Research explores ways to improve team working

effectiveteamsIt goes without saying that teamwork and collaboration are key elements of what it means to be a social business.  Of course, teamwork is not always the best form of working, as an article I wrote earlier this summer highlighted.  Studies have suggested for instance, that ideation is often best done in isolation, with the collective then utilized in developing those ideas.

I’m going to assume for a minute though that you know the best time and place to engage your team rather than work independently of them, and focus this post on how you can best do that.  A new study suggests that the key to successful team work is what they call ‘information elaboration’ discussions.

What are these?  They are conversations whereby information is freely exchanged, ideas are shared and people feel confident in giving feedback on the perspectives of others, with the group then building this feedback into future behaviours.  The researchers suggest this is the holy grail of team work, and will allow specialized, cross-functional teams to truly capitalize on the diverse skills and knowledge within the team.

Having the right ingredients

The team go on to suggest that the best collectives have a strong enough mindset to underpin this desire for information elaboration discussions.  They reveal that getting team members aligned with this mindset quickly can allow the team to rapidly determine what information is relevant before then discussing the information in a detailed manner.

What’s more, they also recommend enrolling team members that are happy to take responsibility for leading the team and in collaborating the decision making process.  Trust was also found to play a big part in the success of the team, and people with a high level of ‘self-reliance beliefs’ were more inclined to mistrust others, with a derailing of collective efforts often a result.

The researchers suggested that this kind of team dynamic is especially important in an environment that is in any way turbulent or unpredictable.  The opposite is often the case when the environment involves more routine problems that take place in less disruptive settings.  In this kind of environment the detailed communication explained above can do little but waste resources.

“Specialized cross-functional teams working in dynamic, fast-paced environments will perform better when they are staffed with members who not only have the right technical skillsets, but also have the ability and motivation to exchange information in a rich and detailed manner,” the researchers conclude. “In less disruptive environments, teams should focus more on the formation of routines and the adoption of accepted practices to gain decision-making efficiencies.”

Study explores women in crowdfunding

Girl Holding Piggy BankIt’s tempting to think that crowdfunding is a wonderfully rational and meritocratic endeavour.  Gone are the days where your contacts mattered as much as your product.  With the crowd, you go direct to your audience and live and die based upon the quality of your offering.

Except it isn’t quite like that.  For instance, a study from earlier this year highlighted how the start you get with your funding significantly impacts the total money you raise.  When researchers gave a campaign a kick start (excuse the pun), they secured much more cash than those who had started from scratch.

Surely crowdfunding is gender neutral though?  A study from Hebrew University of Jerusalem suggests that it may well work in leveling the playing field for female entrepreneurs.

The researchers explored the efforts of over 13,500 entrepreneurs on Kickstarter, who had secured backing from nearly 900,000 investors to the tune of over $120 million over a 3 year period.  The results paint a fascinating picture of activity on the site.

It emerged that approximately 35% of all entrepreneurs on Kickstarter were female, whilst an impressive 44% of all investors were women.  What’s more, there were also some fascinating gender differences in the projects themselves.

It transpired that women would generally seek lower levels of capital for their projects, and subsequently raise less than their male counterparts.  However, women were shown to be more likely to succeed with funding their ventures.  The data showed that women would score success around 70% of the time, versus 61% for male entrepreneurs.  What’s more, analysis suggests that it wasn’t the lower funding target that was responsible for this.

It was also interesting to note the gender parity of support.  The data revealed that female entrepreneurs would receive financial support primarily from other women.  It emerged that male investors would only back 23% of the projects that had female project leads.

The researchers wanted to test whether this finding could be explained by women launching projects that simply didn’t appeal to men so much, such as in areas like fashion or dance.  They conducted a survey of Kickstarter investors and found there was a direct link between the investors views on gender equality and their propensity to back female led projects.

The study concludes that for women to gain access to funding, especially in traditionally male dominated fields, will probably require greater access to female investors.

“These findings indicate that the increasing prevalence of crowdfunding platforms may lead to increased participation of women as investors, and to an increase in the flow of capital to projects led by women. In order to further this trend it is important to encourage women to pursue opportunities is less traditional, male-dominated fields such as games, which may offer more growth opportunities than more traditional fields; and at the same time to work to change perceptions in the general population regarding gender equality, as those perceptions play a role in investment decisions,” they state.

And this is important.  I wrote earlier this year about a study looking at gender discrimination in venture funding.  It emerged that the investors were significantly more likely to choose male entrepreneurs over their female peers, even if the content of the pitch was practically identical.  And that wasn’t all.  It also emerged that the prettier the entrepreneur, the more persuasive they were found to be.  Providing they were male that is.  Women could be as pretty, or as ugly, as they wanted, it made no difference.

So anything that levels the playing field has to be a good thing, for entrepreneurs and investors alike.

How trolls can derail your crowdsourcing

crowdsourcingdeviantI’m a huge fan of the ability for crowdsourcing to enable organizations to tap into the wealth of talent that exists outside of their workforce.  There have been a huge number of successful projects in an extremely wide range of fields, from commercial to charitable.  That isn’t to say that all succeed however, and a new study outlines the malicious ways that some people employ to derail a crowdsourcing competition.

The study, which was published recently in the Journal of the Royal Society Interface, revealed that the very nature of crowdsourcing competitions, and in particular the first past the post variety, made them vulnerable to malicious attack.

The research employed game theory to study the possible trade-offs for organizations using a crowdsourcing competition to inject fresh talent and insight into a problem, whilst also judging the potential for malicious and un-ethical behaviour.  The researchers cite the DARPA Network Challenge as an example of a project that used a lot of time and energy managing the sheer number of fake submissions to the competition.

The study suggests that such activity has to be factored into the costs of running a crowdsourcing initiative, as it is sadly all too commonplace.

“Our work enhances the understanding of the strategic forces coming into play in crowdsourcing contests,” the researchers say.

The challenge of tackling such behaviour is not an easy one, as raising the costs of malicious entries did not stamp out bad behaviour entirely, and indeed led to more attacks by apparently weaker participants in a competition.

The researchers are at pains to point out however that the benefits of crowdsourcing far outweigh any potential negative elements.

“There is a skepticism about crowdsourcing – people think when you involve crowds you run the risks of attacks and vandalism…but there are many instances, particularly in non-profit contexts; for example the National library’s newspaper digitization project which had been running for more than five years and there hasn’t been any cases of vandalism.” they say.

They go on to highlight how such malicious behaviour is generally only evident in first past the post crowdsourcing projects that employ such a competitive element.  When less adversarial methods are employed, such as in many citizen science projects, then the rate of malicious behaviour drops significantly.

What can innovators learn from investors?

innovationchallengeIt’s fairly well known that many of our investment decisions, indeed many of our financial decisions full stop, are not entirely rational.  Could some of the biases that prompt our financial investments to go astray also provide us with some lessons on how to manage innovation more successfully?

After all, both fields deal with an uncertain future and force us to trade off between short and long-term goals.  Whilst the classical, and rational, economic man would make wholly sensible decisions on such things, the reality was often a whole lot fuzzier, which has sparked the rise in behavioural psychology.

With behavioural finance attempting to remove some of the biases that distort how we invest, can these insights cross over into our innovation decisions?  Lets look at four particular pitfalls investors make that have been explained by our new behavioural understanding.

  1. Failing to invest – One of the more well known examples of behavioural psychology chronicled in Nudge was an attempt to improve our willingness to save for retirement.  Around the world workers and policy makers have struggled with the challenge many face with saving now for a future that is far away.  A pension is a very rational investment, yet investment still lags behind what is recommended.  The primary reason for this is loss aversion, ie they are more aware of what they lose than what they gain.

    You can see this when you try and change something, because people are scared of losing the status quo.  So what can you do?  The retirement situation was challenged by automatically enrolling people onto schemes, so they’d need to actively opt-out.  With innovation, perhaps you could try committing to a specific R&D budget for the next few years, and communicate this widely so it can’t be welched on.

  2. Dawdling on decisions – When you’re looking to invest, the choice of stocks, funds and all of that is pretty overwhelming.  If there isn’t an easy, default option,then it’s easy to procrastinate and avoid making any kind of decision.

    When it comes to innovation therefore, you want to do all you can to make it the default option.  This involves building a culture whereby innovation is integral to all that you do.

  3. Focusing too much on details – The key to successful investing is having a strong portfolio.  This allows you to hedge the risk of one or two bad investments and prevents you focusing too heavily on individual stocks and more on the portfolio as a whole.  That’s the rational approach anyway, which is not always what investors do.  So poorly performing stocks get held onto in the hope they’ll rebound, which they seldom do, and the losses rack up.  In psychological terms this is a combination of loss aversion and the endowment effect, which respectively cause us to worry excessively about registering a loss and also valuing what we own too highly.

    All of which makes it hard to see the wood for the trees.  You can often fall into the same trap when innovating, with a focus on how much you have spent on projects and a reluctance to write them off and re-focus elsewhere.  It becomes what’s known as an escalation of commitment.

    Instead, treat your innovation projects as a portfolio so that you can easily allow failing projects to cease and invest afresh into more promising endeavours.  All with the crucial performance of the portfolio as a whole in mind.  A portfolio based approach would also allow you to provide a variety of risk throughout your projects.

  4. Doing what you’ve always done – With much in life, there is often a tendency to stick to what we know.  For instance, most investors favour stocks from their own country.  Data suggests that 87% of American portfolios consisted of US stock.  When investing, awareness of this bias can be enough to prompt as much diversity as possible in ones portfolio.

    When innovating, this fallacy is typified by the not invented here syndrome.  Utilizing things such as open innovation can be a great way of overcoming this fallacy as it doesn’t necessarily require you to actually identify external sources yourself, as they tend to be attracted to you instead.

There are many more psychological biases that may impact our ability to innovate effectively, but these should give you a start in applying behavioural thinking to your own attempts to innovate well.

Can your networking style predict start-up success?

networking-eventIt seems obvious that networking and connections are important for the success of a start-up venture.  Indeed, earlier this year I wrote about some research that revealed how many entrepreneurs are looking for the connections of investors as much as they are their money.

The report, called Building Bridges to Innovative Opportunities and published by Wharton, suggests that tech start-ups are increasingly looking for more than just financial support from backers, with a desire for operational help and industry expertise.

It’s clear therefore that connections matter.  A new study however underlines just how much this is so, with the suggestion that we can predict the success of a start-up purely by analyzing their networking style.The research team explored the impact different networking styles had on the profitability of particular start-ups.  The hypothesis being tested was that the different strategies deployed by entrepreneurs with their networking would have a different impact upon their profits.  In particular they wanted to test the balance between risk and safety when networking.
So, for instance, someone that plays it safe will largely network with people that they already know or that are very similar to themselves.  People who play a riskier game however will be much more open to talking with anyone and everyone.  Of course, research suggests that despite many of us claiming to want to network with different people, most of the time we actually network with those that are just like us.Anyway, the researchers suspected that those with the more open strategy would deliver better results for their business courtesy of having a larger pool of contacts.The researchers surveyed members of a professional networking group.  The group meet on a weekly basis to share leads and referrals amongst each other.  The survey asked members about their networking style and how many physical meetings they’d had with fellow group members recently.The results revealed that the more adventurous networkers would interact more frequently with other group members than their more conservative peers.  This in turn was found to results in higher revenue.

This causal link was formed after tracking how much money members would make from referrals by fellow group members, so they could directly hone in on the income derived from group networking activities.

“Because the life expectancy of an entrepreneurial venture is likely to be short,” the researchers say, “identifying ways to help entrepreneurs understand how to increase their chances for success is of considerable practical importance.”

The researchers conclude with a note of caution however in that they don’t propose a direct link between ones networking style and additional revenue, but rather that our networking style may have an indirect impact upon our revenue, courtesy of the impact our networking style has on the size of our network.

Of course, a varied network is also beneficial in other ways.  For instance, research has shown that a varied social network is incredibly valuable in learning and technological advancement.  Having a diverse group of people to tap for advice and expertise also ensured that the skills learned were retained for longer than in groups with fewer such mentors.  This ensured that cultural knowledge was more successfully passed down through generations.

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