The Paradox of Open Offices: What You Should Know

More and more companies – especially startups – are adopting open office floor plans. Startup teams tend to be more nimble, energetic and productive and many people assume that open offices contribute to those benefits. Moreover, for many companies, open offices offer an opportunity to reduce real estate footprint and costs – you can put more people into an open layout. In fact, as more companies embrace remote work, the need for dedicated private offices diminishes.

Despite this trend towards open offices, there’s a growing body of research casting doubt on the benefits of open offices. Researchers have found, for example, that the benefits of easy communication in an open office layout don’t outweigh the lack of privacy, and other disadvantages.

The chart below, from Harvard Business Review, summarizes the biggest complaints about different types of office layouts (based on a study of more than 42,000 U.S. office workers).

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As you can see, people complain the most about open offices and cubicles.

The researchers, Jungsoo Kim and Richard de Dear of the University of Sydney wrote:

Our results categorically contradict the industry-accepted wisdom that open-plan layout enhances communication between colleagues and improves occupants’ overall work environmental satisfaction. The open-plan proponents’ argument that open-plan improves morale and productivity appears to have no basis in the research literature.

Should you sound the alarm and build private offices for your teams?

No.

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True Leaders Focus On Leading, Not Job Titles

A leader’s job is to make it easy for everyone to excel at their jobs. When a team is working well, the leader is the least important team member.

If you micro-manage, give directions, create countless committees and meetings, or make busy work for your teams, you’re not leading.

Stop thinking about your job title and start thinking about leading. Titles do little more than give the impression of self-importance and achievement.

True leaders focus on leading, not job titles. A title doesn’t make someone a leader.

Book Review: Remote by Jason Fried and David Heinemeier Hansson

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I’ve long admired Jason Fried and David Heinemeier Hansson of 37signals. Among other accomplishments, Jason and David have created phenomenally useful software for better collaboration and project management (we’ve used Basecamp and Campfire at crowdSPRING for many years).

Jason and David have helped shaped my views on many topics, including remote work. If you haven’t read their blog, Signal v. Noise, I recommend that you do so.

Their prior book, Rework was a collection of short essays focusing on doing less and embracing constraints.

Their latest book, Remote, persuasively argues that companies should not restrict hiring to a small geographic region.

The book is a quick read. When working remotely, I  ride my exercise bike indoors for 75 minutes and use that time to read. I started and finished Remote during one ride last week.

Remote is directed mostly to companies that have rejected or that have only modestly experimented with remote work. Weaving through examples from their own experience with remote employees, and the experience of other big and small companies, Jason and David present  a compelling argument urging companies to ignore geographies and focus on skill and culture-fit instead.

You’ll recall the media storm when Marissa Mayer ended Yahoo’s work-from-home policy. To me and many others, Mayer’s decision seemed incredibly short-sighted. Among other things, Jason and David point out that:

  • work in an office is subject to constant interruptions.
  • commuting wastes a lot of time, energy and natural resources.
  • technology has made remote work functionally similar to being in the office.
  • people collaborate asynchronously and remote work is a perfect complement.
  • requiring office face time is often a red-herring masking deeper workplace problems.

I’m a fan of remote teams. Although we initially hired only in our Chicago office when we started in 2007, we quickly changed course and have, for the past five years, hired people from all over the world. Half of the crowdSPRING team is remote, and even those who work out of our Chicago office sometimes work remotely. By removing geographic constraints, we’ve hired the most qualified people and have made our team much stronger.

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Lead By Example, Not By Title

Leadership is not about titles, coercion, manipulation or force.

Good leaders inspire people to work hard. Great leaders inspire people to do their absolute best.

In a start-up with limited funds and small teams, it’s critical that people do their absolute best. Anything less is economic suicide.

As a leader, how can you inspire your team to do its best?

  • Lead by example at all times. You’re not a true leader merely because of your title.
  • Never stop learning – do whatever it takes to become a better leader.
  • Use the right words. What you say – and how you say it – as a leader always matters.
  • Appreciate differences. Use people’s differences as a source of strength for the team.
  • Motivate yourself. You cannot motivate others unless you motivate yourself.
  • Collaborate with your team to innovate instead of pushing ideas on them.
  • Empower people around you to succeed – give them responsibility and authority.
  • Treat others with compassion and respect. Don’t just tell them they are important. Show them.
  • Promote a collaborative culture where everyone is a leader.

Great leaders inspire everyone on their team, regardless of title, to follow these principles.

 

Failure Is Rarely Permanent

If you do something that carries more risk, you are more likely to fail. That’s one reason so many people fear failure. But if you risk nothing, you risk everything.

The question isn’t whether you will fail – everyone fails at something. The question is what you do after you fail.

Here’s a wonderful short video showing why failure is rarely permanent. Michal Marosi was racing in a mountain bike race. He was in the lead and made a risky move on an aerial descent that got him into trouble. He could have easily stopped racing. Instead, despite the big setback, Michal got back on his bike and executed an absolutely incredible passing move that was even more risky than the one that caused him to fall.

It’s a great reminder that failure is rarely permanent. Your attitude can turn even catastrophic failure into success.

How Empires Fall: The Publicis Omnicom Merger Underscores The Rapid Decay Of The Ad Industry

Publicis Group and Omnicom, two of the world’s biggest ad agencies, have announced a merger to create the world’s biggest advertising group. The companies’ public statements about the merger, and the market dynamics forcing this combination, underscore the rapid decay of the advertising industry. The ad industry is crumbling – the merger is creating little more than a house of cards.

Each company will own a 50 percent stake in the new business, to be known as the Publicis Omnicom Group. The combined entity will have revenues of $23 billion and a market capitalization in excess of $35 billion. According to AdAge, the combined U.S. revenues for the new entity, at $11.4 million, will be twice the nearest competitor, WPP (the current industry leader). Regulators in 46 countries will need to approve this merger.

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According to Publicis CEO Maurice Levy,

The communication and marketing landscape has undergone dramatic changes in recent years including the exponential development of new media giants, the explosion of big data, blurring the roles of all players … John and I have conceived this merger to benefit our clients by bringing together the most comprehensive offering of analogue and digital services.

Omnicom CEO John Wren identifies other benefits:

This combination will enable us to leverage the skill of our exceptionally talented people, our broad public offering, enhanced global footprint, and tremendous roster of global and local clients.

I smell something very foul here.

Rapidly shrinking budgets and more demanding clients are forcing agencies to be more entrepreneurial, more agile, and to offer their services for less money. Yet, at a time when the ad industry is crumbling and agencies are being forced to evolve or die, two of the top market leaders have decided to double-down on history.

What is pushing Publicis and Omnicom to merge?

At the press conference announcing the merger, Publicis CEO Levy said: “this is a new company for a new world.”

Levy’s statement is pure fiction.

The Publicis Omnicom merger creates a new company, but that new company is fundamentally unaware of the new world.

Remember the disastrous merger between AOL and Time Warner? That merger was also spun to the world as a merger of equals. That merger was also intended to benefit clients, to leverage talent, to create a bigger and more sophisticated global footprint, and to achieve cost-savings. It is widely considered to be the worst merger in history.

The Publicis Omnicom merger may be creating a new company, but the merger completely ignores the new world.

The notion that a merger of large organizations is driven by a desire to help clients is misguided. When two leading agencies merge, the list of actual and potential conflicts is enormous. In most professional service industries, such mergers fail. In fact, accoring to Clayton Christensen, et. al. writing in the Harvard Business Review, “study after study puts the failure rate of mergers and acquisitions somewhere between 70% and 90%”. Such high failure rates are not surprising. The combined entity will need to reconcile PepsiCo vs. Coca Cola, AT&T vs. Verizon, and many other large accounts. This merger is not about clients.

Nor is this merger about talent. Is it possible that the separately, the two entities were grossly lacking in talent but combined, they’ll suddenly have a group of “exceptionally talented people” helping to service global and local clients? Is it conceivable that two industry giants, without the merger, would be incapable of servicing the traditional and digital advertising needs of their clients? The claim that this merger is intended to help clients is pure rhetoric.

Nor is this merger about “big data.”According to Forbes, Levy said:

Changing consumer behavior, new talent to emerge, big data explosion, access to new tools – this leads to a powerful new solution for our clients … Our mission together is to create that new center.

The claim that this merger is about big data is a red herring, or even worse, a gross misunderstanding of how big data can be leveraged. Neither Publicis nor Omnicom are technology companies. Merging two holding companies doesn’t create a more sophisticated technology company. At best, the holding companies know how to spell “big data.” The merger will not create another Facebook or Google. Moreover, as Brian Morrissey correctly points out in his look at the winners and losers of Publicis Omnicom, the data belongs to the clients, not the holding companies.

Some have asserted that the merger will allow the combined entity to purchase advertising at cheaper rates. That is untrue. Most  media buys today are auction-based. The merger will do little to impact ad purchase prices (TV might be the sole exception).

The Publicis Omnicom merger isn’t about clients, talent, or “big data”. It’s about one thing: shareholders.

The two companies announced that they expect up to $500 million in cost-savings from the merger. That’s not surprising. We can expect to see layoffs, especially in middle management. With more 130,000 employees between them, there will be plenty of opportunities for cost-savings.

Holding companies are popular in the ad industry because size is believed to reduce cost and redundancy. Many believe that economies of scale increase as the size of the organization increases. But at some point, economies of scale run out.

In fact, I’ve long believed that the holding company structure is holding the entire ad industry back. A few years ago, I asked a question on Quora: “Is the holiding company structure detrimental to the evolution of agencies?”. Ben Kunz, VP of Strategic Planning at Mediaassociates offered his smart perspective:

Not detrimental, just a maturation that slows ideas, in my view.

Holding companies are a normal part of advertising service evolution. Any industry’s new services go through an evolution of innovation, consolidation, and monopolization — think railroads, phone networks, computer operating systems, and today’s social nets (rapidly consolidating into Facebook and Twitter). So agency maturation always ends up in the big players.

The trouble with holding companies that I see is they attract agencies at the mature end of the spectrum who may be furthest away from the innovation fueling new media results. They also have higher cost structures (in my view) since they must draw profits out of the organizations in their tanks. Energy comes from the fringe, and while it’s chaotic, the evolution of new ideas in my mind comes from the Barbarian Groups of the future who break out for a few years to build new techniques, which will later be adopted elsewhere.

(emphasis added).

The Publicis Omnicom merger reveals the short-term, industrial-world thinking of ad industry leaders. It is a fool’s bet.

Book Review: Ctrl Alt Delete, by Mitch Joel

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In the movie The Matrix, the protagonist Neo has a choice: he can swallow a blue pill and remain peacefully asleep and blissfully ignorant, or he can swallow the red pill and embrace the painful truth of reality.

Ctrl Alt Delete, a new book from Mitch Joel, a leading marketing expert who also authors the popular blog Six Pixels of Separation, offers readers a similar choice.

The world has changed in remarkable ways, yet some people have remained blissfully ignorant about those changes. Ctrl Alt Delete focuses on two main themes stemming from those changes: rebooting your business and rebooting your life.

In the first part of the book focusing on rebooting your business, Mitch Joel writes about five key movements that have transformed business, including the convergence of active and passive media and the need to build direct relationships with customers. Among other insights, Joel urges businesses to find ways to be useful. Many businesses, according to Joel, fail to understand that a brand’s utility to a customer is measured at the time the customer has a need.

True utility happens in the moment of need. Not the brand’s moment of need, but the consumer’s moment of need. If you can meet that need when the customer needs it met, you are on to something big.

Joel doesn’t give actionable step-by-step advice about what to do (there are some exceptions, such as a section offering twelve-step advice on starting a blog). Instead, he highlights the key changes that have transformed business and offers a perspective on how you can take advantage of those changes.

In the second part of the book, Joel focuses on rebooting your personal life. Joel talks about how people make career decisions and finds that the most successful people typically have careers that are “squiggly”, not linear. Successful careers are full of pivots, turns, and twists.

Joel urges people to embrace the “squiggle”, rather than avoid it. Joel reminds us that most people pick their career very early in their lives, and often don’t give themselves the opportunity to make a different choice later. Ultimately, poor choices leave many people working on things that they don’t care about.

There is a world of difference between stress that comes from the things you want to do and the stress that comes when you feel like you’re not working on the stuff that matters most to you.

Bottom Line: Ctrl Alt Delete is a good book for anyone struggling with or questioning their business or career. If you’re comfortable punching the clock every day, this book is not for you. If you want to understand the key transformations that make it necessary for most businesses to reboot how they do business, or the insights that can help you become more successful, I recommend you read Ctr Alt Delete.

Repeat Your Successes, Not Your Failures. Failure Is Overrated

Some people believe that you can learn more from failure than success. But not every failure is a learning experience.

I believe that you can learn a great deal more from success than from failure.

Here’s why: knowing what not to do helps you focus and avoid setbacks, but doesn’t help you adapt to changes. You know what didn’t work – does that help you next time when you need to figure out what will work?

If you ask successful entrepreneurs whether they would rather hire someone who has failed or someone who has succeeded, I suspect most would prefer to hire the person who has succeeded. This is not surprising – scientific research shows that we learn more from success than from failure.

I would go even further. Some people are successful because they can repeatedly perform a task well. Others are successful because they know how and why something works. Hire people who know how and why something works, not just those who know how to do something.

If you’re looking for a marketing person to focus on SEO, you may be looking for someone with prior SEO experience. You can talk to thousands of people with SEO experience, many of whom will know the basics of SEO because they’ve helped other companies with SEO strategies. But you’ll be hard-pressed to find many people who truly understand how and why SEO works.

We’ve made the mistake at crowdSPRIGN hiring people who knew how to do certain things well. Unfortunately, those people could not scale as our company scaled.

Knowing how to do something is important, but it is limiting.

When you know how to do something, you have a skill that you can replicate to do the same thing again and again. But when you understand how and why something works, you not only have a skill, but you also can adapt your skill to changing situations.

In our SEO example, the person who understands how and why SEO works will be able to help you when search engines start making regular major SEO-related algorithm changes. The person who merely knew how to implement SEO will hit a wall – they will have a tough time adapting to the changes.

Learn to repeat your successes, not your failures. Failure is overrated.

 

 

 

 

The Secret To Building Great Teams

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A great idea, without a great team, isn’t enough to build a successful company. The most successful entrepreneurs build a team of talented people and lead them in ways that allow the team to shine.

There are important things entrepreneurs should do to help a team to succeed: empower people to make decisions, encourage people to solve problems and not worry about revenue projections and profits, don’t micro-manage, celebrate success, remove bureaucracy.

But what makes a team great?

There’s a wonderful story about an anthropologist who proposed a game to children in an African tribe. He put sweet fruits in a basket near a tree and told the kids that whoever ran to the basket first would get all the fruit.

When the anthropologist yelled “Go!”, the children held each other’s hands and ran to the basket as a group. Then they shared the candy with each other.

The anthropologist was surprised. He asked the children why they ran together, when any one of them could have won and taken all the sweet fruits for themselves.

A young girl answered simply: “Ubuntu. How can one of us be happy if all the others are sad?”

UBUNTU in the Xhosa culture means “I am because we are”. Desmond Tutu explains:

Africans have a thing called ubuntu. It is about the essence of being human, it is part of the gift that Africa will give the world. It embraces hospitality, caring about others, being willing to go the extra mile for the sake of another. We believe that a person is a person through other persons, that my humanity is caught up, bound up, inextricably, with yours. When I dehumanize you, I inexorably dehumanize myself. The solitary human being is a contradiction in terms. Therefore you seek to work for the common good because your humanity comes into its own in community, in belonging.

Back to the question I posed above: what makes a team great?

The most important thing a leader can and should do is to encourage real teamwork. It’s impossible for people to come together as a team unless you clearly show them why it’s important to do so and set an expectation from the start. Successful teams don’t just happen by fiat – they’re nurtured. Encourage teamwork through feedback, recognition, conversation, you reward systems, and in any other way you can. Happiness is helping.

My team at crowdSPRING is much stronger – and can accomplish far more – when each person puts the success of the team ahead of their own personal gain.

Create a culture of ubuntu and you’ll empower your teams to succeed beyond your wildest dreams. When people put the good of the team ahead of their own personal gain, great things can happen.

 

Collaboration and Security

A few days ago, I hosted a Google+ Hangout. Dell paid me to host the Hangout, but the opinions in this post and in the Hangout are entirely my own.

I’ve previously talked about ways that companies can promote better collaboration among their employees. Collaborative teams are typically more successful, more agile, more innovative, and happier than teams that silo people.

But collaboration isn’t without risk. Smart companies encourage collaboration and also look for ways to ensure that collaboration doesn’t compromise the security of the company’s systems, devices and data.

Ultimately, IT security is a balancing act. Too much security can hinder innovation and collaboration. Too little security can create unacceptable risks that important information can be easily stolen or lost.

Which collaboration tools can be trusted with your company’s data? How can you secure client systems and devices while providing flexibility for collaboration and innovation? How can you ensure that you don’t lose important data?

A few days ago, I hosted an informative Google+ Hangout with experts from Dell and McAfee focusing on collaboration and security. You’ll find lots of good insight in their conversation. Here’s the full video: