Tuesday, February 21, 2023

Can Creativity Be Stored? Yes, and It Should Be

For those of us who are not creative, it is difficult to imagine how creative people work. Perhaps we get some ideas from learning techniques such as brainstorming, when a team gets together and talk about ideas, with a ban on critique and an emphasis on letting each idea feed subsequent ideas. That’s a nice image, but it is not at all how creative industries and individuals work. Have you ever thought how unfair it is that the person with the messiest office is often the most creative at your workplace? Actually it is not unfair, and it is not just your workplace.

The explanation for the messy creative person and the uncreative brainstorming session can be found in research by Poornika Ananth and Sarah Harvey published in Administrative Science Quarterly. They had a big study of creative individuals in theatre and architecture, and among their many findings two stood out. Creativity can be drawn from storage. Creativity can be stored.

A key insight is that people who have creativity as their main work do not work on a single project, but many, both in sequence and concurrently. They get ideas and inspiration, which fuel creative outputs, but often these do not fit their current project well enough. What to do with ideas and inspiration that do not fit? Think about them creatively, create symbols that make them concrete and memorable, and store them for later. Try to make the storage systematic enough that they are easy to retrieve later.

What to do with creative projects when no ideas and inspiration are coming? Go to the creativity storage and see what fits. Probably nothing fits exactly, but there will be pieces there that look almost right and can be cobbled together. Creative people, especially when working in creative industries, are good at their work exactly because they have a portfolio of stored creative inputs that they can use in their portfolio of creative projects.

It is interesting how this description of creativity fits a theory of culture known as “culture as a toolkit.” When people have and use culture as a toolkit, culture is partly in their memory and partly picked up from others. They can have many cultural elements, which are not necessarily consistent with each other, and they will draw from those cultural elements to solve problems they encounter. The individual with a large and diverse cultural toolkit is a lot like the creative individual – a large storage of ideas and inspiration, and great ability to solve problems.

Perhaps we should not be surprised? A lot of creativity is culturally judged, and some of it even creates culture. We learn from theatrical plays and from watching buildings, if they are creative. The creative individual who stores and retrieves ideas and inspiration also creates ideas and inspiration for us, and is doing society a great service.

As I finish writing this, I am looking at my office, which is disturbingly tidy for a professor. I still like to think of myself as creative, and maybe it helps that my brain is messier than my office. I do have good memory, though, and I maintain a portfolio of projects that I work for. There is hope for everyone once we understand the processes that lead to creativity.

Ananth, Poornika and Sarah Harvey. 2023. Ideas in the Space Between: Stockpiling and Processes for Managing Ideas in Developing a Creative Portfolio. Administrative Science Quarterly, forthcoming.

Monday, January 16, 2023

Wait, Our Employees Can Also Use Us Politically? Political Activism in Firms

We already know about CEOs making political statements using their firm as a tool – such as leaving California while protesting taxes and regulation, or publicly announcing that they will cover travel expenses for abortions for their employees in abortion-banning states. There is debate over how much CEOs should engage in political debates and use their firms to make statements. But what about employees? Of course, anyone is free to act politically outside work, but it is also possible to use the firm as a tool for public protest.

Research by Alexandra Rheinhardt, Forrest Briscoe, and Aparna Joshi published in Administrative Science Quarterly asks when employees are more likely to use their organization as a tool for making political statements. It focuses on a public protest – the “Take a Knee” movement of players in the NFL (National Football League) kneeling or showing other kinds of protest during the pre-game play of the national anthem. It is a remarkably visible protest because of the TV broadcast of the event, the symbolism of the national anthem, and the clearly visible team uniforms.

Some politicians, some team owners, and some audience members were aghast when this movement began – and many others were delighted. As any real form of protest should be, it was controversial, and it was also a powerful ingredient of the Black Lives Matter movement to protest racism and police violence. But what made some players in some teams join the movement, while others did not? The research found two factors that made the players more likely to use their team as a tool for public protest.

The first was fairness – teams treating their players equally, as expressed through similar pay levels, were more likely to see players emboldened and making protests. Keep in mind that these were protests not against the team, but using the team colors, and they were protests for fairness in society. This makes sense.

The second was openness – teams that were open to the message of the movement, as expressed through having a greater proportion of black players, were more likely to see their players protest. Again, this action is part of the Black Lives Matter movement, so it matters that a team does not specifically favor white players through its recruitment. This makes sense too.

Both fairness and openness made individual players more likely to protest before a game, and it added up to making at least one player in the team, usually multiple, more likely to protest too. This brings us back to what happens when employees use the firm as a tool for public protest. Of course, it is a worthy effort for the employees, who feel strongly about the issue and want to express their views as publicly as possible. But should managers and owners be worried?

That brings us to the last part of the story. Another item predicting protests was that the teams were in more liberal communities – communities that generally agreed with the Black Lives Movement and would likely react positively to players protesting on its behalf. At least in this context, one could argue that the player, by taking an overall controversial stance, brought the team closer to its community. For a move that received so much public attention – even with the president at the time (who has no particular authority on football team hiring decisions) telling teams to fire the protesters – this is an unusually happy ending.

Rheinhardt, A., F. Briscoe, and A. Joshi. 2023 "Organization-as-Platform Activism: Theory and Evidence from the National Football League “Take a Knee” Movement." Administrative Science Quarterly, forthcoming.

Friday, December 9, 2022

Feeding Addiction: Why Do Doctors Over-prescribe Dangerous Drugs?

Here is a disturbing fact: The USA has had a little more than a million deaths from COVID-19, many of them unnecessary because of weak countermeasures – but since 1999, it has also had a million deaths from drug overdoses. Many of these are also unnecessary, because they involve drugs treating insomnia, anxiety, and in some cases pain. The drugs (benzodiazepines and opioids) can create dependence and are dangerous in high doses, so it is the doctor’s (physician’s) responsibility to check need and dosage. They often fail to do so, with deadly consequences for the patient.

Finding out why this happens was the task of Victoria (Shu)Zhang, Aharon Cohen Mohliver, and Marissa King in research published in Administrative Science Quarterly. To get to the core of the problem, the researchers made two important innovations. The first innovation was to look carefully at how doctors are connected to each other through their patient sharing. Patient sharing means that the same patients see more than one doctor and implies that the doctors can communicate and learn from each other. Through their network of patient-sharing peer doctors, they can learn how to follow good practice, or they can learn how to deviate from it.

The second innovation was to distinguish deviant (illegal) over-prescription from marginal over-prescription. Marginal over-prescription is when the doctor prescribes too much according to good practice, but not so much that it clearly violates legal limits. This is a liminal (borderline) practice, and accounts for more over-prescription than deviant over-prescription. Much more: 56 percent is liminal, as opposed to 9 percent deviant. The rest is by doctors who cannot be easily classified as either deviant or liminal.

So how do doctors learn from their network? The answers are disturbing. Any kind of over-prescribing in the network (liminal or deviant) encourages any kind of over-prescribing by the doctor (liminal or deviant). Network misconduct promotes physician misconduct. So what distinguishes between doctors engaging in one or the other of these types of over-prescribing? It turns out that doctors with a central position (many connected peers) or a cohesive position (connected peers are connected to each other) were more likely to engage in deviant, criminal over-prescription. Looser connected network positions encouraged liminal over-prescription.

What about doctors being more or less honest? We often think of people as being different in integrity and willingness to violate norms and break laws. We may even imagine that people differ in their tendencies to build networks depending on who they are. Part of the strength of this research is how carefully the researchers examined this explanation, finding that the network had strong effects even when accounting for many alternative explanations.

Which is not to say that doctor differences don’t exist. In fact, high workloads led to much more liminal over-prescription but only a minor increase in deviant over-prescription. Illegal prescription was mostly related to age – young doctors or doctors near retirement age were more likely to do it.

These are disturbing answers because they show that laws and norms are not enough. Laws regulate deviant/illegal over-prescription, but that accounts for a minority of the dangerous prescription. Norms are learnt, but findings on network effects show that the physicians learn liminal over-prescription just as well as normative best practice. And here is the most worrying part of the research, which I did not write until now. The patient-sharing networks the researchers measured were not captured through shared prescription of benzodiazepines or any other mental health drug—only regular drugs. This research shows that networks not organized around misconduct can produce misconduct learning.

Zhang, Victoria (Shu), Aharon Cohen Mohliver, and MarissaKing. 2022. Where Is All the Deviance? Liminal Prescribing and the SocialNetworks Underlying the Prescription Drug Crisis. Administrative Science Quarterly, forthcoming.

Tuesday, November 29, 2022

Why Heroes Lose: Changing a Piece When the System is Broken

Did you know that companies are full of would-be heroes? They are the managers of subunits, units, functions, and any other subdivisions of the company. They are doing their jobs, keeping their units efficient and fulfilling their goals, but what they really want is a crisis of some sort—a crisis that brings out their true potential as heroes who can make the necessary changes, right the course of the units they are managing, and prove that they should be promoted to greater responsibility.

We like heroes. Companies promote heroes. But few ask the question of whether there are situations in which a hero creates loss for their company, even as they are trying to win by overcoming a crisis. Recent research by Julien Clement published in Administrative Science Quarterly looks at this question and finds some worrying answers. The context for drawing these insights is interesting, by the way, and explains the choice of hero in the illustration. He studies teams in the online game DOTA 2, which experienced multiple challenges due to rule changes.

The start of the insights drawn from the research is that organizations are coordinated systems, so any attempt to change one unit can have consequences for other units. Change in one place usually makes the entire system a little worse, until corresponding changes are made elsewhere. When heroes do their work, they also put other heroes to work.

That is only the start of the insights, though, and the continuation is worse. It is important to also ask why a crisis happens. Maybe it is because the hero’s particular unit experiences a local problem, for example related to the technology it operates, the inputs it gets, or the market for its outputs. But it could also be because of a system-wide problem that affects the entire company. If that happens, problems will occur in multiple units at once, and the changes to each unit will affect other units, creating a very confusing environment where it is hard to tell the difference between the original crisis and the new problems created by other units’ changes. When heroes go to work on the same problem and don’t coordinate, the problem can grow bigger.

If heroes might lose, then what is the alternative? Simple. Any organization has a center, and when the entire organization is hit by a system-wide problem, the center needs to take charge. This is the time for a CEO and top management team to diagnose the system-wide problem and search for a solution. The system needs to change. Of course, the heroes can still be given work, but the task of each one should be defined and distributed centrally. (Notice how this explains why the Marvel heroes always struggle unreasonably much given their abilities – they are not centrally coordinated, but their adversary is.)

The lesson for an organization is clear. The idea of operating it as an independent adaptive system is wonderful for the sequence of small and local challenges that constitute its daily life. At the same time, it is exactly the wrong approach for dealing with larger, system-wide problems that occasionally happen and sometimes spell the difference between success and failure.

Clement, Julien. 2022. Missing the Forest for the Trees: Modular Search and Systemic Inertia as a Response to Environmental Change. Administrative Science Quarterly, forthcoming. 

Wednesday, November 23, 2022

Black or Blue? How Color Gives Position

Should we care about how firms use colors? That sounds like an unusual question, and I will soon give an even more unusual reason we now know something about the topic. Let me first suggest a reason to care, though: firms appear to be pretty conscious of color choices in logos. We may suspect that they rely on outside consultants and imitation quite a bit in selecting colors, of course. Notice how many web platforms and other IT firms seem to have a liking for various shades of blue (Microsoft Edge, Facebook, Twitter, LinkedIn) or have remarkably similar “rainbow” logos (Microsoft, Google, old Apple). So, they seem to care, but it is not clear that they think very independently about their color choices.

How does that observation match our knowledge of color choices? Truth is, we know very little, but recent research by Stoyan V. Sgourev, Erik Aadland, and Giovanni Formilan published in Administrative Science Quarterly gives an interesting start. This research was not about Facebook, though, or any kind of firm: it was about the album covers of Norwegian black metal bands. This sounds somewhat unrelated to how firms choose colors, but if you stay with me a bit, we may be able to make a connection.

The researchers showed that indeed color matters a lot for positioning, and in two ways. The first is that color is chosen with respect to peers. To position themselves initially, the black metal bands’ album covers primarily featured black (obviously) and other very dark or muted colors, and these color choices were influenced by peers’ choices. The second is that color is chosen with respect to the environment. Black metal bands were for a while under attack societally because of non-music activities such as church arson. Interestingly, their album cover design choices became less black during this time period, which made sense given a wish to dissociate themselves from news stories about crime and associated stigmatization.

Although most firms are very different from black metal bands, we can suggest some connections. Colors do seem to indicate similarity with peers or competitors, so early choices of color by a group of similar firms or an industry probably matter a great deal. Color is also seen as symbolic, at least implicitly, and firms will pay attention to this symbolism. Exactly what symbolism is influencing the choice of blues by web platforms and other IT firms is not entirely clear to me, but blue does give an impression of cleanliness. (So does white, but white is not a practical color to use as a firm symbol on a computer screen.)

We should also keep in mind that firms can be more strategic in color choices than the copying of color that we see so often. I mentioned that Apple, in its early years, had a rainbow logo similar to the logos currently used by Microsoft and Google. Its current color choice is different: Apple has been black, and it is currently grey. What does that mean? Interestingly, grey is also a color that gives a clean image, though it is arguably cooler than blue. It is also distinctive from the logos used by other firms with similar products and services. For Apple, that could be exactly the point: they have found one more feature shared by firms in the industry that Apple can use to show how unique they are.

We still know little about colors. What we do know suggests that firms care about colors, but they tend to mimic each other. Mimicry does not indicate the most conscious of choices, but as Apple shows, it is possible to make independent choices that can be distinctive and smart. That is worth thinking about.

Sgourev, Stoyan V. , Erik Aadland, and Giovanni Formilan. 2022. Relations in Aesthetic Space: How Color Enables Market Positioning. Administrative Science Quarterly, forthcoming.

Thursday, November 17, 2022

The Market Turn: Are Workers Exposed to the Market Different in Body and Mind?

Our economy and society are currently seeing a big change. Many firms are replacing the traditional management practices of supervision, goals, and managed rewards with a market turn that exposes workers to the risks and rewards of competitive markets. This is seen in many places, from the “contractors” delivering meals or transportation services under app platforms all the way up to investment bankers taking a cut from each deal. Do we know what this does to people?

We do not, which is why research like Alexandra Michel’s recent publication in Administrative Science Quarterly is important. She looked at bankers’ transition into market-exposed roles, which usually happens after 9 years of employment. What she found was remarkable, because it demonstrated that moving from managed rewards to market rewards is a radical change that alters the mind and body of the worker.

Why is that? Think about what life is like for most workers in regular organizations. Their role is defined, their goals are defined, and the work is structured by supervisors or pre-defined organizational processes. It is a predictable life. If they have contingent rewards or incentives, the goals to fulfill have been specified in advance and the resources to reach the goals are in place. At most, things could be unpredictable because managers rank workers, so the rewards to one depend on the others. Still, this is a pretty predictable life.

Market-exposed work is different. The role is to meet demand in whatever form the demand takes. The Uber driver (for example) needs to be in the right place at the right time. The investment banker needs to bring the parties of a potential deal together, so they agree on the terms. This is an unpredictable life. Effort and rewards are no longer connected as well because the market is unpredictable, and there is little reward outside that given by meeting demand. And strangely enough, although highly contingent rewards in conventional organizations make people work hard, the market turn makes people work harder simply because there is always one more potential, but uncertain, reward that seems to be within reach.

The result is overwork. And more importantly, unlike the managed employees, the market-exposed employees mostly blame themselves. After all, they are entrepreneur-like in job description and should be designing work so that they actually meet market demand. Business failure is personal failure, both in their mind and in those of their colleagues, who subscribe to the same belief system.

The solution is obvious. They need to manage their body and their mind in order to be strong enough for the overwork and stress of their role. And this is where it gets scary. The bankers Michel studied read about medical drugs of various kinds and made liberal use of doctors who would give them the medications they asked for. Some of them even found foreign mail-order suppliers of drugs that would enhance the performance of the mind, or conceal fatigue, or handle various medical breakdowns. Because body failure meant business failure, they manipulated their bodies.

Incentives are supposed to be good for organizations, and market incentives especially so because they allow worker and organization to completely agree on what should be done. Only now are we beginning to understand that they can also be exceptionally harmful for the worker.

Michel, Alexandra. 2022. Embodying the Market: The Emergence of the Body Entrepreneur. Administrative Science Quarterly, forthcoming.

Wednesday, November 2, 2022

Do Firms Learn from Failure? Yes, But Not Always Productively

We all try to learn from our failures, and we believe that we usually do so successfully. Similarly, we often think that firms can learn from failures, and this belief is shared by people who observe (and work in) firms and those who study organizational learning. It may be shocking to realize that some of the details on whether and how firms learn are not well documented. For example, we know that firms will change something after experiencing failure, but we are rarely able to measure whether they change the right thing and whether the change is an improvement.

This is why research by Cheon Mok (John)Kim, Colleen M Cunningham, and John Joseph published in Academy of Management Journal is interesting. They checked whether medical device firms could distinguish between failures caused by product features or market conditions and found that they could. So far so good. They also checked whether failures due to product features led to re-entry with a new product, and this is where things got more complicated – and interesting.

The answer is yes, but not always. More importantly, the researchers could distinguish the conditions that made such learning more likely. If the business unit that withdrew a failed product was close to the corporate headquarters – geographically, in the organizational hierarchy, or in product lineup – then it was more likely to re-enter with a new product. What is so distinctive about being close to the corporate center? One feature is attention and surveillance; another is support and resources. These seem like heads and tails of a coin, and clearly either one could have this effect, and most likely they act in concert.

In fact, the findings were even stronger for the more repairable types of failures. If the failure was distinctly from the product design, not the user, then corporate proximity had greater effect. If the product failure was severe, then corporate proximity had greater effect. In both cases, the fault is more obvious and more easily traced to the firm, and accordingly it should be easier to learn from failure. And learn they did.

This is important knowledge for two reasons. First, although we often assume that learning from failure happens, it is often the case that the very things we assume to be true are faulty in some way, and need to be checked carefully. That is also true about learning from failure, because the conditions that make it happen are not always present. The firm with highly decentralized management that is also geographically dispersed and diversified has three strikes against learning from failure. There are many such firms.

This brings us to the second point. From what we know about learning, we should also be able to design organizations that learn well. Given how learning is related to connections within the firm, and the attention (and surveillance, support, and resources) that follows, designing firms with structures that fail to learn is a completely unnecessary error, especially given the costs of simply giving up when re-entry with an improved product would have been possible.

If we know how firms learn, we can design them to learn well.

Kim, Cheon Mok (John), Colleen M Cunningham,and John Joseph. 2022. Corporate Proximity and Product Market Reentry: The Role of Corporate Headquarters in Business Unit Response to Product Failure. Academyof Management Journal, forthcoming.