing we tried was to give freshmen scales and ask them to weigh themselves every day and keep a graph of their weight. We found that those who followed through and weighed themselves did not gain weight while those who didn’t follow through gained two and a half kilos. I did not believe it the first time we did the experiment so we replicated it the following year and the results were very clear: those who weighed themselves every day and had a record of their weight in the form of a graph do not gain weight.

But of course, college students do not represent the population so we then used older people at a health center for a two-year study and again, those who continually monitored themselves actually lost weight.

Now we have a project that we’ve just started here at Cornell, working with the staff because neither students nor people who belong to a health club are representative of the population. We’ve recruited staff from the groundskeepers to the police force here — wherever we could find real people who are more representative of the population — and half of them have scales and half of them do not. We weigh everybody at the beginning and we weigh everybody at the end. Our hypothesis is that people who weigh themselves regularly won’t see a weight gain. We’ll have to wait and see how it turns out.

Wofford: What is happening from a behavioral psychology standpoint? When they look at this weight graph, what is happening in their minds? How does that affect what they do?

Levitsky: Well, there are actually three hypotheses that we have been entertaining as to how this works. The first is that it is simply having the information. They look at the scale and say, “Oh, 155 pounds is too much for me.”

A second possibility is that it works as reinforcement. If you see yourself losing weight, you say, “Oh wow, that makes me feel good” and then you are going to reinforce those behaviors that made you lose weight. That is also a possibility but I’m not holding my breath that either one of these two hypotheses will work.

I prefer to consider the third hypothesis, which is based on priming. Just like when you see food and it makes you want to eat that food, we are working on a priming idea where just stepping on a scale is a primer for all the health information that you already know. You know what to eat, you know how you should behave but you need something to stimulate you. I think that is what happens on the scale.

We have done a number of studies in our laboratory where we bring people in for a focus group. Well, we tell them it is a focus group, but it’s not really. We put snack food in front of them and then sometimes we show them advertisements for cars or how beautiful it here is in the Finger Lakes and sometimes we show them food commercials. When we show them the food commercials, they consume considerably more than if we show them a food-neutral stimulus.

But when you have them weigh themselves just before they go in – we don’t tell them anything about why we’re weighing them, we just get their weight – they consumed considerably less.

Wofford: Even though they’re exposed to the same amount of stimuli.

Levitsky: Right, the stimuli is the same but stepping on that scale changes the way you react to things.

Wofford: I’d like to turn to the audience and get them involved. We have a question here from Christine, who says, “I have been stepping on the scale every day for years and I run three to four miles three times per week and yet I have gained at least 10 pounds.” Is this where we get into the issue of the quality of the calories?

Levitsky: Well, stepping on the scale does not produce magic. It should be a means of informing you of where you are. If she’s gained ten pounds over a few years, she can reverse it by making changes to her eating. You have to change something. If you can live without desserts, without snacks or with smaller portions, these are all good techniques to cause that negative energy balance to get you to lose weight. The only thing I would warn her is try not to lose that ten pounds overnight. She has to think of it in terms of a slow return back to her weight and she can do it. I mean, running 10 to 15 miles is no small thing.

Wofford: I’ve got a question here from Marsha. She says, “I weigh myself every day and work out at the gym every day but I could also use a calorie counter app on my phone. I feel like keeping track of the calories is the most influential in my weight control.”

Levitsky: Calorie trackers work but the problem with the trackers, whether it’s movement trackers or diet trackers, is that most people can’t keep that up for long periods of time. People don’t have room for extra things in their lives and inputting that information is an extra thing. That’s why I tell people in our studies to put their scale right by their bed. You get out of bed and step right on that scale and it takes two seconds to get a measurement, but it’s nothing extra you have to add into your life.

Wofford: Erica asks: “Do you believe that weight loss is about 80 percent of what you put in your mouth and 20 percent physical activities?” Is this a common metric?

Levitsky: There are a lot of reasons why people should exercise. However, and I hate to tell you this, exercise has very little effect on what you weigh. The reason is that the body is so efficient that when you go out and spend that energy and then come back and rest, your metabolic rate after you rest actually goes down lower than it would have had you not exercised. So, exercise doesn’t benefit your weight. It does, however, benefit your risk of heart disease, the prevention of diabetes, and the prevention of stroke and cancers.

Wofford: OK, so exercise isn’t going to get you there. It’s all about what you eat?

Levitsky: I strongly recommend that if you try to lose weight, it should be done very slowly. You should lose weight probably at no greater than one percent decrements. So you see what your weight is and then set a goal for a weight at no more than one percent lower than that for whatever time period you need. You need to take it one step at a time. Some people could do it immediately, while for others it will take them a while to figure out that maybe they can’t live without that afternoon snack. And that’s fine. You just try something else like lowering your portion sizes or skipping dessert. You figure out what works for you and then you try to get to that lower value. Once you discover you can live with whatever change you made, then you make another change. You go down another one percent.

I don’t recommend that anybody get below 10 percent weight loss. At 10 percent, you can reverse things like diabetes and lower blood pressure. All of the beneficial effects of weight loss occur at a maximum of about 10 percent weight loss. That’s all you need in order to improve your health. Now, if you want to lose it for other reasons, aesthetic reasons or whatever, that’s another matter.

Wofford: Another question from the audience focuses on so-called good calories versus bad ones. Do you have any thoughts on this?

Levitsky: Healthy food will do the most to reduce your caloric intake. Low fat foods will clearly decrease your caloric intake. If you reduce the portion size, you’ll be satisfied with less food. If you can do without the potatoes, without the the carbs, fine. Are there good carbs, bad carbs or good calories? It makes a great title for a book, but the nutritional science says that a calorie is a calorie.

Wofford: We’ve discussed weight solutions for individuals but is there anything we can do as a society to address this problem?

Levitsky: I think the scale is the most healthy tool that you can use, so why not give out scales? Let the government give out scales to those who want one. It will be cheap for them. It would cost them probably about $50 a scale and they could save millions if they could prevent you from getting diabetes or hypertension.

A number of my colleagues believe that the government should step in and curb food commercials, particularly ones targeting children. I mean, it sounds reasonable but I am very skeptical because the food industry is perhaps one of the most powerful lobbies in Washington.

Wofford: What’s next for you? Are there any new weight-related research projects you’re working on?

Levitsky: My dream experiment that I’ve been trying to do for a while is to work with obese children. We know that if you don’t do anything to help a pre-adolescent obese child, they will become an obese adolescent. We also know that if you do nothing once you’ve become an obese adolescent, you are going to maintain that obesity throughout your life. The chances aren’t just extremely high, it is almost a certainty.

So what I want to do is take these pre-obese children and give them and their family scales and see if we can we get these children to grow at a slightly reduced rate by watching their weight. Could that get them into their adolescence in a non-obese state? That’s where I would like to go but I’m still trying to get funds.

Wofford: That’s a noble cause. Isn’t the obesity rate among children something shocking – like over 20 percent?

Levitsky: It is and what is more shocking is the rate at which it’s increasing. The actual rate of child obesity is lower than adult obesity but the rate at which they’re getting fatter is what’s really threatening. And that’s what I want to prevent.

Wofford: We all wish you the best of luck with that. I want to thank the audience for coming today. And thank you David, this has been illuminating for me. I’ve learned a lot today in the short time that we’ve been together.

Levitsky: My pleasure. Thank you.

 

Want to hear more? This interview is based on David Levitsky’s live eCornell WebSeries event, The Only Weigh to Prevent Age-Related Weight GainSubscribe now to gain access to a recording of this event and other Expanding Nutrition Frontiers topics. 

Women are “Bossy” and Men are “Decisive”

What Gender Stereotypes Really Mean in the Workplace and How to Overcome Them

Susan Fleming is a senior lecturer at the Cornell School of Hotel Administration, specializing in entrepreneurship and women in leadership. She’s a veteran of Wall Street and no stranger to the challenges that women run up against in the workforce.

As part of our Women in Leadership webcast series, Fleming sat down with eCornell’s Chris Wofford to discuss the difficult tightrope that women are expected to walk and to dish out advice for how best to navigate situations why gender biases may be at play.

Fleming: Today I’m going to talk about some of the biases and barriers women in leadership roles face as well as some strategies for overcoming them.

I find that when I kick off these presentations, it’s useful to share some information about the current status of women in leadership, at least in the US. Today, women make up just under 50 percent of the US workforce. They also make up more than 50 percent of managerial and professional positions — meaning mid-management and lower middle management positions.

One might logically think that if women are half the population, make up half the workforce and half of the managerial and professional positions, they must also make up half of the leadership positions. But I probably wouldn’t be giving a talk on this if that were the case.

I’m curious to see what our audience might know in terms of the representation of women in a few sectors of our society, the first being Congress, the second being law firm partners and the third being board directors and CEOs within the Standard & Poor’s 500.

Wofford: We’ve got the guesses coming in now. Looks like the audience thinks the percentage of current female Congressional representatives is around 10 percent.

Fleming: The correct answer is that, as of 2015, women made up about 20 percent of the Senate and 19 percent of the House. So when you think that women are half of the population, clearly things aren’t where you might expect them to be on that front.

I often get asked how the United States stacks up against other countries in this. There are 190 direct-election countries in the world and the United States is actually ranked 72nd. Just to give you a bit of context, we are just below Saudi Arabia, Colombia, Greece, and Kenya. And just above Kyrgyzstan and Slovakia.

We often hear our politicians say that we’re the greatest democracy on the planet. To me, democracy would include both genders.

Wofford: Indeed. Do you want to look at law firm partners next?

Fleming: It looks like for the most part, the audience poll is showing answers between 2 and 20 percent. They are pretty much on the mark there. Women account for just under 20 percent of law firm partners. In some ways, you might say there has been a significant increase back from 1995, when women were at about 13 percent. That is a huge increase but it’s a little disheartening with all of the change that you see in our society to only see it go from 13 percent to just under 20 during that time.

Wofford: How did our audience do in guessing the percentage of women in leadership positions within the S&P?

Fleming: Well, two percent was the most popular answer and they pretty much nailed it. When it comes to S&P 500 CEOs, women make up 4.6 percent. Again, there has actually been huge progress mathematically on that. When I first started teaching this, it was one percent. On the board seat side, the answer is about 19 percent.

Wofford: So why are these numbers are so low?

Fleming: There are many complicated reasons. There’s no one thing. It can’t simply be ascribed to discrimination or bias or this idea that women want to have babies. There is a very complicated set of dynamics that are going on culturally and socially that are at play.

The one thing that I really want to focus on today in particular is gender bias and stereotyping.
Gender beliefs, probably more than most people realize, are incredibly powerful in shaping our culture, in shaping the business world, in shaping our behavior and the way that we go about our daily lives.

Part of the reason for that is that gender is the dominant basis for categorization, across virtually all social contexts. Just to give you an example, when you walk into a room of people you don’t know, the first thing that you categorize people on is gender. The next one could be race, it could be class, it could be age, and so on. But gender wins pretty much across the board in every culture.

Another thing that is very important for people to understand is that when you bring up the word stereotyping, and you start talking about bigotry, you get people very concerned and feeling defensive. But that’s not what we’re talking about here. Most of this is unconscious. Stereotyping is a type of cognitive shortcut. So when we walk into that room, we don’t have the mental energy or time to differentiate everything about everyone in the room, yet we want to behave appropriately. So we use those cognitive shortcuts in order to guide our behavior.

The downside of stereotypes is that all of those associations that we make, while they might be right and they might be useful, they might also be wrong. So if you walk into a meeting assessing a woman, you might immediately associate feminine characteristics as being more communal and less aggressive. But perhaps the woman is more aggressive than you expected, so you’re reacting to her in a way that is different than you would react to her if she were a man. That’s where stereotypes get us in trouble.

Wofford: So even though these things sort of spring into mind subconsciously, they can still affect how you respond to a given situation?

Fleming: Right. I want to talk a little bit about the content of gender stereotypes, and I thought it could be fun to ask the audience to provide one word that’s a stereotypical description of a woman.

Wofford: Okay, let’s see what we got. The first three all say ‘emotional.’

Fleming: That always comes up but, wow, three in a row?

Wofford: Here come some more: controlling, nurturing, bitchy, soft, timid, communicative, sweet, nice, intelligent, weak, sensitive.

Fleming: Look, here we have “unassertive” and “bossy” right next to each other — that’s interesting.

I can see some more are continuing to roll in, but what you see is that many of the stereotypes fall into what we call communal characteristics. And then you see that people list all of these negative words that are applied to women when they violate that communal stereotype. That’s where you get bitchy, controlling, overly assertives.

Wofford: All of which would probably be considered assets for a male, right?

Fleming: For males, it would be an asset. So that’s kind of the content of gender stereotypes and they do change over time, but mostly you see the same answers.

The problem with stereotypes is not so much around description, it’s when they become prescriptive. Those prescriptive stereotypes are what give rise to the comments we saw in the chat box. Controlling, too assertive, pushy, those kinds of things.

We’ve just talked about typical stereotypes about women and men. When it comes to stereotypes about leaders, they tend to fall into the masculine category. Numerous studies across many different countries, different age groups, etc. have consistently demonstrated that when individuals think of the typical leader or manager, they think of a male. They think of those male characteristics. So when you see that aggressive male leader – confident, intelligent, decisive, exercising authority – the world feels right. In contrast, when you consider a female leader, you have inconsistent stereotypes being triggered.

A female leader is supposed to be strong and authoritative, know her stuff, hold her ground and speak her mind, but while doing that, she is simultaneously also supposed to come off as sweet, supportive, nice, communal, kind and gentle — all of those expectations of what an appropriate woman is supposed to be. As a woman who’s worked in the business world, that’s really hard to do simultaneously and the failure to do that triggers a lot of bad things for women leaders. That inconsistency contributes to prejudice against female leaders.

If the female leader is too communal, she’s seen as a poor leader and too weak. If they’re too agentic, they’re seen as competent but they’re unlikable and for women, likeability is a requirement for success. For men, it’s nice to be likeable but there’s a lot more leeway for a man than a woman to be likable and be tough.

That creates what we call the Double Bind, which is having to walk a tightrope between being simultaneously assertive and smart in order to be seen as competent while simultaneously being nice and warm in order to meet stereotypes of communality. The people that don’t navigate that tight rope well will be either labeled as an incompetent or as a bitch.

Wofford: It seems like a no-win situation.

Fleming: I like to use the Sarah Palin – Hillary Clinton illustration. The political media painted Clinton as the bitchy and unlikable one while Palin was the incompetent bimbo. So women in politics often get painted into one corner or the other.

There was a really funny clip recently on Jimmy Fallon where Hillary Clinton was on and he had her give a talk and he critiqued it by saying, “No, you’re being too loud.” “No, you’re being too quiet.” “Could you be a little less pushy?” or “You’ve gotta want it more.”

Wofford: You hear others say she should smile more.

Fleming: Right, exactly. Fallon said that too and then she smiled and he’s like, “Come on.” So, it was illustrating that Double Bind. It’s a funny clip.

The Double Bind is really important but I also want to touch on some other stereotypes about women’s competence. There are a lot of stereotypes about other things, around women’s commitment, around their credibility, around their organizational fit, but what I really want to touch on is competence.

Women are perceived to be generally less competent than men. The difference isn’t huge but it’s there and it will particularly show up when you’re dealing with male-type tasks. But it’s also true on gender-neutral tasks. In experimental studies where people are assessed doing a general neutral task, women will be assessed lower despite the exact same performance. That’s because there’s bias that they’re less competent.

There was a study in which an identical essay was put out but when you attached a woman’s name as the author, the essay was rated lower even though it was identical to the one bearing the man’s name.

Another barrier that women have to deal with is what we call shifting standards for evaluating men and women. Some researchers did a study on hiring for the position of police chief, which is a very male-typed position typically. They created two resumes, one that had more experience and one that had more education. They then pre-tested them with no names on them and they were evaluated as fairly equivalent. Then they put a woman’s name on the one with more education and a man’s name on the experience one. When they asked people which one they would pick, they picked the man and they justified their decision by saying he had more experience.

Then they flipped the names so that the woman’s resume had more experience and they still said they’d hire the man. Why? Because he had more education. That’s shifting the standards. Because of these unconscious biases, there is an answer they want to get to and they’ll change their perception of the facts in order to get to the answer that makes them comfortable.

Wofford: And these unconscious biases are something that we all have? Can they be overcome?

Fleming: We all have them. One of the things that I find really insidious is that people will use stereotypes to set expectations for themselves and guide their own behavior. Before anyone else can tell them they can’t do something, they’ve already said, “Well, I was really good at math and I’m interested in it, but women aren’t so good at math or computer science or whatever, so I don’t think I’m going to be good at that.” And so they don’t even try, they opt out into different tracks.

Everyone has biases. The goal is to be aware of them so that you can stop yourself from using them unfairly. I would ask you all to be particularly mindful of this when you’re in a context where you are hiring others or you’re evaluating people for promotion or you’re assessing who should get an opportunity in the workplace. You owe an extra level of attention to make sure you’re not using those stereotypes unconsciously.

And don’t apply stereotypes to yourself. When you’re considering career advancement, you might be unwittingly limiting your own opportunities.

Wofford: I think that’s great advice. Do you have any other pearls of wisdom you want to share before we run out of time?

Fleming: Just a couple other things. If you’re a woman, you need to develop a communication style that responds to the reality of the double bind. Truthfully, I don’t like giving this advice and I’d rather see every individual be authentic and be themselves. I’m a real kind of go-getter, I’m loud, I speak up a lot. I don’t like having to dial back and to sort of be less authentic but I have had to do that at times in order to advance.

I think that one of the great ways to start to change the culture to allow more women into leadership positions is to get into the leadership positions to begin with. You’ve got to get that cycle going and if that means that you have to dial it back and maybe bite your tongue on occasion, that’s an okay thing to do in my view. Then over time, you can hopefully drive change by helping to make more women leaders.

Wofford: So there are compromises that still need to be made before we get to where we want to be?

Fleming: I’m a big fan of changing society, changing culture, changing perceptions and getting rid of stereotypes — but in the meantime, you also have to survive.

When I’m teaching MBAs and teaching undergraduates who are about to go into the workforce, I say to them, “This is your own personal choice. You have to read the environment and read the culture of the organization. But be mindful of how you’re being perceived and mindful that it will be different than the way a man is being perceived who’s doing the exact same thing. And you have to decide if you want to tone it down or not.” That’s their call.

Wofford: Thank you Susan, this has been great.

Fleming: Thanks for having me.

 

Want to hear more? This article is based on Susan Fleming’s live eCornell WebSeries event, Bias, Barriers and Strategies for Overcoming Them. Subscribe now to gain access to a recording of this event and other Women in Leadership topics. 

Here’s What the “Glass Ceiling” Really Means for Women Leaders

Global studies have found that words traditionally defined as feminine in nature, such as expressive, reasonable and loyal, are the words that people most commonly list as the competencies they want to see in their leaders. But if people favor these ‘feminine’ leadership traits, why aren’t there are more female CEOs and board members? In the US, only around 16 percent of corporate board seats go to women, despite women currently holding between 50 to 60 percent of all graduate degrees in the country.

Allison Elias, a visiting assistant professor at Cornell University’s ILR School and expert on gender in the workplace, says the disparity is due in part to a disconnect between what is expected of women and what is expected of business leaders.

In a recent Women in Leadership Webcast hosted by eCornell, Elias suggests that traditionally assigned gender roles affect our perceptions of female leaders. Female leadership candidates have to contend with the often unconscious or unintentional discrimination of males in the hiring role. When a man interviews a woman for a leadership position, for example, his mind may wander to thoughts about her family life, leading him to wonder if she would need a more flexible work schedule than a male candidate.

“Perhaps that employer really wants to hire a woman. Perhaps he has even explicitly declared that he wants to make gender diversity a priority in his organization. But our brains automatically take these cognitive shortcuts,” Elias said.

Even when women achieve the highest positions within a company, they are often hit with what Elias refers to as the “likeability penalty.” Social science research shows that women who are more advanced in their careers are often found to be less likable, too power hungry or too aggressive.

“A lot of women remain in sort of a lose-lose situation. When they behave in a more aggressive or competitive way, they’re punished by being disliked. But if they exhibit traits that are more aligned with their gender role—being warm, supportive, and caring—they might be liked, but they might not necessarily be viewed as competent. Women are punished in a way men are not,” Elias says.

Women also have to contend with an American work culture that expects employees to put work as their first and only priority. Workplaces are too often “structured for a man who has someone to take care of the kids and domestic issues,” Elias said.

“It’s changing a bit, but this ideal worker norm kind of pervades a lot of traditional jobs and that’s a structural way that women face a barrier on their way to the top. A lot of times moving into leadership positions requires always being on, always being responsive to email, never missing days.”

She pointed to a study done by the consulting firm Bain and Company that found that 43 percent of women aspire to reach top management when they start a new job, but that number plunges to 16 percent after the women gain experience within the company. The study showed that women didn’t see themselves as “fitting in” at the workplace, with many of them citing that they weren’t willing to put work above everything else in their lives in order to move to the top.

While everyone is familiar with the concept of the glass ceiling, Elias and a number of other scholars say that the phrase might not be the best metaphor for what women face in the workplace. Instead, they advocate for the ‘labyrinth of leadership’ because all sorts of barriers can block a woman’s progress at different points within her career.

“The glass ceiling metaphor suggests that women are going to be able to ascend and be successful in the workplace until the very top. But when looking at why the talent pipeline doesn’t progress women to the top, the idea of a labyrinth can be more effective because there’s all sorts of barriers that come up at all sorts of points of a woman’s career that can deter her from being able to make it to the end,” Elias said.

 

Want to hear more? This article is based on Allison Elias’ live eCornell WebSeries event, Unlocking the Hidden Leadership Potential Inside Your Company. Subscribe now to gain access to a recording of this event and other Women in Leadership topics. 

Here’s How to Make Innovation Real

There’s a wealth of information on innovation out there, but how can you turn all the theories into action?

Professor Neil Tarallo, a senior lecturer at Cornell’s Hotel School, focuses on how to foster innovation within the workplace in his most recent discussion with eCornell’s Chris Wofford.

Wofford: Neil, it’s great to have you back here with us. What do your students and our webinar viewers need to know about innovation?

Tarallo: My favorite definition of innovation—and believe me, there are many of them out there—was articulated by Peter Drucker, a great researcher out of Harvard who really had a great take on how and where innovation and entrepreneurship come together.

Drucker said, “Innovation is change that creates a new dimension of performance.” I really like that concept of a new dimension. It provides us with opportunities to apply things in a very different way than they’ve ever been applied before.

Innovation really comes in two different levels. One is incremental, or what some people call “sustainable innovation.” And then there is disruptive innovation.

Wofford: Can you walk us through what you mean by those?

Tarallo: Well, an incremental innovation is really a small improvement or upgrade to an existing concept. It can be technology, a product or service. Think of software upgrades that fix minor things or add new features. In the physical world, think of Gillette. They started with a single razor. Over time, Gillette has innovated and created a lot of different things. They went to disposable razors, they have multi-angle blades, they have lubrication bars. So Gillette is an interesting example of how incremental innovation has allowed a company to sustain market leadership for a very long time.

When it comes to disruptive innovation, we’re talking about innovation that changes the way people think about things. Clay Christensen coined the term to describe a process by which a product or service takes root initially in a very small and unnoticed way but gathers momentum as it goes to the market and then people start to really grab onto it.

One of the interesting things about disruptive innovations is that we don’t know if disruption is happening before it actually starts to happen. An example of this, to stay within the shaving realm, is Dollar Shave Club, which has taken us away from the expensive replacement blades by saying they’ll just send you new blades every month for just a couple of dollars.

Wofford: Right, for them it is a subscription-based product and a recurring revenue model for the company. That’s kind of how they get you.

Tarallo: Exactly, and that disrupts the old business model that Gillette created, which was to give you the razor handle and then sell the blades at very high prices.

The important thing to remember is that both incremental and disruptive innovations are necessary for organizations. In my opinion, you need to have a plan for both the incremental improvements that you’ll be doing as well as constantly searching for that disruption that’s going to completely change things.

These two innovations generally focus around three areas: technical innovation, product innovation, and service innovation. A great example of service innovation is how Netflix changed the movie rental business.

But in order for innovation to be successful, you have to create an opportunity within the organization for entrepreneurial behavior to really manifest itself and to take hold. You need an organizational architecture that fosters and supports entrepreneurial behaviors so that you can be chasing after these innovations as you go along.

Wofford: How does a business go about establishing that?

Tarallo: There are two components that I think of when I try to action innovation within an organization. One is what I like to think of as “opportunity discovery” and the second is value proposition design.

When it comes to opportunity discovery, there is a clear methodology that applies. It starts with observation of the market and of potential customers, getting them to talk about their experiences—doing interviews with them to gather information, applying surveys and focus groups and the science behind those. It’s observing people and how they behave as they go throughout their days.

This process is actually called ethnography, which is sort of a fancy word, but it’s really a simple process of just watching people and taking note of what they’re doing and what they’re experiencing as they go through their daily lives. We’re looking for things that are missing for them as they try to accomplish tasks. We’re looking at problems that they encounter that need to be overcome and we’re also looking for pain that they’re experiencing along the way.

In those observations, I’m thinking about three specific behaviors: the functionality of what it is that they’re trying to apply, the social implications of what they’re doing, and also any emotional implications.

Wofford: We have some open-ended questions here that I think it would be good to get the audience to think about. When was the last time that you spoke with your customers regarding their experience with your product, service, or technology? If you would put your answers in the chat window please.

Tarallo: Look at that, someone wrote “just yesterday.” I like that, that’s great. Someone else replied “every single day.” That’s a lot of work so I would be curious how that actually works. Is that through a survey, and what do you do with that information when you get it? That’s really the big thing.

Wofford: That brings me to the natural follow-up question. What do you do with this feedback?

Tarallo: For me, every time a student comes into my office to talk to me about anything, I get information from them for some research that I’m doing about entrepreneurship and how we teach entrepreneurship. I’ll ask a very simple open-ended question, which is “What has it been like for you registering and taking entrepreneurship classes here at Cornell?” And when that student leaves, I have a little red book on my desk and I’ll open it up, put the date and their name and take notes on what they told me. So it’s good to pose these really open-ended questions to get your respondents to tell you stories.

Storytelling is really one of the most powerful tools in this process. When you can get people talking you through their experience, you really learn things you wouldn’t have anticipated.

Obviously an important part of that is to listen carefully, but you also need to look for those nonverbal cues as well as you go along. From there, you can start to generate a hypothesis about what is going on in the marketplace or what is happening within the context of your interest.

Wofford: And what’s the best way to get people to share their stories with you?

Tarallo: It can be through singular and/or multiple engagements, meaning I can sit down with you for an extended period of time and have a longer interview, or we can do multiple engagements where I’m talking to you for 10 to 15 minutes over a long period of time. Both of those are powerful applications of the interview process.

Surveys are another step. Here we start to move away from the qualitative aspects of our research and we start moving more into the quantitative. Surveys primarily help validate hypotheses by reaching a very large sample size. You can also use surveys at the very beginning of your process simply to identify the people that you want to be speaking with to make sure that you have a diverse population in your sample size. You’ll be looking for demographic information like race, geographic location, household income, age, and so on to ensure that you get the right population to ask. Otherwise, your validation is not going to be accurate and you’ll have problems going forward.

Focus groups are another popular thing but I personally stay away from them because there is a real science to focus groups. To run a focus group well, I think you need to be trained in it or you need to hire people to do it for you. And they’re expensive, so when I’m in startup mode, focus groups are generally not something I’ll incorporate.

Wofford: Whichever method you choose, you need to then do something with the information you gather. What do you do?

Tarallo: When we analyze the data, there are a handful of things we do: code the information that we have, look for patterns or anomalies in the information, and then start to generalize and create a narrative around it.

We want to track our assumptions and any biases that we think were brought in and then we want to validate it in the market through a series of controlled experiments and prototyping. We know that these experiments are often designed to fail, but they’ll teach us something that will help us move forward again and take that next step.

I’m a big fan of controlled experiments that are likely to fail, but when they fail, they’re not going to impact our market or people’s perception of our company. I’m not a proponent of the philosophy these days of going out and failing big and failing fast. Failure is just not a good thing, I’m sorry. Controlling it makes a lot more sense, as I can learn more when I do that.

This, in my opinion, is particularly true in the service industries. Service-based businesses are much harder to innovate in and much harder to build business models around. It’s relatively easy to hand somebody a tangible product or put a technology in front of them and have them tell you what’s wrong with it and then you can do an update or a new iteration. But if you’re trying something new out in your restaurant and it results in bad service, most of the affected customers won’t come back to your restaurant a second time. So we want to be very careful. It’s about testing. It’s about failing in a controlled way. It’s about repeating that process until we have what we need as we go forward.

Wofford: Can you tie all of this together for us?

Tarallo: As I’m going through the innovation process, I’m thinking about and utilizing all of the information that I got through the ethnographic research that I’ve done. Through that process of observation, storytelling, interviewing, surveying, and validation, I’m bringing those components in and placing them on the value proposition canvas, which is a powerful tool that presents a graphic illustration of what I’m experiencing and what I’m seeing in the marketplace. I use Post-it notes so that I can take them down and move them as things change, so it’s a very dynamic tool and really lets us get to where we want to go.

My advice to folks is always that if you find yourself sitting at a computer doing research, you’re doing it wrong. It’s all about really interfacing with the marketplace. All your hypotheses need to be validated in the market. We need to be doing those small controlled experiments that help us validate things without damaging our relationship with our customers.

Wofford: Neil, thank you so much for joining us once again.

Tarallo: Thank you, Chris. And just remember, it’s all about getting out there and trying it. You probably won’t succeed the first time you do it, but don’t be dissuaded. Get out and practice. It’s the application of it that you get better and better at.

 

Want to hear more? This interview is based on Neil Tarallo’s live eCornell WebSeries event, A Fresh Look at Innovation. Subscribe now to gain access to a recording of this event and other Entrepreneurship topics. 

Does Your Environment Impact What You Eat?

How to Improve Healthy Eating and Active Living in Rural Communities

America is in the grips of an obesity epidemic. While it may be tempting to lay the blame on personal choices, the reality is much more complicated. It’s hard to live healthily when you have limited nutritious food options nearby or if your community does not provide the types of environmental features that promote physical activity.

As part of our Expanding Nutrition Frontiers WebCast series, Chris Wofford was joined by Rebecca Seguin, an associate professor in Cornell University’s College of Human Ecology, to discuss healthy living in rural communities.

Wofford: Rebecca, what is the current state of affairs when it comes to healthy eating and active living? Why is this something we should be concerned about?

Seguin: I think everybody knows that we have a major problem with the number of overweight and obese Americans. Two out of three adults are overweight, and that is certainly problematic in and of itself. But it also carries all of these additional risks like cardiovascular disease, diabetes, and some types of cancer.

We also have a major epidemic of child obesity, with one in three children being overweight or obese and about one in five children qualifying as actually obese. We know that if individuals are overweight as children, they are more likely to be overweight or obese as adults and that will then carry through all these additional health risks. If current trends continue, the next generation will be the first to die younger and sicker than their parents.

We know that while individuals make their own decisions about what they eat and what they do, they are part of social and physical environments that influence them both negatively and positively. So we need to better understand the features of those environments so we can help guide people towards making healthier living choices.

We can also influence policy at the local, state, and federal levels in terms of policies and guidelines that can help people make better choices and live healthier lives.

Wofford: Can you give us an example of how the physical environment in rural communities affects healthy living?

Seguin: There’s a town in Pennsylvania that we’ve worked with that’s fascinating. There’s a sort of a triangle in the middle of these two state highways and the community center and school are sandwiched in between. You have residential communities on each side of the highways and the children all get driven to school even though they only live a 16th of a mile away.

They have to be driven because there’s no safe way for them to get from their residences to the school or to the other side to the library, which is really the heart of this community. I myself took a walk through this area and it really felt dangerous. There weren’t sidewalks, there weren’t crosswalks. Cars were not looking for pedestrians at all.

So the question becomes whether you could build some structures and start changing social norms that would enable the kids to actually be more active in their daily lives. That’s what we really need. We don’t necessarily need people to be more active by going to gyms. They need ways to become more active in their daily routines.

Wofford: What’s the solution?

Seguin: A local policy might be to organize “walking school buses.” Parents could sign up to take one day a week in which they would help the kids safely walk to school. That’s an example of a residential policy initiative that could really help kids get active in their day-to-day lives.

Wofford: So that ties in to what’s known as the “built environment” concept, right? And doesn’t the same concept apply to things like the availability of healthy food?

Seguin: Absolutely. Something we have to think about, particularly in rural environments, are the small businesses. Small store owners, for instance, are often barely staying in business. So while you might want there to be healthier choices for people in those small town retail environments, in some cases healthier food choices are going to spoil because people aren’t buying enough of them. A local initiative that might actually help drive business would be to use local marketing to highlight some of these healthy options. If you can create enough demand within these small stores, the owners wouldn’t lose money and then they could stock more variety and higher quality products.

Wofford: As you said, the obesity epidemic is a national problem, not something that is confined to rural communities. What are some of the factors behind it?

Seguin: This is really simple stuff but I think it’s important to remind people that when we talk about obesity it is about energy in and energy out. What we want is for people to maintain an energy balance. Even if you are overweight, staying weight stable is a benefit compared to continuing to gain weight. And if you’re obese or overweight and want to lose weight, that means you have to expend a bit more energy and eat a bit less. If you just make those tiny shifts over time, you’ll get closer to a healthier body weight.

A lot of this has to do with sedentary behavior. We’ve built all of this efficiency into our lives and that efficiency has actually caused us to hold onto extra weight and not be as physically active or physically fit.

Two out of three people are not getting any daily physical activity. And at our schools, this number is a little out of date, but around 90 percent of children have no physical education classes. We need people to be more active. We want them to engage in vigorous physical activity. We want them to do a range of leisure activities and to simply sit less.

We’re all sitting down a lot but there are little things you can do to help: just getting up and moving around, parking a couple blocks away when you’re running errands, taking the stairs, that sort of thing. Those little bits of activity really add up throughout the day.

Wofford: Activity is one thing, but what about what people eat?

Seguin: We really need to see a shift in eating patterns, like eating more whole grains and having fruits and vegetables take up a much bigger bit of real estate on your plate, as well as having a variety of protein sources.

Let’s look at what Americans are eating. Too much in the way of refined grains, not enough in the way of whole grains. Too much in the way of added sugars and sodium. I don’t think people realize all of the foods that have added sugar. Bread and cereal are good examples. Both can have quite a lot of added sugar—more than people might realize.

Part of this is individual decision-making but part of it is also the social environment. And part of it is the built environment—financial access and physical access.

Wofford: Can you tell us about some of these environmental factors?

Seguin: When it comes to health in rural communities, there is a list of questions you need to look at. Is there a sidewalk? Are there crosswalks? Is there a restaurant there? Is it a fast food restaurant? Is there a grocery store? Is the only food store in town the gas station that sells convenience food? The built environment matters.

When people think about the environment, they think about things in nature but when we talk about the built environment, these are man-made features: streets, playgrounds, sidewalks, community centers, et cetera.

Wofford: So, making a community more walkable can help with obesity?

Seguin: Yes, but it really depends on a variety of factors. Part of it depends on how far people actually live from where they’re walking. There are also factors related to low-income neighborhoods and minority neighborhoods and there are safety and transportation factors. There’s not a clear answer but in general, community features that we consider to promote active living are associated with lower obesity rates.

Wofford: You mentioned earlier trying to walk a few blocks when out running errands, but in some rural communities the nearest market might be ten or more miles away.

Seguin: That’s right. For a lot of people the closest market is far from home and in a lot of cases it’s not even a good market in terms of healthy choices. That’s what people are faced with. They are basically forced to drive.

We did some work in rural Montana and, in some cases, people out there only shop once every three weeks or more because they are driving 100 miles to a mega-superstore and getting all this food.

Wofford: You hear a lot about “food deserts.” When it comes to access to food, what are we talking about?

Seguin: I think people will often hear the term “food access” and they just think maybe there isn’t a store there. But it’s actually more than that. It’s proximity to the store—can you get there? There are many people, including a lot of the older adults whom I work with, who don’t have access to consistent or reliable transportation. And so, that Dollar Store or the local convenience store becomes their only food access point because they don’t have any other options.

Wofford: A big part of your work has been dealing with the local community members, whether that be in Pennsylvania or Montana or wherever. How did you get people engaged and did you meet with any resistance?

Seguin: We absolutely faced resistance. In food environments, the big issues are working in schools. There are huge barriers involved, like the food that the schools have access to, and time factors for the workers involved.

When it comes to the built environment and a focus on increasing physical activity, the biggest resistance is cost. How do you pay for all of this? It might sound great to build a bridge over those two busy roads to get the kids from the library to the school and then home again. But who’s going to pay for it?

There’s also the capacity issue. People have limited capacity and they’re busy, so how do you keep them engaged over time? That’s an ongoing challenge.

However, through some of the community work that we do, we can see that one of the key motivators for residents in the projects that we run is that they’re incredibly concerned about their children, their grandchildren, and future generations. That motivates them to get involved in changing community environments, because they want their grandchildren to be healthier.

Wofford: We’ve covered a lot of ground here today. Rebecca, thank you for joining us.

Seguin: Thank you, this has been great.

 

Want to hear more? This interview is based on Rebecca Seguin’s live eCornell WebSeries event, Improving Healthy Eating and Active Living in Rural Communities Through Citizen ScienceSubscribe now to gain access to a recording of this event and other Expanding Nutrition Frontiers topics.