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July 2015

HBR OnPoint on "Your Next Move"

OPSU15_500Harvard Business Review's OnPoint (a volume that gathers selected articles from HBR, published four times a year) has its summer issue on "Your Next Move: How to Make a Successful Career Change." The issue reprints "How to Stay Stuck in the Wrong Career" by Herminia Ibarra, which I blogged about here (in fact when you Google how to stay stuck in the wrong career, my blog post is the second result after the HBR article itself! I was so happy to make that discovery), and another very interesting article by Ibarra and co-author Kent Lineback, on "What's your Story?", about the importance of crafting a compelling, coherent personal story to "generat[e] the listener's trust and helps convince your audience that you're a stable, trustworthy person."  

The article "A Second Career: The Possible Dream" by Harry Levinson would be a good starting point for someone trying to explore his options. The article, first published in 1983, has now become an HBR Classic. From the perspective of someone writing in 2015, given the personal and professional growth literature available today, it comes across a bit basic, although it remains highly valuable. (The reader is urged to answer questions such as "What few experiences in your lifetime have been the most gratifying?", "Of all the things you've done, at which were you the most successful?" and of course the self-help favorite, "What would you like your epitaph or obituary to say?") 

Since the issue is about career change, we are treated to the unavoidable "Reinventing your Personal Brand" by Dorie Clark, although if you are older than thirty-five and need Clark to tell you that you have to focus on "leverag[ing] your points of differences" and "develop[ing] a narrative", you have bigger problems on your hands than finding a more fulfilling second career. Perhaps there is a reason the first one did not work out.

Then, Robert Steven Kaplan provides in "Reaching your Potential" advice such as "tak[e] a very personal look at how you define success in your heart of hearts and then fin[d] your path to get there." But the examples show that some executives lose sight of that during their career, and so Kaplan's advice can be helpful for some, I suppose. Some of his other recommendations include: "Identify the 3-4 activities essential for success in your desired or current role. Then develop a plan for excelling in these activities." This article reminded me that we often know intellectually what we have to do to prepare for the next step but we don't do it unless someone sits us down and asks us those questions. So while the questions in this article may not be earth-shattering, there is great value in answering them. 

My favorite article by far in the HBR OnPoint issue was "Firing Back: How Great Leaders Rebound After Career Disasters" by Jeffrey Sonnenfeld and Andrew Ward (who happens to now be Associate Dean in the College of Business at Lehigh University where I work). If you only read an article, make it this one. (If you read two, read as second one the Warren Bennis article I mention in "Further readings" at the bottom of the post.) It is full of insightful examples of leaders who fell from grace, some who rebounded and some who didn't. The wisdom shared in its pages is grounded in the analysis of more than 450 CEO successions, and the authors avoid the truisms of other articles, providing instead a clear process illustrated by many anecdotes about real-life CEOs (cited by name). Jamie Dimon, ousted as president of Citigroup and later to become JPMorgan's CEO, is an excellent case in point, which the authors discuss in some detail. I also enjoyed the narrative about Bernie Marcus, fired as CEO of Handy Dan, who later launched Home Depot. The article is full of backstories I didn't know about, and in these days where relaunching one's career is supposed to be as easy as "crafting a compelling personal narrative", the examples the authors provide serve as a highly valuable reminder that things aren't always so simple, and the career of the best-intentioned, most competent people can run aground through no fault of their own. (Not every CEO ousted is ousted for things he did wrong.) In fact, the most valuable piece of advice in the article was that deposed leaders should not sign non-disparagement agreements so that they can "engage instead in a multitiered campaign to clear [their] reputation and restore [their] stature." A sobering statistic: "In [the authors'] research, 35% of ousted CEOs returned to an active executive role within two years of departure, but 43% effectively ended their careers." Read. This. Article.

And for those of you who are now making a successful transition to a different path, you might find my blog post "In Praise of the Career Pre-Mortem", inspired of HBR's article on performing a project pre-mortem, of value to you.

Further readings (both excellent, and more thoughtful than some of the articles in the OnPoint issue):

  • Warren Bennis on "The Seven Ages of the Leader" describes seven stages for the leader, paralleling Shakespeare's seven ages of man in As You Like It (infant, schoolboy, lover, soldier, general, statesman and sage). Bennis's counterparts are:
  1. the infant executive ("Recruit a team to back you up; you may feel lonely in your first top job, but you won’t be totally unsupported."),
  2. the schoolboy, with shining face ("Your first acts will win people over or they will turn people against you, sometimes permanently."),
  3. the lover with a woeful ballad ("For the leader who has come up through the ranks, one of the toughest is how to relate to former peers who now report to you." with the unescapable reference to Henry IV Parts 1 and 2, and "Leaders new to an organization are swamped with claims on their time and attention. Often, the person who makes the most noise is the neediest person in the group and the one you have to be most wary of... [Renowned psychiatrist Wilfred Bion] warned his students: Focusing your attention on the most clamorous of your followers will not only anger and alienate the healthier among them."),
  4. the bearded soldier ("Over time, leaders grow comfortable with the role... Two things can happen as a result: Leaders may forget the true impact of their words and actions, and they may assume that what they are hearing from followers is what needs to be heard.") 
  5. the general, full of wise saws ("One of the greatest challenges a leader faces at the height of his or her career is not simply allowing people to speak the truth but actually being able to hear it." with the example of Julius Caesar)
  6. the statesman, with spectacles on nose ("One of the gratifying roles that people in late career can play is the leadership equivalent of a pinch hitter.")
  7. the sage, second childishness (" Mentoring is one of the great joys of a mature career.")
  • Robert Steven Kaplan on "What to Ask the Person in the Mirror." ("Over a 22-year career at Goldman Sachs... I have observed that even outstanding leaders invariably struggle through stretches of their careers where they get off track for some period of time." The author explains: "[A] key characteristic of highly successful leaders is... that they develop techniques to help them recognize a deteriorating situation and get back on track as quickly as possible. In my experience, the best way to do that is to step back regularly, say every three to six months... and honestly ask yourself some questions about how you’re doing and what you may need to do differently. As simple as this process sounds, people are often shocked by their own answers to basic management and leadership questions". You will have to read the article to learn the seven types of questions Kaplan recommends asking oneself.)

 


From HBR's June issue

BR1506_500Here are a few highlights from the June issue of Harvard Business Review that caught my attention.

In "You need an innovation strategy" by Gary Pisano, the innovation landscape map shows "how a potential innovation fits with a company's existing business model and technical capabilities." I tend to poke fun at that workhorse of the consulting business, the 2x2 matrix, but found Pisano's map particularly insightful. The distinctions are: "leverages existing technical competences" vs "requires new technical competences"and "leverages existing business model" vs "requires new business model." In the article itself, Pisano argues that "managers should articulate an innovation strategy that stipulates how their firm's innovation efforts will support the overall business strategy." 

A second great 2x2 matrix (I never thought I'd write that) is the centrality-distinctiveness map in "A better way to map brand strategy" by Niraj Dawar and Charan Bagga. It "links consumers' perceptions about brands with their business performance." Four combinations of high/low centrality/distinctiveness lead to the following four quadrants: peripheral, mainstream, unconventional and aspirational categories. Brands are then positioned on the map with bubbles whose size reflects brand performance on a financial metric. The authors conclude: "Each quadrant carries strategic implications for sales, pricing, risk and profitability. The distribution of brands across the map offers insights about competitive opportunities and threats."

I also liked the "How I did it" story of Twitter's cofounder Biz Stone, who discusses how to create opportunities (instead of waiting for them to knock) and "Luxury's talent factories" by Andrew Shipilov and Frederic Godart, on "how companies like LVMH, Kering and Richmond groom designers and managers." Finally, I might want to have my students read "Managing yourself: Conquering digital distraction" at the beginning of next semester.

The issue ends with an inspirational interview of George Mitchell, who took a leading role in the peace negotiations in Northern Ireland, among other accomplishments. His memoir, The Negotiator, was published last month.


Theater Revenue Management Numbers on Broadway

I came across a few articles in the press about ticket sales numbers for Broadway shows the week of July 4, so I figured I'd add my comments, from a revenue management perspective, to the statistics provided by Playbill.com, the New York Times and the Wall Street Journal. (Some of the shows rescheduled the performance that would have occurred on the evening of July 4 to some other time in the week, and a handful of shows took Saturday off completely and rescheduled two shows, but to the best of my knowledge all rescheduling remained within that week, so the gross sales still reflect 8 shows.)

The Lion King, a long-running family-friendly musical at the Minskoff Theatre, grossed $2,143,344 in a theater seating 1,710. With 8 shows per week, that is $156.68 per seat per show. 2015 Tony winner The King and I (a revival at Lincoln Center) grossed $1,241,086 at the Vivian Beaumont theater, which seats 1,080. This amounts to $143.64 per seat per show. Wicked, another long-running musical, grossed $1,864,235 at The Gershwin Theater, which seats 1,933. That is $120.55 per seat per show assuming 8 shows. The numbers for Beautiful: The Carole King musical and Something Rotten are $102.00 and $77.08, respectively. I like the metric of gross sales per seat per show because it accounts for the capacity of the theater and thus provides a better basis for comparison. For instance, Something Rotten had gross sales exceeding the $1 million mark that week (something Broadway seems to pay a lot of attention to), but it is playing in a theater seating 1,709. Beautiful comes in at $860,890 but that theater seats 1,055. 

The metrics used to discuss shows on Broadway matter, because word of mouth and perception of success play such an important role in helping tourists - in town for a limited amount of time - decide which shows to buy tickets to. The media really should report gross sales per seat per show instead go gross sales. According to Wikipedia, the capacity of Broadway theaters ranges from 597 (at the Helen Hayes Theater) to 1,938 (at the Lyric Theater). You can't really compare gross sales for those two extremes without adjustments. Further, different shows with different audience targets will be scheduled into those theaters. (Dames at Sea, opening in October, vs On The Town, if you are wondering.)

I also think adjustments should be made for the shows that have a limited engagement vs those that have open runs, and for the duration that a show has already been running, and for the actual ticket prices and fill numbers (percentage of capacity), and for shows that are family-friendly (in which case more tickets tend to be bought per purchase, since the parents are also buying for their children) to capture the attractiveness of a show to its intended audience. But it is more difficult to figure out how to adjust properly. Those numbers are publicized not because we are all eagerly awaiting the latest gross sales numbers from Broadway every week, but because they contribute to generating momentums for the best shows, and perhaps accelerate the demise of the less-performing ones (if few people are going to see a show, potential audience-members may begin to think that perhaps those people not going know something they don't, and find another show to attend.) This has obvious consequences for many theater folks whose livelihood depend on the success of the production. This is why it is important to publicize good metrics and not just the easy ones that the theaters provide.

And now, Wolf Hall, which ended its run at the Winter Garden Theatre that very week. The media has pointed out that the numbers have been weak (they seem to have been on the low side throughout the run). I saw Part 1 and absolutely loved it. I wasn't able to return to see Part 2 (have been away from NYC much of this year) but Part 1 was visually stunning and remarkably well acted. This was theater at its very best, and if the tourists or even local weren't able to realize it, too bad for them. 

With a capacity at the Winter Garden Theatre of 1,526, the gross total of $346,459 amounts to $28.38 per seat for each of the 8 shows that week. This is not the same as the average paid admission, but the number is indeed very low. According to Playbill, the average ticket price was $52.82 and the show played to "59% capacity crowds and [took] in only 31% of the potential gross." The Google cache of the Wolf Hall webpage states that tickets started at $59 and premium seats at $275.50, with package prices (for Parts 1 and 2) starting at $150. But when I bought my ticket (admittedly not during the week of July 4), the entire center of the seating map was occupied, except for perhaps a handful of seats in the back, and I ended up on the side. So I think there is value in asking oneself how many of the best seats were actually sold at regular (not discounted, day-of) prices, even if there were plenty of empty seats to the sides. If the best seats were sold at full prices, then at least the show found its public. That public may not have had the expected size and the show also suffered from being split in two parts There is also value in distinguishing attendance to Part 1 from attendance to Part 2, which was necessarily lower than at Part 1, since everybody at Part 2 would have first gone to Part 1). In that last week, people not able to find time for both Parts 1 and 2 might have been reluctant to only go to Part 1 in case Part 1 could not stand alone. So Wolf Hall might have particularly suffered from a bad "end-of-run effect", although the play itself was brilliant.  

Here is a New Yorker article about the adaptation to the stage of Hilary Mantel's novel.

And below is the trailer for the play.

And an excerpt of Act 1 Scene 1, filmed in the UK.

Splendid.


Updated Mid-Year Research Group Updates

(This is an update to my previous post. Additions are in italics.)

Here are some quick news about alumni and current members of my research group:

  • Dr. Mike Dziecichowicz PhD'10, now a manager at Ernst & Young in NYC, recently was an invited speaker at the INFORMS Analytics conference, where he provided an overview of retail credit loss forecasting. I am also very excited to announce that our paper on Robust Timing of Markdowns with Daniela Caro '08, G'09, who did research in my group before continuing on to MillerCoors as a Corporate Pricing Analyst and Industry Analyst, then to INSEAD for her MBA and now to Jefe de Planeamiento Comercial - Interbank in Peru, has just been published in Annals of Operations Research. Congratulations, Mike and Daniela!
  • Dr. Tengjiao Xiao, who graduated last month from Lehigh with her PhD in Industrial Engineering, has started her new position as a Senior Consultant in the New York City office of Ernst & Young. We wish her good luck in this next chapter of her career.
  • Doctoral candidate Shuyi Wang, who just passed her general exam, is interning at Humana in the Dallas/Fort Worth area this summer.
  • Shuyi is supervised by my former doctoral student Dr. Gokhan Metan PhD'08, who recently joined Humana to oversee consumer marketing and advanced analytics after a distinguished tenure at American Airlines (Operations Research Analyst and Senior Analyst) and CapitalOne (Business Manager, Marketing Analysis and Credit Risk Management).
  • Dr. Yang Dong PhD'14, who received honorable mention in the INFORMS Financial Services Section Paper Competition last year, has been promoted to Associate in the Quantitative Research and Analytics group at JP Morgan (after only 8 months on the job! Way to impress them, Yang!). Our paper on "Robust Investment Management with Uncertainty in Fund Managers' Allocation" has just been published online in RAIRO-Operations Research and will appear in the October-December 2015 issue in print.
  • My paper with Dr. Ruken Duzgun PhD'12, "Robust Binary Optimization using a Safe Tractable Approximation", has just been published in Operations Research Letters. (It comes with an AudioSlides presentation, for those of you who don't have time to read the full paper.) Another paper of ours, that one on the theory of multi-range robust optimization, was published in the proceedings of the 2015 INFORMS Computing Society conference in January. Finally, a study on project selection using our multi-range robust optimization is forthcoming in the Winter Simulation Conference proceedings.
  • My paper with Dr. Elcin Cetinkaya PhD'14 on "Data-Driven Portfolio Management with Quantile Constraints" has just been published in OR Spectrum. Our paper "New Product Launch Decisions with Robust Optimization" has just been accepted in Computational Management Science. We hope to have more paper-related news to report soon.
  • ESSEC doctoral candidate Victoire Denoyel, whom I co-advise with Laurent Alfandari, will present our current work at the MSOM conference in Toronto tomorrow (come and see her presentation if you are attending the conference, she is speaking in an afternoon session on Tuesday.) Also, we have finalized our paper on "Optimizing healthcare network design under reference pricing and parameter uncertainty". The paper is now submitted. This version of the paper contains important new results. In particular, the section on incorporating parameter uncertainty is completely new. We also provide insights into the "ideal" solution of the network design problem without quality or satisfaction requirements. Please take a look and let us know what you think!