Dear Mr. President:
I write to you today regarding your comments on the Jay Leno Show aired on March 19th, 2008. In particular, I reference the comparison of your less-than-quality bowling game to that of a Special Olympian. I am not writing to point out your error – you no doubt understand that – rather, I am writing you to ensure that you understand the broader implications of your words and the opportunity in front of you.
What is done is done, and what matters is what gets done in the future. You have the opportunity to use your misstep to shed light on the billions of people tied to disability around the world with a fire in their belly to work, pay taxes and bring their brand of innovation to society.
A private phone call to Tim Shriver and hiring an intern who happens to be a ‘Special Olympian’ - while a good start - is not enough. This reaches far beyond the Special Olympics, as your words hit home for hundreds of millions of people who do not identify with Special Olympics, and who in fact spend their lives combating the stereotype. I suggest three specific remedies:
1. Make an equally public apology to the Leno media reach;
2. Develop a demonstrated understanding of the issues surrounding people with disabilities, paying particular attention to economic empowerment; and
3. As CEO of the United States Government, drive a benchmarked mandate to hire qualified people with disabilities (double the current number, by 2012). Hold accountable those cabinet members who fail to attain benchmarks. Follow this up with a public challenge to CEOs of the world’s largest corporations to do the same.
The new frontier of disability is in the workplace and consumerism. Over the next five to ten years, people with disabilities will enter the workforce and become a powerful influence in the marketplace. The landscape of products and service offerings will change to include the 1.2 billion people globally who have a disability, and the 2.0 billion people globally who are friends and family of people with disabilities. Corporations and governments, whether they realize it or not, will need to adapt to these market forces; as these two groups combined represent 53% of the population.
As a successful business owner with an Ivy League education who happens to have a disability, I can’t tell you how frustrating it is to have to prove my intellect every day of my life because my speech is slurred. There are hundreds of millions of people around the world with disabilities just like me who battle perception to stand on their talents. The perception we fight is the same one perpetuated by a joke that you told to a national audience this week. As an African American who has dealt with stereotypes, I am certain you understand this frustration.
The biggest barrier to the goal of inclusion in the workforce is getting leaders and managers to take these efforts seriously. Historically, disability has been the realm of the ‘do-gooder’, without much heed to results. When a manager considers hiring a person with a disability, thought goes to a perceived burden rather than actual benefit. This is due to the fact that there is a perception that people with disabilities cannot deliver quality. Needless to say, your comments do not help.
If you, or your staff, need help to do this, please give me a call. I would be happy to lend a hand.
Mr. President, people with disabilities are well acquainted with turning perceived adversity into quality results. I urge you to do the same.
Sincerely,
Rich Donovan
Managing Partner, IPS
Dustin Longstreth
Managing Partner, IPS
Duncan Wyeth
Trustee-United Cerebral Palsy
Tuesday, March 24, 2009
Monday, October 6, 2008
Disability as a Defensive Asset Class
In today’s turbulent financial environment the next horizon could bring gain or ruin. The concept of portfolio risk management means something very different today than it did six months ago. While the mind goes to stocks, one can look at a company as a whole as a portfolio of businesses, or assets, that generate returns for its owners. These assets generate a risk profile for the entity, with a diversified defense contractor carrying less risk than a focused tech firm. Let’s not even discuss financial firms.
As firms evaluate their asset mix in times of crisis, like today, they quickly realize that decisions made in good times either secure their future with lower risk, or jeopardize future viability by putting ‘too many eggs in one basket’. Usually it is too late to change the asset mix when the ‘stuff hits the fan’, and Monday morning quarterbacking becomes a gut-wrenching exercise that keeps senior leaders awake in the wee hours of the morning.
Defensive assets are traditionally defined as income bearing assets like bonds. They serve the purpose of reducing risk in a portfolio. When we look at the balance sheet of a company, essentially a firm’s portfolio, defensive assets are those that are not correlated to the other assets through which the company makes money. A good example of a defensive asset would be a sports car company that also manufactures military vehicles. In tough economic times, folks buy fewer sports cars, but the government always needs tanks. The military contractor represents a defensive asset as its sales are largely unrelated to sales of sports cars.
Disability can be seen as a defensive asset class. The most obvious defensive piece of this asset class is the $480B annually that pours into this space through government transfers in the US alone. For contextual purposes, this equals 87% of the defense budget. These dollars represent a stable revenue source to fulfill customer desires. A large proportion of these dollars are in areas such as health care, transportation and housing. Much of these dollars are heavy with bureaucratic fat, ripe for an innovator to competitively spin a better product with more efficiency. Great upside with a stable revenue source, the epitome of a defensive asset.
In a broader context, disability as a marketplace is untapped. As an untapped marketplace, the annual volatility tends to be lower than the market as a whole simply because initial contribution growth is higher and more stable. In layman’s terms, first movers are like the only gas station in town, business flows because it’s the only game to be played. This has the effect of lowering correlation to areas of the firm that are more mature, which tend to be more impacted by moves in the overall economy.
For most firms riding out this downturn, it’s too late to have any meaningful impact on their balance sheets . Good managers are now looking ahead to the next downturn to immunize their revenue sources. One way to do this is to find new sources of revenue that are material to top line growth. The true beauty of disability is that it represents a new segment that is embedded inside geographic/political markets that companies already serve. It does not require a massive re-tool or capital outlay, simply a shift in message and vision to get started. . A firm does not need to build new infrastructure as they would, say, to enter into an unknown environment like China or Africa. In fact, it should take less time than an economic cycle to have a material impact on a firm’s revenue profile.
When the economy gets ugly, firms take hard looks at their asset mixes. Those firms that fail look from a forensic lens, those that survive to thrive assess from a position of lessons learned. Warren Buffett, the world’s best-known value investor has proven that times of crisis are times to step into the breach and buy quality assets. Disability represents one of the best opportunities in today’s marketplace for material growth at a reasonable price that also works to reduce the volatility of revenue streams. Whether the firm is a retailer, an airline, a tech firm and, yes, even a bank, the opportunity in disability to diversify assets cannot be ignored.
As money managers seek to diversify their allocations, disability represents an asset class in-line with consumer staples, health care and defense contractors. It also represents an asset base whose upside is aligned with value investing, deep discounts that will tend to fair value over time. The major difference with disability as compared to other emerging asset classes(alternative energy, aerospace, high technology) is that the revenue models are robust and easily understood, while the cost side is fat and padded. Capital will flood this space soon.
Risk is always ignored as an issue in the media until something goes wrong. Upside does not sell newspapers(or attract web hits). In the real world, senior managers of revenue producing firms must be exceedingly good risk managers. We’ve seen the results when they are not. Shareholders are demanding that managers find the magic bullet; increased growth with lower risk. Disability represents exactly that.
As firms evaluate their asset mix in times of crisis, like today, they quickly realize that decisions made in good times either secure their future with lower risk, or jeopardize future viability by putting ‘too many eggs in one basket’. Usually it is too late to change the asset mix when the ‘stuff hits the fan’, and Monday morning quarterbacking becomes a gut-wrenching exercise that keeps senior leaders awake in the wee hours of the morning.
Defensive assets are traditionally defined as income bearing assets like bonds. They serve the purpose of reducing risk in a portfolio. When we look at the balance sheet of a company, essentially a firm’s portfolio, defensive assets are those that are not correlated to the other assets through which the company makes money. A good example of a defensive asset would be a sports car company that also manufactures military vehicles. In tough economic times, folks buy fewer sports cars, but the government always needs tanks. The military contractor represents a defensive asset as its sales are largely unrelated to sales of sports cars.
Disability can be seen as a defensive asset class. The most obvious defensive piece of this asset class is the $480B annually that pours into this space through government transfers in the US alone. For contextual purposes, this equals 87% of the defense budget. These dollars represent a stable revenue source to fulfill customer desires. A large proportion of these dollars are in areas such as health care, transportation and housing. Much of these dollars are heavy with bureaucratic fat, ripe for an innovator to competitively spin a better product with more efficiency. Great upside with a stable revenue source, the epitome of a defensive asset.
In a broader context, disability as a marketplace is untapped. As an untapped marketplace, the annual volatility tends to be lower than the market as a whole simply because initial contribution growth is higher and more stable. In layman’s terms, first movers are like the only gas station in town, business flows because it’s the only game to be played. This has the effect of lowering correlation to areas of the firm that are more mature, which tend to be more impacted by moves in the overall economy.
For most firms riding out this downturn, it’s too late to have any meaningful impact on their balance sheets . Good managers are now looking ahead to the next downturn to immunize their revenue sources. One way to do this is to find new sources of revenue that are material to top line growth. The true beauty of disability is that it represents a new segment that is embedded inside geographic/political markets that companies already serve. It does not require a massive re-tool or capital outlay, simply a shift in message and vision to get started. . A firm does not need to build new infrastructure as they would, say, to enter into an unknown environment like China or Africa. In fact, it should take less time than an economic cycle to have a material impact on a firm’s revenue profile.
When the economy gets ugly, firms take hard looks at their asset mixes. Those firms that fail look from a forensic lens, those that survive to thrive assess from a position of lessons learned. Warren Buffett, the world’s best-known value investor has proven that times of crisis are times to step into the breach and buy quality assets. Disability represents one of the best opportunities in today’s marketplace for material growth at a reasonable price that also works to reduce the volatility of revenue streams. Whether the firm is a retailer, an airline, a tech firm and, yes, even a bank, the opportunity in disability to diversify assets cannot be ignored.
As money managers seek to diversify their allocations, disability represents an asset class in-line with consumer staples, health care and defense contractors. It also represents an asset base whose upside is aligned with value investing, deep discounts that will tend to fair value over time. The major difference with disability as compared to other emerging asset classes(alternative energy, aerospace, high technology) is that the revenue models are robust and easily understood, while the cost side is fat and padded. Capital will flood this space soon.
Risk is always ignored as an issue in the media until something goes wrong. Upside does not sell newspapers(or attract web hits). In the real world, senior managers of revenue producing firms must be exceedingly good risk managers. We’ve seen the results when they are not. Shareholders are demanding that managers find the magic bullet; increased growth with lower risk. Disability represents exactly that.
Monday, September 8, 2008
Discussing Disclosure – A Two Way Mirror
Imagine having a secret. A secret that you carry with you every day, wondering how folks would react if they knew. While the reality is that this secret is relatively immaterial in terms of impact on outcomes, perception of this secret brings unknowns and questions in the eyes of others. In the mind of the secret-holder, there is the need to not only manage for outcomes, there is also the need to manage perception. These dual mandates can be incredibly complex to deal with.
This is essentially the situation when carrying an undisclosed disability in the workplace. 74% of disabilities are invisible, meaning that one would not know that someone had a disability by interacting with that individual. Many times, those invisible disabilities can have an impact on productivity. When this disability is kept hidden, the employee takes it upon him/herself to work the extra hours to maintain the expected output. For most, this is simply standard operating procedure; they have been quietly compensating for their entire lives to attain the standards of performance that they find acceptable. Usually those standards are higher than most.
For an employer, having employees with undisclosed disabilities presents two concerns that can have positive spin-offs when solved. First is a morale issue. Numbers say that approximately 14% of your workforce has an undisclosed disability that either impacts productivity or causes employees to spend mind-share outside of the firm’s realm. The brand of disability is so negative, and so many poor perceptions come with disability, employees may be out-and-out terrified of the backlash that comes from disclosure. Well-run companies must address the fact that 14% of their workforce may be terrified of the firm’s reaction to who they are as people. This situation makes Hertzberg’s experiment with light levels in the workplace look somewhat trite.
The second concern for employers is an issue of productivity of great employees. These employees represent a large chuck of the earnings engine in the firm. To have them working at sub-optimal levels is simply unacceptable. It is impossible to provide assistance to these folks if they remain anonymous. Somehow the firm needs to turn around the ‘stigma’ that comes along with disability and coax these valuable assets to assist them in providing productivity enhancements. Easier said than done.
One hurdle firm’s face is liability and the legality of openness surrounding disability in the workplace. Advocates have historically used the courts to coerce firms via civil rights legislation to hire and accommodate. Not only has this approach failed statistically, it has poisoned the environment, scaring most firms into making legal defense the front line of disability. This is exactly backwards. Firms need the freedom to have honest conversations with their employees and Customers without the specter of lawyers entering the fray. Problem solving is at best sub-optimal when a gun is held to one’s head.
Once the lawyers are safely locked away in their closets, a firm must do three things to tackle disclosure. First, it must engage in an honest conversation with its employees. Find out why they choose not to disclose, and what the firm can do to entice them to a comfort zone surrounding their disability. This can happen through focus groups, anonymous surveys and one-off structured conversations with employees. Best practice can also be learned from other firms that do this well, but frankly not many of those exist. Knowledge is a key prior condition to action.
The second step is to become a visible player in disability. The rationale here is to signal to your entire workforce and Customer base that disability is important to the firm. Let’s be clear, do not go out and throw money at a charity. Find a high-profile vehicle that is aligned with your business goals. If you can’t find one that suits, create one. This will help change the brand of disability at your firm, showing those who are skeptical that they fit the mold and are main stream. The other way to align the firm with disability is to integrate it into your recruiting systems. By having butts in seats performing at the highest levels, the firm raises more awareness than the best conventional ‘teach-in’ could dream of. The only way to change brands is through results, rather than awareness programs that have proven pointless over the years.
The third and most crucial step is to provide a menu of solutions for employees to call upon. There are proven strategies that allow those with both visible and hidden disabilities to manage their issues. By providing a menu, in conjunction with steps one and two above, you provide a roadmap for someone struggling to be productive to take the steps to make their lives easier. Often the solution precedes the disclosure.
Disclosure is a tough issue to deal with. It runs to the core of how people define themselves and how they are perceived. This situation directly impacts 14% of a firm’s workforce, and as such any well-managed firm must be proactive in addressing it. The firm that does this right has happier employees who are more productive than their competition. No better reason exists to act.
This is essentially the situation when carrying an undisclosed disability in the workplace. 74% of disabilities are invisible, meaning that one would not know that someone had a disability by interacting with that individual. Many times, those invisible disabilities can have an impact on productivity. When this disability is kept hidden, the employee takes it upon him/herself to work the extra hours to maintain the expected output. For most, this is simply standard operating procedure; they have been quietly compensating for their entire lives to attain the standards of performance that they find acceptable. Usually those standards are higher than most.
For an employer, having employees with undisclosed disabilities presents two concerns that can have positive spin-offs when solved. First is a morale issue. Numbers say that approximately 14% of your workforce has an undisclosed disability that either impacts productivity or causes employees to spend mind-share outside of the firm’s realm. The brand of disability is so negative, and so many poor perceptions come with disability, employees may be out-and-out terrified of the backlash that comes from disclosure. Well-run companies must address the fact that 14% of their workforce may be terrified of the firm’s reaction to who they are as people. This situation makes Hertzberg’s experiment with light levels in the workplace look somewhat trite.
The second concern for employers is an issue of productivity of great employees. These employees represent a large chuck of the earnings engine in the firm. To have them working at sub-optimal levels is simply unacceptable. It is impossible to provide assistance to these folks if they remain anonymous. Somehow the firm needs to turn around the ‘stigma’ that comes along with disability and coax these valuable assets to assist them in providing productivity enhancements. Easier said than done.
One hurdle firm’s face is liability and the legality of openness surrounding disability in the workplace. Advocates have historically used the courts to coerce firms via civil rights legislation to hire and accommodate. Not only has this approach failed statistically, it has poisoned the environment, scaring most firms into making legal defense the front line of disability. This is exactly backwards. Firms need the freedom to have honest conversations with their employees and Customers without the specter of lawyers entering the fray. Problem solving is at best sub-optimal when a gun is held to one’s head.
Once the lawyers are safely locked away in their closets, a firm must do three things to tackle disclosure. First, it must engage in an honest conversation with its employees. Find out why they choose not to disclose, and what the firm can do to entice them to a comfort zone surrounding their disability. This can happen through focus groups, anonymous surveys and one-off structured conversations with employees. Best practice can also be learned from other firms that do this well, but frankly not many of those exist. Knowledge is a key prior condition to action.
The second step is to become a visible player in disability. The rationale here is to signal to your entire workforce and Customer base that disability is important to the firm. Let’s be clear, do not go out and throw money at a charity. Find a high-profile vehicle that is aligned with your business goals. If you can’t find one that suits, create one. This will help change the brand of disability at your firm, showing those who are skeptical that they fit the mold and are main stream. The other way to align the firm with disability is to integrate it into your recruiting systems. By having butts in seats performing at the highest levels, the firm raises more awareness than the best conventional ‘teach-in’ could dream of. The only way to change brands is through results, rather than awareness programs that have proven pointless over the years.
The third and most crucial step is to provide a menu of solutions for employees to call upon. There are proven strategies that allow those with both visible and hidden disabilities to manage their issues. By providing a menu, in conjunction with steps one and two above, you provide a roadmap for someone struggling to be productive to take the steps to make their lives easier. Often the solution precedes the disclosure.
Disclosure is a tough issue to deal with. It runs to the core of how people define themselves and how they are perceived. This situation directly impacts 14% of a firm’s workforce, and as such any well-managed firm must be proactive in addressing it. The firm that does this right has happier employees who are more productive than their competition. No better reason exists to act.
Monday, August 25, 2008
Corporate Fuel for Ideas – Budgets
Ideas come, and ideas go. Within corporate entities, divisions and groups drive their ideas through levels of management and filter the good ones (hopefully) through stated goals relative to the potential returns they create. Innovation is directly tied to current plans, and often viability is looked at through the lens of those plans. Plans are represented financially by budgets, and these budgets ‘roadmap’ how dollars get allocated. A key question to ask oneself is how to get innovation that does not fit an existing budget funded?
Disability does not have budget allocations in most firms today. Even in the firms that do have allocations, these budgets do not come anywhere near representing the potential revenue opportunity that exists in business/disability. Logic says that a market with disposable income north of $220B in the US would have at least an 8-figure budget associated with outreach, but firms have yet to get there. While this does represent tangible opportunity, how does one ‘grow’ a budget from a seed?
Well, first step is…you need the seed. Prove potential by looking at the objectives of the group/firm and putting a framework around the idea targeting those objectives. For most companies in relation to disability, this means translating the mammoth demographic into increased revenue. This happens in two distinct ways, as employees and as Customers. One may see employees as solely a cost center, but when it comes to diversity, reflecting your Customer internally attracts them to you and adds to the organizational knowledge in better serving them. At the end of the day, it’s very difficult to pay shareholders without happy paying customers.
Secondly, one must find a ‘budget beachhead’ from which to project forward. This ‘beachhead’ is an umbrella from which to convene meetings, pay for travel/development and generally pull the levers within your organization. These umbrellas are typically Diversity, HR and/or Legal when it comes to getting a foothold for disability. Diversity is the best beachhead as disability has many parallels with traditional Diversity stomping grounds like women and racial markets. Much of their infrastructure can be grafted to fit and give a presence for disability sanctioned and minimally funded by the firm. Often, disability unofficially ‘lives’ in HR and/or Legal because it has historically been handled as a compliance issue. It is in a firm’s best interest to move disability out of the compliance mode into a Customer/Talent Acquisition mindset.
Living under the Diversity umbrella won’t drive this to its end goal, which is the full realization of the revenue potential in this market. In order to do this, disability must be included in main brand/business lines as part of standard operating procedure through talent acquisition/retention, marketing, product development, customer interaction and new revenue streams.
There are two parallel tracks to follow to do this, talent acquisition and market inclusion. The easier of the two is talent acquisition. With firms like Lime Connect working with large brands bringing talented people with disabilities to the workforce, the model is proven and repeatable. The budget tapped here is often a combination of Recruiting, Diversity and HR. This way, the risk is shared and the impact on one budget of an incremental expenditure is minimized. It is highly advisable not to seek budgets from Philanthropy or the internal foundation to fund outside relationships. This sends a message to all parties that there are no consequences to failure, and a message to PWDs that the firm does not take the efforts seriously. That said, if that is the only route available early on, pursue it with a plan to get away from it later.
The best way to get budget for a market inclusion initiative is to convince a senior business-line leader that the effort is key to the future of the firm. Disability lends itself nicely to this model, as the demographic is so large that it has a material impact on the future. Often these leaders have access to ‘innovation budgets’ that can bridge the effort from proof of value to the point where line budgets can integrate disability into their annual plans. For most consumer product firms, integration may have an initial ‘retrofit’ cost to alter messaging and product design, but once accomplished, the continuing marginal variable costs are de minimus.
One option to get away from the ‘switching cost’ effect, that can work against short-term financial goals, is to set up a corporate level fund to charge back outlays during the one-time retrofit. The message sent is that our firm sees disability as an imperative, and senior management does not want short-term budget choices to hinder forward motion in disability. Budgeting can be a political exercise, and providing a budget buffer can actually incent managers to ignite innovation in the disability space.
Budgets are nuts and bolts in corporate life. They define what exists, and what doesn’t. Disability does not yet reflect its potential in those budgets. In order best achieve the long-term goal of realizing return on disability, these budgets must be created as close to customer contact as possible. That process is a long one, which must prove returns to shareholders at every step. The only way that the idea of disability takes root in a corporate organization is through established budgets and the infrastructure that comes with them. Without that, this idea walks out the door…usually to your competition.
Disability does not have budget allocations in most firms today. Even in the firms that do have allocations, these budgets do not come anywhere near representing the potential revenue opportunity that exists in business/disability. Logic says that a market with disposable income north of $220B in the US would have at least an 8-figure budget associated with outreach, but firms have yet to get there. While this does represent tangible opportunity, how does one ‘grow’ a budget from a seed?
Well, first step is…you need the seed. Prove potential by looking at the objectives of the group/firm and putting a framework around the idea targeting those objectives. For most companies in relation to disability, this means translating the mammoth demographic into increased revenue. This happens in two distinct ways, as employees and as Customers. One may see employees as solely a cost center, but when it comes to diversity, reflecting your Customer internally attracts them to you and adds to the organizational knowledge in better serving them. At the end of the day, it’s very difficult to pay shareholders without happy paying customers.
Secondly, one must find a ‘budget beachhead’ from which to project forward. This ‘beachhead’ is an umbrella from which to convene meetings, pay for travel/development and generally pull the levers within your organization. These umbrellas are typically Diversity, HR and/or Legal when it comes to getting a foothold for disability. Diversity is the best beachhead as disability has many parallels with traditional Diversity stomping grounds like women and racial markets. Much of their infrastructure can be grafted to fit and give a presence for disability sanctioned and minimally funded by the firm. Often, disability unofficially ‘lives’ in HR and/or Legal because it has historically been handled as a compliance issue. It is in a firm’s best interest to move disability out of the compliance mode into a Customer/Talent Acquisition mindset.
Living under the Diversity umbrella won’t drive this to its end goal, which is the full realization of the revenue potential in this market. In order to do this, disability must be included in main brand/business lines as part of standard operating procedure through talent acquisition/retention, marketing, product development, customer interaction and new revenue streams.
There are two parallel tracks to follow to do this, talent acquisition and market inclusion. The easier of the two is talent acquisition. With firms like Lime Connect working with large brands bringing talented people with disabilities to the workforce, the model is proven and repeatable. The budget tapped here is often a combination of Recruiting, Diversity and HR. This way, the risk is shared and the impact on one budget of an incremental expenditure is minimized. It is highly advisable not to seek budgets from Philanthropy or the internal foundation to fund outside relationships. This sends a message to all parties that there are no consequences to failure, and a message to PWDs that the firm does not take the efforts seriously. That said, if that is the only route available early on, pursue it with a plan to get away from it later.
The best way to get budget for a market inclusion initiative is to convince a senior business-line leader that the effort is key to the future of the firm. Disability lends itself nicely to this model, as the demographic is so large that it has a material impact on the future. Often these leaders have access to ‘innovation budgets’ that can bridge the effort from proof of value to the point where line budgets can integrate disability into their annual plans. For most consumer product firms, integration may have an initial ‘retrofit’ cost to alter messaging and product design, but once accomplished, the continuing marginal variable costs are de minimus.
One option to get away from the ‘switching cost’ effect, that can work against short-term financial goals, is to set up a corporate level fund to charge back outlays during the one-time retrofit. The message sent is that our firm sees disability as an imperative, and senior management does not want short-term budget choices to hinder forward motion in disability. Budgeting can be a political exercise, and providing a budget buffer can actually incent managers to ignite innovation in the disability space.
Budgets are nuts and bolts in corporate life. They define what exists, and what doesn’t. Disability does not yet reflect its potential in those budgets. In order best achieve the long-term goal of realizing return on disability, these budgets must be created as close to customer contact as possible. That process is a long one, which must prove returns to shareholders at every step. The only way that the idea of disability takes root in a corporate organization is through established budgets and the infrastructure that comes with them. Without that, this idea walks out the door…usually to your competition.
Monday, August 18, 2008
The Olympic Games – An Example of a Failed Parallel
As China enters the final week of its ‘coming-out party’, it prepares for another few weeks of competition in the Paralympic Games. This event is meant to be a celebration and competition of the best sporting talent amongst those who have disabilities. These athletes are the best in their sport, incredibly talented and every bit as inspiring as Mikey Phelps or Eddie ‘the Eagle’ Edwards. So why, prey-tell, aren’t these sports combined into the Olympic Games?
Statements and messages aren’t always overt. In fact, most of the time they are spoken without saying a word. Men and women rarely compete together in sport, because they are physically different. Sport and bathrooms have a lot in common here, same function yet different paths. As our nation’s men and women compete on the track, in the pool, and on board vessels why do our athletes with disabilities have to wait until the closing ceremonies are done to begin? It makes no sense to this author, but then again, few international bodies do when disability is involved.
This year’s Olympics in Beijing are bringing 60 million sets of eyeballs to NBC and its website per day. Gross that up globally, and we’re looking at more than 500 million daily viewers of the Olympic Games. NBC paid $894mm for the US rights to broadcast the Games. It speaks volumes about the perceived value of the parallel and segregated system that is the Paralympics that this author could not find a US TV schedule for this event. It is safe to say that the public is not captured by the Paralympic story.
Looking at this parallel system in the ‘Paralympics’ is important for the global corporate community. Often in corporations, disability is funneled through a parallel system. Employees with some sort of strong attachment to disability (typically family members), carve out a niche for a handful of candidates who are brought into an environment that has different standards than the rest of the firm. These employees do not have the same unofficial supports as their ‘regular’ peers do, and are seen by the firm as charity cases. It is not surprising that these programs have an abysmal record on retention, as most employees with disabilities feel that they are not part of the team. These employees, their assessments correct, either leave or are terminated because they cannot compete (through no fault of their own).
In order to be taken seriously, one must compete on the same stage as one’s peers, whether one is a world-class athlete or a world-class employee. Parallel systems don’t work simply because those in the mainstream system question why the parallel is needed and quickly deduce that a lower bar is required, thus that system is shunned. The curious aspect of this is that often the lower bar is not needed. It is truly amazing what happens when talented people are left to compete.
There are 20 sport competitions in the Paralympic Games. Of these 20, 11 sports can be merged as an ‘adapted’ class into sports already in the Olympics. These 11 sports would have Men’s, Woman’s, Men’s adapted, and Woman’s adapted. Sound familiar, it’s called accommodations. The remaining 9 are added to the competition and must be opened to all. Can Kobe make a 3-point shot from a wheelchair? Let’s find out. There are more important things than ensuring an athlete with a disability gets to participate. This is not Little League, it is the Olympics.
The same must occur in global corporate entities in order to get a meaningful number of employees with disabilities into their workforces. Talent acquisition must be aligned with the ‘regular’ effort to bring new blood on board. Competition must be judged on the same scorecard, both to entice those with disabilities to come forward, and perhaps more importantly, to ensure their success and retention. When the organization sees all employees on an equal footing, the perceived value of those employees is also equal. Organizations are human organisms, and humans take signals as policy. If your organization signals that some individuals need a different set of rules, your employees simply won’t take those individuals seriously.
Integrating disability into all systems is the way to go. Your firm already does a good job reaching women and other minorities, expand that to disability. The first step is to take an inventory of where you are, what works and what does not. The next step builds on that, and involves research. Your firm needs to understand this market and actually needs to have a conversation with your Customer, a novel concept indeed. By following proven practice, and building an arsenal of knowledge, all you then need to do is deliver on those Customer desires.
This is where most Western firms fail. They assume that they understand their Customer, lock themselves in a room, and come up with a strategy that reflects executive knowledge. Western automotive firms and their share prices show how well this works. When developing a strategy, Customer is King, Queen, Jack and Ace. If someone argues against that, find them a different job. A strategy in disability that is based on the Customer is the difference between success and failure. By integrating disability into talent acquisition/retention, marketing, product development, R&D and IT your firm is unlocking the world’s largest market.
Parallel systems do one thing well, they highlight opportunity. They allow the masses to see the potential in something that might be a little bit different. If these systems continue for too long without integration into the whole, their legitimacy is questioned and they risk irrelevance. This is true of the Paralympics. The masses see talented athletes competing outside the norm and the results as shown in TV ratings speak for themselves. The Paralympics must be integrated into the Olympics, just as disability must be integrated into the mainstream of our global corporate entities. Anything less not only sends a questionable inclusion message, but leaves material opportunity on the table.
Statements and messages aren’t always overt. In fact, most of the time they are spoken without saying a word. Men and women rarely compete together in sport, because they are physically different. Sport and bathrooms have a lot in common here, same function yet different paths. As our nation’s men and women compete on the track, in the pool, and on board vessels why do our athletes with disabilities have to wait until the closing ceremonies are done to begin? It makes no sense to this author, but then again, few international bodies do when disability is involved.
This year’s Olympics in Beijing are bringing 60 million sets of eyeballs to NBC and its website per day. Gross that up globally, and we’re looking at more than 500 million daily viewers of the Olympic Games. NBC paid $894mm for the US rights to broadcast the Games. It speaks volumes about the perceived value of the parallel and segregated system that is the Paralympics that this author could not find a US TV schedule for this event. It is safe to say that the public is not captured by the Paralympic story.
Looking at this parallel system in the ‘Paralympics’ is important for the global corporate community. Often in corporations, disability is funneled through a parallel system. Employees with some sort of strong attachment to disability (typically family members), carve out a niche for a handful of candidates who are brought into an environment that has different standards than the rest of the firm. These employees do not have the same unofficial supports as their ‘regular’ peers do, and are seen by the firm as charity cases. It is not surprising that these programs have an abysmal record on retention, as most employees with disabilities feel that they are not part of the team. These employees, their assessments correct, either leave or are terminated because they cannot compete (through no fault of their own).
In order to be taken seriously, one must compete on the same stage as one’s peers, whether one is a world-class athlete or a world-class employee. Parallel systems don’t work simply because those in the mainstream system question why the parallel is needed and quickly deduce that a lower bar is required, thus that system is shunned. The curious aspect of this is that often the lower bar is not needed. It is truly amazing what happens when talented people are left to compete.
There are 20 sport competitions in the Paralympic Games. Of these 20, 11 sports can be merged as an ‘adapted’ class into sports already in the Olympics. These 11 sports would have Men’s, Woman’s, Men’s adapted, and Woman’s adapted. Sound familiar, it’s called accommodations. The remaining 9 are added to the competition and must be opened to all. Can Kobe make a 3-point shot from a wheelchair? Let’s find out. There are more important things than ensuring an athlete with a disability gets to participate. This is not Little League, it is the Olympics.
The same must occur in global corporate entities in order to get a meaningful number of employees with disabilities into their workforces. Talent acquisition must be aligned with the ‘regular’ effort to bring new blood on board. Competition must be judged on the same scorecard, both to entice those with disabilities to come forward, and perhaps more importantly, to ensure their success and retention. When the organization sees all employees on an equal footing, the perceived value of those employees is also equal. Organizations are human organisms, and humans take signals as policy. If your organization signals that some individuals need a different set of rules, your employees simply won’t take those individuals seriously.
Integrating disability into all systems is the way to go. Your firm already does a good job reaching women and other minorities, expand that to disability. The first step is to take an inventory of where you are, what works and what does not. The next step builds on that, and involves research. Your firm needs to understand this market and actually needs to have a conversation with your Customer, a novel concept indeed. By following proven practice, and building an arsenal of knowledge, all you then need to do is deliver on those Customer desires.
This is where most Western firms fail. They assume that they understand their Customer, lock themselves in a room, and come up with a strategy that reflects executive knowledge. Western automotive firms and their share prices show how well this works. When developing a strategy, Customer is King, Queen, Jack and Ace. If someone argues against that, find them a different job. A strategy in disability that is based on the Customer is the difference between success and failure. By integrating disability into talent acquisition/retention, marketing, product development, R&D and IT your firm is unlocking the world’s largest market.
Parallel systems do one thing well, they highlight opportunity. They allow the masses to see the potential in something that might be a little bit different. If these systems continue for too long without integration into the whole, their legitimacy is questioned and they risk irrelevance. This is true of the Paralympics. The masses see talented athletes competing outside the norm and the results as shown in TV ratings speak for themselves. The Paralympics must be integrated into the Olympics, just as disability must be integrated into the mainstream of our global corporate entities. Anything less not only sends a questionable inclusion message, but leaves material opportunity on the table.
Monday, August 11, 2008
Pushing the Edge – Not Falling Off
There is risk in entering new markets. Part of that risk lies in not understanding the ins-and-outs of that market, simply because it is new to you. Whether dealing with new technology or a new population, a learning curve exists and one must plan to adjust for it. Missteps happen, the key is to minimize those missteps while reacting in an honest manner to fix errors.
DreamWorks has learned this the hard way. http://www.washingtonpost.com/wp-dyn/content/article/2008/08/10/AR2008081001869.html Their new comedy, ‘Tropical Thunder’, opens this week. Part of the movie is dedicated to making fun of ethnic minorities and people with disabilities. On its own, this is not exactly high art, but hardly unheard of in today’s entertainment industry. The film overtly makes fun of people with disabilities as ‘retards’, going farther than any mainstream movie has in recent memory. Let’s be clear folks, ‘retard’ equals ‘nigger’ for people with disabilities in terms of the hate and discrimination that comes with the word. It causes a real passion in the 53% of the population who are touched by disability and emotional pain in those who struggle with discrimination on a daily basis.
Funny is good, and some may find this stuff funny, but for DreamWorks, it’s just bad business. It is just a bad business strategy that pushes a negative emotion button in half your customers. While ‘Tropical Thunder’ would never be a blockbuster, why would they risk audiences for properties like Shrek, Gladiator, Madagascar and any future blockbusters? It makes the Mouse House look even better.
There are learnings here. As one reaches out to a new market, one must understand where limits are. Communication with new markets is hard, because one simply does not know which messaging works and which messages fuel a mob mentality. General Motors has a classic story of a misstep in a new market. In the eighties, GM decided that it must increase its ex-North America share by increasing its marketing in Latin America. One model it decided to bring to Brazil was the Chevy Nova. One can picture a bunch of Detroit-based marketing guys sitting in a room plotting to bring a good, fuel-efficient compact to a huge market would explode share ‘down there’. One small problem, Nova translates to “Won’t go” in Spanish. Oops. It probably didn’t help that not many left the lot.
While the DreamWorks debacle is not a direct parallel to the Nova, it illustrates the power of the disability market from the negative side. Leaders in this market are starting to understand the economic power that they wield stemming from their mammoth 53% demographic. Op-ed in the Washington Post, coverage on TV news and entertainment outlets coupled with rational arguments why this film ‘misses the mark’ are doing their jobs to make DreamWorks look rather base in this case. While not relevant here, business needs to be prepared to work with disability groups to work through ‘touchy’ issues before they blow up in their face.
DreamWorks’ mistake here was in believing that they are a niche/edgy production house, forgetting where it makes its money, namely kids and ‘wholesome’ programming. The executive team failed to recognize that by offending 53% of their market to produce a small property in “Thunder”, they are hacking off their nose, despite their face.
There is an easy way to avoid something like this, ask someone! Whether it’s a movie, a commercial or any other interaction with the public there are ways to vet and find out how messaging is perceived by the mega-segment of people with disabilities. There is almost no primary research on people with disabilities as a consumer. There are opportunities for consumer based firms to go out and run focus groups/surveys to clearly understand what turns this powerful consumer on, and as DreamWorks learned the hard way, what turns this market’s stomach.
What the DreamWorks mistake does not do is increase the risk in this market. It merely defines it. It clearly demonstrates the cost of a misstep while also defining the upside. While positive efforts won’t translate into equivalent media, because negative sells papers, it does translate the passion into sales. It clearly demonstrates that Customers are watching and are ready to pounce. There are no large brands out there making disability a core Customer, yet. The blowback out of DreamWorks has a flipside, and that flipside is powerful for expanding margins.
Another learning here is that disability is a mainstream issue. The days of markets ignoring disability are gone. Had one done a negative movie about African Americans in the 60s, the reaction would not be as vitriolic as it would be today. Doing a ‘retard’ joke in the 80s was acceptable. Doing it now presents real risks to the deliverer and those who are associated with them. The brand of disability is starting to be owned by those it represents.
New markets are risky, and DreamWorks demonstrated that by stepping in a deep pothole. The good news is that a well-run business should have no problems avoiding these mistakes. Any competent manager of a diverse business will find it common sense to stickhandle around these obstacles. The only issue here is being aware of these issues. In that way, we can thank DreamWorks for bringing this forward and teaching its competitors what not to do while showing the rest of us the explosive upside.
DreamWorks has learned this the hard way. http://www.washingtonpost.com/wp-dyn/content/article/2008/08/10/AR2008081001869.html Their new comedy, ‘Tropical Thunder’, opens this week. Part of the movie is dedicated to making fun of ethnic minorities and people with disabilities. On its own, this is not exactly high art, but hardly unheard of in today’s entertainment industry. The film overtly makes fun of people with disabilities as ‘retards’, going farther than any mainstream movie has in recent memory. Let’s be clear folks, ‘retard’ equals ‘nigger’ for people with disabilities in terms of the hate and discrimination that comes with the word. It causes a real passion in the 53% of the population who are touched by disability and emotional pain in those who struggle with discrimination on a daily basis.
Funny is good, and some may find this stuff funny, but for DreamWorks, it’s just bad business. It is just a bad business strategy that pushes a negative emotion button in half your customers. While ‘Tropical Thunder’ would never be a blockbuster, why would they risk audiences for properties like Shrek, Gladiator, Madagascar and any future blockbusters? It makes the Mouse House look even better.
There are learnings here. As one reaches out to a new market, one must understand where limits are. Communication with new markets is hard, because one simply does not know which messaging works and which messages fuel a mob mentality. General Motors has a classic story of a misstep in a new market. In the eighties, GM decided that it must increase its ex-North America share by increasing its marketing in Latin America. One model it decided to bring to Brazil was the Chevy Nova. One can picture a bunch of Detroit-based marketing guys sitting in a room plotting to bring a good, fuel-efficient compact to a huge market would explode share ‘down there’. One small problem, Nova translates to “Won’t go” in Spanish. Oops. It probably didn’t help that not many left the lot.
While the DreamWorks debacle is not a direct parallel to the Nova, it illustrates the power of the disability market from the negative side. Leaders in this market are starting to understand the economic power that they wield stemming from their mammoth 53% demographic. Op-ed in the Washington Post, coverage on TV news and entertainment outlets coupled with rational arguments why this film ‘misses the mark’ are doing their jobs to make DreamWorks look rather base in this case. While not relevant here, business needs to be prepared to work with disability groups to work through ‘touchy’ issues before they blow up in their face.
DreamWorks’ mistake here was in believing that they are a niche/edgy production house, forgetting where it makes its money, namely kids and ‘wholesome’ programming. The executive team failed to recognize that by offending 53% of their market to produce a small property in “Thunder”, they are hacking off their nose, despite their face.
There is an easy way to avoid something like this, ask someone! Whether it’s a movie, a commercial or any other interaction with the public there are ways to vet and find out how messaging is perceived by the mega-segment of people with disabilities. There is almost no primary research on people with disabilities as a consumer. There are opportunities for consumer based firms to go out and run focus groups/surveys to clearly understand what turns this powerful consumer on, and as DreamWorks learned the hard way, what turns this market’s stomach.
What the DreamWorks mistake does not do is increase the risk in this market. It merely defines it. It clearly demonstrates the cost of a misstep while also defining the upside. While positive efforts won’t translate into equivalent media, because negative sells papers, it does translate the passion into sales. It clearly demonstrates that Customers are watching and are ready to pounce. There are no large brands out there making disability a core Customer, yet. The blowback out of DreamWorks has a flipside, and that flipside is powerful for expanding margins.
Another learning here is that disability is a mainstream issue. The days of markets ignoring disability are gone. Had one done a negative movie about African Americans in the 60s, the reaction would not be as vitriolic as it would be today. Doing a ‘retard’ joke in the 80s was acceptable. Doing it now presents real risks to the deliverer and those who are associated with them. The brand of disability is starting to be owned by those it represents.
New markets are risky, and DreamWorks demonstrated that by stepping in a deep pothole. The good news is that a well-run business should have no problems avoiding these mistakes. Any competent manager of a diverse business will find it common sense to stickhandle around these obstacles. The only issue here is being aware of these issues. In that way, we can thank DreamWorks for bringing this forward and teaching its competitors what not to do while showing the rest of us the explosive upside.
Monday, August 4, 2008
Incentivizing Change – Providing the Spark
The environmental movement has learned an important lesson in the last 6 months. One can host concerts, win Oscars and run ‘Public Service Announcements’ ad nausea, but until an activity hits people in the pocketbook, they are slow to change behavior. The price of gas has doubled in recent years, causing a dramatic shift in how folks buy cars. In June, sales of SUVs at Ford dropped 54% from a year ago, a result that Mr. Gore cannot lay claim to. It is simply because the cost of operation (gas) outstripped the benefits of driving an SUV. The rational consumer always votes with their wallet.
‘Organic’ societal change takes generations. Views and values take time to evolve and work their way through accepted wisdom. Over history, great periods of change have come about from some kind of catalyst. Technology in the industrial and internet revolutions drove change. Political change in the ‘New World’ was brought about by excessive taxation. The French Revolution and the fall of the Czars in Russia were caused by rational consumers wanting to better themselves. These catalysts can all draw roots back to incentives, whether self-interested or dovetailing with some perceived social agenda.
Organizations, made up of human animals, can be viewed as a subset of society. These firms turn, dip and rise on the actions of individuals and how those individuals are aligned with the whole. There is a large body of research on the alignment of managers and employees to organization. One theory goes that if compensation is directly linked to the overt goals of an organization, employees and managers will perform better simply because what is good for organization is good for the employee. This theory has proven time and time again to be spot on.
Alignment has been accomplished in organizations to date largely through financial incentives tied to profitability and share price. Profit sharing has because the norm from the machine shop floor to the board room by compensating employees and officers with share ownership. Over the last 20 years, pay in the form of equity ownership has become the method to drive all players in the same direction.
Share based alignment makes sense at the macro level, but how does a firm drive tactical change? Individual businesses that need a rework or at a nascent stage are not usually linked to the performance of the whole yet can be critical to the future of a firm. A plant, a new technology or the next game-changing service must be treated as an investment, typically back loaded with returns. Bonuses, directly tied to measurable benchmarks are commonly implemented in these situations to keep eyes on the prize.
One of the questions posed when speaking of diversity, of which disability is the largest subset, is the question from line managers, “Why am I doing this? I need to meet my business goals and this is a distraction.” This question is an indication of senior management’s failure to align staff with corporate goals. Simply put, employees do what managers pay them to do. If diversity is important to a firm, they will build it into their compensation structure, top to bottom. If a firm says diversity is important to them, and they do not pay for diversity performance, they should be deemed as either delusional or somewhat less than forthright.
Put your money where your mouth is. A rather large company in Seattle, the one that does not sell coffee, is doing just that. The American Bar Association reports that Microsoft will pay its preferred outside counsel a 2 percent bonus if they meet diversity goals. This says to Softy’s lawyers that if their firms reflect Microsoft’s diverse Customer base, they get paid more. Simple, no? It is this author’s bet that this will work, and work well. Microsoft deserves kudos for aligning their suppliers with tactical goals through compensation. The question now becomes, does the maker of Windows include Disability in their definition of diversity? This is not clear.
The need for alignment around diversity within an organization is only needed if diversity is critical to business success. Let’s be clear, for most firms it is. Demographics say so. If you sell coal to steel plants, and all the Customer wants is coal, diversity is not critical for you. Any other consumer or public facing entity needs to make diversity goals central to its compensation system. How central depends on how diverse your source of revenue is, from either the production side or the Customer side. As a rule of thumb, if your employee base is above 10,000 and/or your customer base is above 100,000 your firm needs to incent diversity to drive growth and shareholder value.
Organizational change happens when managers cause it. They cause change by altering their team’s behavior to bring about a different result. This change eats up time and resources that could be allocated to other activities. It is in the manager’s best interest to allocate the most resources to the area where her compensation gets maximized. Therefore, if an organization desires change resulting in a more diverse employee and customer base, managers must be incented to move resources to that end. It is up to senior management to decide how important that shift is to the firm and the team will react to those signals.
Oil at $60 means more carbon in the air, regardless of the outcry. If society deems oil consumption negative to the environment, it must tax it to keep prices high enough to encourage switching. Activist ‘hot air’ does nothing in the short- to medium-term but add to CO2 emissions. The same is true of diversity within an organization. Until incentives are aligned, change will be a slow generational grind. The rational manager always follows her wallet.
‘Organic’ societal change takes generations. Views and values take time to evolve and work their way through accepted wisdom. Over history, great periods of change have come about from some kind of catalyst. Technology in the industrial and internet revolutions drove change. Political change in the ‘New World’ was brought about by excessive taxation. The French Revolution and the fall of the Czars in Russia were caused by rational consumers wanting to better themselves. These catalysts can all draw roots back to incentives, whether self-interested or dovetailing with some perceived social agenda.
Organizations, made up of human animals, can be viewed as a subset of society. These firms turn, dip and rise on the actions of individuals and how those individuals are aligned with the whole. There is a large body of research on the alignment of managers and employees to organization. One theory goes that if compensation is directly linked to the overt goals of an organization, employees and managers will perform better simply because what is good for organization is good for the employee. This theory has proven time and time again to be spot on.
Alignment has been accomplished in organizations to date largely through financial incentives tied to profitability and share price. Profit sharing has because the norm from the machine shop floor to the board room by compensating employees and officers with share ownership. Over the last 20 years, pay in the form of equity ownership has become the method to drive all players in the same direction.
Share based alignment makes sense at the macro level, but how does a firm drive tactical change? Individual businesses that need a rework or at a nascent stage are not usually linked to the performance of the whole yet can be critical to the future of a firm. A plant, a new technology or the next game-changing service must be treated as an investment, typically back loaded with returns. Bonuses, directly tied to measurable benchmarks are commonly implemented in these situations to keep eyes on the prize.
One of the questions posed when speaking of diversity, of which disability is the largest subset, is the question from line managers, “Why am I doing this? I need to meet my business goals and this is a distraction.” This question is an indication of senior management’s failure to align staff with corporate goals. Simply put, employees do what managers pay them to do. If diversity is important to a firm, they will build it into their compensation structure, top to bottom. If a firm says diversity is important to them, and they do not pay for diversity performance, they should be deemed as either delusional or somewhat less than forthright.
Put your money where your mouth is. A rather large company in Seattle, the one that does not sell coffee, is doing just that. The American Bar Association reports that Microsoft will pay its preferred outside counsel a 2 percent bonus if they meet diversity goals. This says to Softy’s lawyers that if their firms reflect Microsoft’s diverse Customer base, they get paid more. Simple, no? It is this author’s bet that this will work, and work well. Microsoft deserves kudos for aligning their suppliers with tactical goals through compensation. The question now becomes, does the maker of Windows include Disability in their definition of diversity? This is not clear.
The need for alignment around diversity within an organization is only needed if diversity is critical to business success. Let’s be clear, for most firms it is. Demographics say so. If you sell coal to steel plants, and all the Customer wants is coal, diversity is not critical for you. Any other consumer or public facing entity needs to make diversity goals central to its compensation system. How central depends on how diverse your source of revenue is, from either the production side or the Customer side. As a rule of thumb, if your employee base is above 10,000 and/or your customer base is above 100,000 your firm needs to incent diversity to drive growth and shareholder value.
Organizational change happens when managers cause it. They cause change by altering their team’s behavior to bring about a different result. This change eats up time and resources that could be allocated to other activities. It is in the manager’s best interest to allocate the most resources to the area where her compensation gets maximized. Therefore, if an organization desires change resulting in a more diverse employee and customer base, managers must be incented to move resources to that end. It is up to senior management to decide how important that shift is to the firm and the team will react to those signals.
Oil at $60 means more carbon in the air, regardless of the outcry. If society deems oil consumption negative to the environment, it must tax it to keep prices high enough to encourage switching. Activist ‘hot air’ does nothing in the short- to medium-term but add to CO2 emissions. The same is true of diversity within an organization. Until incentives are aligned, change will be a slow generational grind. The rational manager always follows her wallet.
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