Monday, August 31, 2015

The Escalation of Bias

“I don’t care who does the electing, so long as I get to do the nominating.” This gem often is attributed to Boss Tweed, the notorious American political manipulator. In any competition, the surest way to win is to narrow down the list of those in the running. If you are the only viable candidate, you’re in. Competitions often are unfair, but restricting who can race to the top is especially important because it escalates bias to the highest levels.


The escalation of bias goes on every day the world over. What you may not realize is that it happens especially when people think they are being fair. Let me explain.

Slogans like “We are an equal opportunity employer” are seen in many companies, especially in the United States. Although such slogans are not always lived up to, in many places things have improved compared to the past. Although racism, sexism, and other forms of discrimination endure, in many industries we are seeing efforts to hire more fairly. But what about promotion?

The executive suite remains difficult to penetrate for women and minorities in the US, despite the greater fairness in hiring at lower levels. In what feels like a “bait and switch,” we hire for diversity, only to stay with the same old bias when it comes to promotion. This no doubt feels pretty unfair to those who might have merited a promotion, but were passed over because of a superficial characteristic like race or sex. Yet the hidden effect is on the privileged, who then enjoy the escalation of bias.


To see why, consider what happens to someone in the traditionally favored group – white men in the case of the US. For them, hiring equally and then promoting unequally escalates bias. After all, when it comes to choosing the next boss, blessed are those who are surrounded by "unpromotables." If race and sex matter for promotion, then the sure bet is to be the only white man in the running. So it is that hiring policies meant to improve fairness, ironically, may be triggering the escalation of bias.

The escalation of bias operates in many walks of life: The law firm that hires for diversity, but then promotes to partner those who get on with the old boys. The technology firm that boasts of a sex-blind and color-blind hiring process, run by a traditional-looking C-suite and board. We even see it in global competitions among companies. Firms are often allowed to enter another country to compete, only to find out once there that they have restricted access to government permits and the like.

In each of these situations, you get in through a fair process - but you move up through a biased one. When we trigger the escalation of bias, the privileged dominate the race to the top.


Evidence of this kind of effect triggered by hiring temporary workers is reported in my paper with Anne Miner.

Saturday, August 15, 2015

Persistence Trumps the "Pivot"

Changes keep coming. Yesterday’s new thing is likely to be eclipsed by another new thing tomorrow. Many companies try to catch these waves, but only a few last.

What separates the innovators from those who flame out?

Take “cloud computing,” for instance. Tracing this term among Google searches suggests we’re already on the downswing of the hype cycle. Yet many of the products in this space are here to stay. After all, computing over networks continues. Geographic flexibility in networks makes sense regardless of the cool jargon we use to talk about it. Did your company catch this wave? And, if so, is it competing well? How did some companies benefit from the explosion of interest in cloud computing, while for others it was a passing fad?

Weekly Google Searches for "Cloud Computing"

Some say it comes down to being able to "pivot" into new areas fast. 

The opposite is true; it comes down to persistence.

Here is the problem. You can redesign your company to become something completely different overnight, but companies that pivot overnight lack depth. After all, how deep is your ability in an area that you just discovered yesterday? You may be able to offer a product, but you’ll lose the first time you run up against a firm that has a deep background of knowledge. And to have depth of knowledge, you need to maintain a consistent focus over time.

Look again at cloud computing. One good thing about “the cloud” is that it frees us from dependence on a particular geographic location for data storage. This freedom has many benefits, including that your network keeps working even when disaster strikes in one of your data centers. 

A few years ago – even before cloud computing was all the rage – NetApp, the data storage company, was approached by the Swiss stock exchange for technology to deal with this problem. NetApp’s head of Europe back then was Andreas Koenig, a scrappy “can-do” executive with a good understanding of NetApp’s technologies. Koenig knew that NetApp had been doing research for some time on continuous data availability and disaster recovery for networks spanning different locations. So he went back to corporate R&D to find a solution for this customer. There he found “Metrocluster,” a project that had been researched extensively and then shelved by the company’s corporate engineering group. Koenig resurrected the project, to the surprise of some insiders. But the product was a hit in Europe and quickly became an important part of NetApp’s product offering.


Note the key fact in this story: NetApp engineers had been working persistently on the problem for some time – even before it was clear that there was product demand. So when the market took off in cloud computing, NetApp was able to respond well; they had deep knowledge in this area. A number of companies claim to have this kind of product, but how well-developed is their technology? The firm that persists builds its capabilities, and will win against the Johnny-come-lately.

The key to successful innovation is persistence. Keeping your focus over time builds deep knowledge. In a world of fads and fashions, have the courage to stake out a domain where you are the expert. You won’t be all things to all people, but when you do compete, you’ll win.


Systematic evidence of this idea is in my paper with Elizabeth Pontikes.