I recently wrote a blog post for HBR describing why even low-cost retailers should invest more in store labor. Here’s a link to it. My great friend Andrew McAfee has related blog post “Can Normal Companies Provide Good Jobs? Yes.”
One reason I love what I teach and research is because many of the lessons are applicable not just to business but to life in general. During this time of the year, we often read and think about resolutions for the New Year. Here is a bit of advice to those of us who want to stick to our New Year’s resolutions: choose just a few things that really matter and make a 100% commitment; not 90% or 95%, but really 100% commitment.
This advice comes from a case I taught in my service operations course last semester about Bugs Burger Bug Killers (BBBK), a pest extermination company. While all other companies in their industry promised to reduce pests, BBBK promised to eliminate them and gave a 100% service guarantee to boot. They said “if we don’t satisfy you 100%, we don’t take your money.” How much were their customers (hotels and restaurants) willing to pay for a 100% guarantee? A lot! BBBK charged ten times more than their competitors and made a ton of money.
What is beautiful about this guarantee is that it was BBBK’s 100% commitment to it that allowed it to provide it while still being very profitable. The lessons from BBBK are easily applicable to other businesses. When companies make a 100% commitment to their values or principles, they are more likely to be successful in achieving them for at least two reasons: 1- 100% commitment prevents them from giving in to short-term pressures and make exceptions. 2- 100% commitment forces them to make operational decisions or innovations they wouldn’t have made otherwise.
Let me describe these reasons using the following example from life. Say that one of the problems in your life is that you work too much and that you don’t spend enough time with your family. You know that this is bad for your and your family’s long-term happiness. So, during the next year you decide that you will dedicate your weekends to spend time with your family.
1- What do you do when there is an important project that is due Monday and by Friday evening you find out that you are way behind? Would you make an exception just this one time and work that weekend? I bet that without a 100% commitment, most of us would make this exception and many other exceptions like this and have short-term wins, like a project well delivered. But in the end, we will end up working most weekends again and lose in the long-term. We will probably regret all the time lost with our children.
If we are tempted to give in to short-term pressures in the context of our families, imagine how easy it would be to give in to them in the context of business. Unless certain values/principles are practiced 100% of the time, people may be tempted to make exceptions. They may make bad or unethical decisions, especially if they work for companies that are constantly under short-term performance pressures.
Making a 100% commitment to certain values or principles eliminates these exceptions and saves us from making decisions that hurt us in the long term.
2- When we know that we will spend all weekends with our family, our “work time” will be constrained. As a result, we will be forced to find ways to be more productive during the five days we spend at work. We will probably eliminate much of the time we waste surfing the web or hanging out in our colleagues’ offices and make lots of other decisions that make us more productive. We may become so productive that we may end up doing better both professionally and personally.
This again applies so well to companies. In retail, for example, there are some companies that commit to offering good jobs to their employees. They pay higher salaries and offer more benefits than their competitors. Having higher labor costs forces these companies to innovate in ways they wouldn’t have innovated otherwise. As I explain in my recent HBR article, these retailers end up making operational decisions that are very different than their competitors. And in the end, they perform much better than their competitors.
So that’s my two cents for New Year’s resolutions. Make a commitment and stick to it 100%.
Happy New Year!
A couple months ago I was asked to give a speech to Boston area high school students in Harvard College’s Youth Leadership Program. The timing worked for me so I said yes. But as the date got closer I started worrying. This was a leadership program and I was supposed to be inspirational. But preparing a general leadership speech didn’t sound right given that I don’t teach or study leadership. Then I came across a speech that Martin Luther King Jr. made to students at a high school in Philadelphia in 1967. In his speech, King encouraged students to think about their life’s blueprint and said:
Number one in your life’s blueprint, should be a deep belief in your own dignity, your worth and your own somebodiness. Don’t allow anybody to make you feel that you’re nobody. Always feel that you count. Always feel that you have worth, and always feel that your life has ultimate significance.
Secondly, in your life’s blueprint you must have as the basic principle the determination to achieve excellence in your various fields of endeavor. You’re going to be deciding as the days, as the years unfold what you will do in life — what your life’s work will be. Set out to do it well.
If it falls your lot to be a street sweeper, sweep streets like Michelangelo painted pictures, sweep streets like Beethoven composed music, sweep streets like Leontyne Price sings before the Metropolitan Opera. Sweep streets like Shakespeare wrote poetry. Sweep streets so well that all the hosts of heaven and earth will have to pause and say: Here lived a great street sweeper who swept his job well. If you can’t be a pine at the top of the hill, be a shrub in the valley. But be the best little shrub on the side of the hill.
After reading King’s speech, I knew what I wanted to communicate to my young audience. Through examples from different supply chains, I would help them discover the importance of each and every job, from cleaning classrooms to designing computers to sewing zippers on shorts to stocking merchandise at supermarkets. Every job matters! And as King argues, in every job people can achieve dignity and excellence.
I just wish there were more of these jobs. Unfortunately, many companies do not provide jobs where people can feel good about what they do, find meaning, and strive for excellence. Let me give an example from retail, an industry that employs close to a fifth of the US workforce. In this industry, most companies choose to offer bad jobs. I want to emphasize the word “choose” here because my research shows that offering good or bad jobs is not a necessary outcome of being in this particular industry or competing on the basis of lowest prices.
So how bad are retail jobs? Let’s start with wages. According to Bureau of Labor Statistics the mean annual wage for a cashier working 40 hours in 2010 was $19,810, less than half of mean annual wage of all occupations. And working 40 hours a week is not a guarantee even for full-time employees because 94% of retailers consider anyone working more than 30 hours a full-timer. Obviously, the situation is worse for part-timers.
With these wages it is not surprising that retail employees get disproportionately more public assistance than employees in other industries. Here by the way are some depressing data about food stamps.
Beyond low wages, retailers are notorious for providing unstable work schedules. Think about a job where your work schedule changes dramatically from one week to the next and you only learn about your schedule one week in advance. How is that for managing the rest of your life, especially if you have children and depend on a second job to get by?
Low wages, unstable schedules, along with very limited training and little opportunity for advancement are not what I would include in a recipe for dignity and excellence. And lack of dignity and excellence certainly shows when we shop at these stores. We as customers are used to problems like misplaced products, disorganized shelves, obsolete products lingering on the shelves, dirty stores, and poor customer service.
The excuse retailers often make for lack of investment in labor is that this is the only way to provide the lowest prices. So if retailers offer jobs that allow for dignity and excellence customers will have to pay higher prices. I find this presumed trade-off between low prices and investment in employees a wrong one if retailers make the right operating decisions. I’ve studied highly successful retailers ranging from convenience stores to supermarkets to wholesale clubs that not only offer the lowest prices and make a lot of money, but they ensure that their employees have good jobs. And their secret sauce is operations! These retailers consistently make operating decisions that are good for employees, customers, and investors all at the same time.
So there you have it. Operations management enables what Martin Luther King preaches. We don’t have to study leadership to inspire high school students or managers; we can easily do that through studying operations management.
Last week, many of my students forwarded me the New York Times article about female professors at MIT. The article pointed out how difficult it is for women to get tenure—judging from how comparatively few do—and pointed out what universities such as MIT are doing to counteract the bias against women.
My response to all this? Yes, there is compelling evidence that there is bias against women and it’s great that universities are acknowledging it. But for those women who choose to have families, there is an additional structural problem with the tenure system in academia, which I believe is more to blame than bias. Unless universities address this structural problem, things will not improve for women seeking tenure (nor for students seeking tenured women professors and advisors).
At most universities or professional schools, the tenure clock is seven to ten years. During this period, you have to establish that you are the leading scholar in your field. “Leading scholar” has different meanings at different schools. Some schools care most about the number of publications in good journals. Some care most about one big idea that pulls all your work together. Achieving either of these in a race with time is a lot of work. You might wonder how quality of teaching affects getting tenure. Unfortunately, at most universities and professional schools, teaching (good or bad) has no impact on getting tenure.
Once you get tenure, the race with time is over or at least the pressure is gone and you have job security for the rest of your life with rare exceptions. Let’s just think about this system for a moment. Which business academic or consultant would ever recommend to a high performance company that they should give their employees job security for the rest of their lives—not to mention considerable power over the careers of others—based only on what they did in their twenties and thirties? Not many, I imagine. But of course, this is a completely different topic and others have already discussed the pros and cons of the tenure system (See Steven Levitt’s blog).
OK. Back to the structural problem. For many women, the time they are on the tenure clock (the seven to ten years, often starting in their late 20s or early 30s) is exactly the time when they are starting a family and are most needed at home. Obviously, if their spouse is the primary care giver for their children, they can spend their days and nights working diligently on their tenure case while their spouse worries about diapers, doctor’s appointments, and homework. But if their spouse is not the primary care giver, and for most of my women colleagues this tends to be the case, then they face a choice: either they step into the role of being the primary care giver and limit the time spent on their tenure case, or they hire third parties to take care of their children. (This problem probably exists in other high-performance careers, but I am focusing on the one I really know.)
Of course, there are exceptionally talented women who can handle all the domestic activities, put in correspondingly fewer hours on their academic work, and still out-research and out-publish their peers. But they are rare.
Most of us are more likely to lose out one way or the other. I know many women who are tenured or on the way to getting tenured who deeply regret being unavailable during their children’s formative years. They know they will never make up for all the time they took away from their children. I also know of many women who chose to spend time with their children and did not get tenure.
Whose problem is this? Is this choice forced on women by the biological facts of life? I don’t think so. Rather, I think it’s a bad system that can and should be fixed.
The sad part of this problem is that our children are young for so short a time. My own mother constantly reminds me that our children are lent to us for at most 18 years so we should make the most of it. Careers, on the other hand are very long.
So how should universities think about this structural problem? As the New York Times article mentioned, most respond by adding one extra year to the tenure clock when you have a baby. But is one year enough? Why not two years or five years?
If a person can produce tenure-worthy work in her forties or fifties, say, why should she already have been thrown off the tenure track? Conversely, if it is deemed unlikely that anyone could produce tenure-worthy work in her forties or fifties, what are we expecting from all those faculty who were given tenure in their twenties or thirties? Wouldn’t that have been just the time to assume they were washed up and fire them? What are the societal implications of highly educated women opting out of the workplace to care for their children, or conversely, outsourcing parental responsibilities to pursue careers that won’t wait for them?
I would love to hear from others on this.
There have been so many things to write about the last few weeks but so little time to do it. I moderated a panel on work-life balance a couple weeks ago at HBS and I hope to write about it during the next few weeks. But now, while it’s fresh on my mind, I want to write about high levels of product variety.
On February 23rd, the Wall Street Journal reported about proliferation of toothpaste SKUs. According to the article, in January 2011, there were 352 distinct types or sizes of toothpaste at retail stores. When one examines the functions, flavors, and sizes, there could actually be more than 2,000 combinations of toothpaste! The functions include whitening, plaque prevention, gingivitis prevention, cavity protection, tartar control, long-lasting fresh breath, and baking soda & peroxide. The flavors include brisk mint, frosty mint, cool mint, crisp mint, “cinnamint”, vanilla, watermelon, and bubble gum. Toothpaste comes in gel or paste and there are multiple sizes. So maybe 352 is not that bad after all.
But 352 is utterly confusing to consumers. How on earth are we supposed to know exactly what we need when there are so many choices? And the costs of this confusion are well documented in the marketing literature. But as an operations professor, what worries me the most is all the waste associated with high product variety. Clearly there are manufacturing costs associated with high product variety. But there are also inventory related costs. While it is easy to forecast consumption of toothpaste, it’s really hard to do so at the item level when there are hundreds of different types. The difficulty of forecasting translates into poor management of inventory. And there are costs at the store level (I wrote an academic paper on this topic). High product variety drives store employees crazy because it complicates their operating environment.
On a lighter note, I was at Disneyland with my family this weekend and I ran into a situation at a store that struck me. My kids are really into Lego so our trip included spending time at a Lego store. While my kids were amazed by the huge creations at the store, including a giraffe that took more than 250,00 pieces of legos to create, I kept staring at the section that displayed hundreds of different mugs differentiated by names. Here is a photo of a small section:
Yes, maybe some people are excited to walk out of the store with a mug that shows their name. But with the proliferation of names in a multicultural world, how many of the customers will actually be frustrated that their name is not in there? Speaking of my family, none of our four names were available. Maybe we are just a weird family, but I imagine there are many families that visit Disneyland that will encounter similar disappointment.
I have no idea how much a machine that does on-demand printing would cost, but the operations junkie in me kept thinking that there must be a better way to manage this situation.
I have two children and I teach at Harvard Business School. If you ask me which of these two things is more challenging—raising children or teaching at HBS, my answer would be pretty clear. To me, raising children is far more challenging. And teaching definitely did not come easily to me. Ask my first group of students from 2002 and I’m sure they’ll remember all the struggles I had as a first-time teacher. But what made teaching less stressful was the expectation that it was okay to make a lot of mistakes as a rookie.
In parenting, it is hard to move beyond being a rookie (unless you have many, many children). I won’t get to experiment with multiple five-year olds before figuring out how to best manage a five-year old. Plus, each child is so different. This is why I love learning from others’ parenting experiences. I read with great interest Yale professor Amy Chuo’s parenting experience as outlined in the WSJ article “Why Chinese Mothers are Superior.” Apparently, this article generated the largest number of online responses from WSJ readers, ever. Chuo writes:
“A lot of people wonder how Chinese parents raise such stereotypically successful kids. They wonder what these parents do to produce so many math whizzes and music prodigies, what it’s like inside the family, and whether they could do it too. Well, I can tell them, because I’ve done it. Here are some things my daughters, Sophia and Louisa, were never allowed to do:
- attend a sleepover,
- have a playdate,
- be in a school play,
- complain about not being in a school play,
- watch TV or play computer games,
- choose their own extracurricular activities,
- get any grade less than an A,
- not be the #1 student in every subject except gym and drama,
- play any instrument other than the piano or violin,
- not play the piano or violin.”
She goes on to describe the cultural differences between Chinese and Western parenting and offers lots of examples from her family. As I read Chuo’s article and the follow-up articles that appeared in WSJ and NY Times, I kept thinking about my parenting style and realized how many questions with which I struggle all the time. Here are just a couple:
- What is my objective as a parent?
I feel that optimizing my children’s happiness should not be my objective. My objective should be to help shape their character. There are certain traits that I would love my children to have such as kindness, generosity, responsibility, hard work, curiosity, and honesty. But shaping their character, or at least trying to shape their character at this age is not always fun; I often find myself trading off my children’s short-term happiness with discomfort and stress. As a working mom, who doesn’t get to spend all her time with her children, I sometimes wonder what I am giving up as a result of my choice.
- How high should my expectations be?
I would never want to take away the gift of high expectations from my children. I would love for them to excel at what they do. But how do I make sure that I don’t put too much pressure on them? And when setting expectations, how much weight should I give to the outcome, such as getting all A’s, or on the process, such as working X number of hours a night.
- How much should I shape my children’s interests?
On the one hand, I would love for my children to pursue what is exciting to them. I know that if they find something about which they are passionate, they will put more work into it and will be more likely to be good at it. This will improve their confidence and probably make them happy. But on the other hand, I feel that my husband and I might have a better idea of what our children can be really good at. Perhaps this is because of my own experience. I used to love basketball as a kid. I watched my father play and then coach basketball and I absolutely loved the game. So at the age of 10, when my father insisted that I play volleyball instead of basketball, I was heartbroken. According to my father, volleyball would be better for me. While I didn’t like his choice at first, I started loving volleyball after I became good at it. Should I follow my father’s parenting style?
- How busy should my children be?
A lot of kids nowadays start participating in extracurricular activities and taking private lessons at young ages, even as toddlers. And they are always busy going from this activity to that activity. My boys are 3.5 and 5 years old. The younger one goes to daycare all day long and the older one goes to pre-K. When they are not at school, my boys just hang out. During the weekdays, the four of us spend a lot of time at the dinner table (frequently with other guests) and reading books. During the weekends we run errands together, talk, play silly games, let them watch some TV and yes my husband and I go crazy watching them fight or call each other names. I am sure things will change as they get older and activities will have to be added to our calendar. But am I doing the right thing right now? Am I taking away opportunities from my kids?
I am writing this blog to start a conversation around several themes.
The first theme is around my research interests in operations and labor management. I have written extensively about retail operations and just started working on a book that argues for a better way for managing retail stores.
The second theme is around community impact. Through this blog, I want to start a conversation about what young leaders can do to maximize their impact on the world. I am very proud of a new initiative we started at HBS this year. Both HARBUS and Harvard Crimson wrote about the initiative.
The third theme is teaching. It is something I do with absolute joy. I am hoping to connect with educators on how to improve teaching and connect with my former and current students.
The final, and most important theme is family. With two young children, I have the same challenges that many other working moms have. So I look forward to sharing these and learning about yours!