Monday, October 6, 2014

4 Important Tips to Prepare for Success


An interesting post by Srini Pillay on a blog at the Harvard Business Review that I recommend   you read and think about.  As the author points out: People often prepare for failure, but rarely prepare for what they will do when they succeed.  And this can cause you unexpected problems.

Here is the gist of the article, with a link to the original.
  1. "Don’t do victory laps.
  2. "Focus on the value you bring, not on winning per se.
  3. "Stay in the “here and now”.
  4. "Reach higher.
"People often prepare for failure, but rarely prepare for what they will do when they succeed. Even when we consciously want to be successful, enjoying that success can be a challenge. By following the suggestions above, you can create a framework for managing success so that you can more reliably sustain your success when it occurs. If you are conscious about these factors, you will create far more opportunities to sustain your success over time."

Click here to read the full HBR article:

The Unexpected Consequences of Success


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Srini Pillay, M.D. is the CEO of NeuroBusiness Group and award-winning author of numerous books, including Life Unlocked: 7 Revolutionary Lessons to Overcome Fear, as well as Your Brain and Business: The Neuroscience of Great Leaders. He is also Assistant Clinical Professor at Harvard Medical School and teaches in the Executive Education Program at Harvard Business School.

Thursday, September 18, 2014

Entrepreneurs Are Not Overconfident Gamblers

next-invest.ru

One facet of the mythology about today's entrepreneurs is that they are major risk takers.  But are they?  This study goes against this stereotype, pointing out that many entrepreneurs take very reasonable risks after considering the costs to their lives.

Over the years I've read studies that point out that many true entrepreneurs are cautious about their decisions to go into business, often working full and part time jobs for the first year or two of their enterprise.

Here's the report on the study:


Entrepreneurs Are Not Overconfident Gamblers
Leaving one's job to become an entrepreneur is inarguably risky. But it may not be the fear of risk that makes entrepreneurs more determined to succeed. A new study finds entrepreneurs are also concerned about what they might lose in the transition from steady employment to startup.

Suggested reading
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In "Entrepreneurship and Loss-Aversion in a Winner-Take-All Society," Professor John Morgan at UC Berkeley's Haas School of Business and co-author Dana Sisak, assistant professor at the Erasmus University Rotterdam, focused on the powerful impact of loss aversion.

Loss aversion, or the fear of losing one's salary at a full-time job, along with its prestige, is directly linked to the amount of effort an entrepreneur puts into a startup. Loss aversion, the researchers found, is what drives most entrepreneurs, not a love of risk.

"There is a view that entrepreneurs are often overconfident gamblers, who thrive on risk, yet there is little evidence to support this view," says Morgan, who studies competition in online markets at the University of California, Berkeley's Haas School of Business. "Entrepreneurs aren't Steve Jobs. They're just ordinary people who want to start a business. I wanted to try to understand a little better what motivated those individuals."

Many studies focus on what makes a successful entrepreneur different than the rest of us. Morgan sought to learn what motivates individuals to sacrifice a secure job, and what determines an entrepreneur's effort to succeed.

The study is based on a theoretical model the researchers developed and was inspired by the dramatic stories people like to tell about risk-taking entrepreneurs.

All entrepreneurs have a "reference point," which defines how they feel about their salary or, say, happiness level, compared to others, Morgan says. That reference point is not connected to profits and losses, but is directly linked to how much or little the entrepreneurs are willing to lose when starting a company.

Morgan and Sisak found an entrepreneur's level of ongoing concern about loss aversion correlates with entrepreneurial effort. In other words, entrepreneurs who put a high stake on avoiding loss -- more so than acquiring new gains -- worked harder.

Morgan used a winner-take-all framework, which is common within the Internet startup environment, for his study of entrepreneurs. Startups such as Facebook or Twitter might not offer the best platforms, but still dominate their markets. In markets such as real estate, where there is no clear single winner, this model would be less appropriate, Morgan says. "For every Facebook, there were hundreds of failed ventures," he says. "We model this aspect of entrepreneurial markets explicitly." This research can help entrepreneurs gain self-knowledge so they make better decisions and have a clear understanding of "why they're doing what they're doing," Morgan says.

"One of the most important traps entrepreneurs fall into is when they're not experiencing success and they become increasingly willing to take risks because of where they are psychologically," he says. "One lesson from the research is to be careful when you are behind. It's not necessarily the best decision to double down."

In other words, risk aversion can be a good thing.

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Story Source:  Materials provided by University of California - Berkeley Haas School of Business. University of California - Berkeley Haas School of Business. "Entrepreneurs aren't overconfident gamblers, researchers say." ScienceDaily, 17 September 2014.

Tuesday, August 26, 2014

Humble Leaders Get More Employee Commitment

Source: mpiweb.org

Those business owners or managers who are more critical of their own leadership style than their employees have the greatest success.  Why?  Leaders with self-insight, who are humble and act as credible role models, are rewarded with committed and service-minded employees.

This is the conclusion in a study conducted among 1500 leaders and their employees.

The leaders were asked to assess their own leadership style, while their employees were asked to assess the same style. The eye of the beholder is in fact important for a leader's ability to create job commitment and a good service climate.

The organisation researchers compared the employees' assessments and the leader's assessments of his or her leadership style, and found that the responses were by no means identical -- rather the opposite.
Suggested reading
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The employees decide
Leaders can think whatever they like about their own leadership style. The study shows that leaders' assessments of themselves have little direct impact on the employees' commitment to work.
"It is only when we compare the employees' and the leader's assessments of the same leadership style that we see how leadership affects commitment and service climate," says organisation researcher Karoline Hofslett Kopperud, who conducted the study with Professor √ėyvind Martinsen and Associate Professor Sut I. Wong Humborstad at BI Norwegian Business School.

Transformational leadership.
When employees feel a leader conducts this type of leadership, it has a positive effect on the perceived service climate in the organisation. It is particularly true when the leader is humble and has a lower opinion of his leadership than his employees have.

"The extent of agreement between the leader and the employees concerning his/her leadership style can both enhance and negate the positive effects of leadership," says Hofslett Kopperud.

Training in self-insight
The extent of agreement between a leader's assessment of herself and the employees' assessment of the same leadership is an expression of the leader's self-insight. Leaders with a strong self-insight demonstrate a good understanding of their own needs, emotions, abilities and behavior. On top of that, they are proactive in the face of challenges.

The researchers recommend that leadership development programs should also contribute to greater correlation between a leader's own assessment of leadership and the employees' assessment. This can be achieved by including training in self-reflection and role clarification with one's nearest staff in the development program.

"It will give the leader a better understanding of how his or her behaviour is perceived and interpreted by the employees," says Hofslett Kopperud.
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Story Source:  Materials provided by BI Norwegian Business School, written by Audun Farbrot.  K. H. Kopperud, O. Martinsen, S. I. W. Humborstad. Engaging Leaders in the Eyes of the Beholder: On the Relationship Between Transformational Leadership, Work Engagement, Service Climate, and Self-Other Agreement. Journal of Leadership & Organizational Studies, 2013

Thursday, August 7, 2014

How your business's religious affiliation safeguards against negative reaction

 

"Customers are more likely to forgive firms when service
failures are associated with religion, no matter what
religion was used in the scenarios: Christianity, Judaism or Islam."

While companies like Hobby Lobby and Chick-fil-A are at the forefront of debate over the religious rights of employers, a new study by a Grand Valley State University researcher shows religious affiliation can safeguard companies against negative reactions to store policies.

Kelly Cowart,
Assistant professor of marketing
at Grand Valley State University
The research, led by Kelly Cowart, assistant professor of marketing at Grand Valley State University, examines the effect of a firm's religious association on customer perceptions of the firm, especially when a service failure occurs. A service failure is defined as limited hours of operation or a temporary store closing.
 
Cowart said the current findings indicate that religious affiliations may buffer against some of the negative fallout that ensues in the wake of a service failure, as consumers do not penalize such firms as heavily as those without an affiliation. "More importantly, the findings suggest that a religious affiliation can garner favor even when the religion is not the dominant religion in society," she said.

Suggested reading
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Two experimental studies were conducted in which participants assumed the role of a customer visiting a restaurant for the first time. In study one, the customer either ate a meal at the restaurant or could not eat a meal due to the restaurant's closing for an annual holy day. In study two, the restaurant is closed for weekly religious worship rather than an annual holy day.

"Results from both studies revealed that customers are more likely to forgive firms when service failures are associated with religion, regardless of attitudes toward the religious group," said Cowart. "The results were similar no matter what religion was used in the scenarios: Christianity, Judaism or Islam."
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Story Source: Materials provided by Grand Valley State University.  Kelly O. Cowart, Edward Ramirez, Michael K. Brady. Religious affiliation: buffering negative reactions to service failures. Journal of Services Marketing, 2014