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Jonah Peretti in the offices of BuzzFeed; photo by Benjamin Lowy Here is the official story of how BuzzFeed got started. Its founder, Jonah Peretti , was a 27-year old grad student who ordered some customizable Nike shoes on a "break" while working on his master's thesis at MIT. Peretti wanted the word "sweatshop" printed on the shoes; this gave rise to a string of email's with Nike's customer service department. image from 2001 ad for customizable Nike shoes Peretti forwarded the amusing email thread to some friends, who forwarded it to more friends...and soon Peretti had his moment of fame--he was on the Today show talking about labor practices with Nike reps. The "viral" spread of the email was an " internet meme ." Peretti pondered why goofy themes spread like crazy while important ideas did not seem to catch on. He developed BuzzFeed--which is an eclectic mix from the erudite to the ridiculous--to research what catches on and what does not. He applies his evolving theories to both the articles and the ad content on the site. By the way, the articles ARE the ad content. Virgin Mobile USA has posted several articles on BuzzFeed, and noted that one "paid-for-post" for Valentine's Day , "urging consumers to 'break up with their carrier'," produced a "95 percent spike in sales that day,” according to Ron Faris, Virgin Mobile's head of brand marketing. Virgin America has some informative "posts" as well. Detractors have complained that mixing up ads with content violates an important tenet of a free society ( Andrew Sullivan, The Dish ), but it seems to be working for BuzzFeed. Sources: " Does BuzzFeed Know the Secret? " by Andrew Rice, New York Magazine , April 7, 2013. Follow up: What is the BuzzFeed headline today? Will this headline be "going viral" in your opinion? Why or why not? What are the factors that contribute to an internet story becoming a meme? Read the entire article in New York Magazine and check out these sites for more data: Meme01 and Meme02 Who coined the term "meme"? What does it mean? Why are memes important to today's businesses?

image from futuristspeaker.com Businesses rely on an educated workforce. But there are problems in America's schools. According to a US Department of Education report quoted in the Harvard Political Review , "more than a quarter of high school seniors cannot read at a proficient level." Deficits in basic literacy and math skills mean increasing issues for American businesses in terms of hiring educated, number-savvy and creative people to respond to the constantly changing business and technological environment. The current trend in education in California has been to restrict funding for public institutions, while at the same time requiring increased "production," defined as successful students completing programs and heading for more education or into full time employment. The institutions' ability to meet "Student Learning Outcomes" and increase excellence are paramount. More recently, there has been a trend toward online education to solve the financial problems and increase standardization, but online education isn't for every type of learner. What research in Finland found was at odds with what education analysts in the US today are promulgating. The PISA survey has found that Finland's 15-year-olds rank #1 or close to it in reading, math and science. How did Finland get there? They adopted an educational model that included less homework, more creative play, and an absolute commitment to 100% public education: no private schools. That way everyone was committed to making the system work. In addition, they had no standardized tests except the National Matriculation Exam taken at the end of high school. In Finland, individual teachers are given considerable responsibility for the success of their students, but education is not competitive, it is based on co-operation. Since the 1980's, the primary "driver" of education "production" has been equity. The motivation came from a need to be economically competitive. According to Anu Partenen, "When Finnish policymakers decided to reform the country's education system in the 1970s, they did so because they realized that to be competitive, Finland couldn't rely on manufacturing or its scant natural resources and instead had to invest in a knowledge-based economy." With manufacturing already moving primarily overseas, a "knowledge-based economy" is also needed in the USA. Will the desire of politicians to contain education's costs through online classes be more equitable, or will it create a bigger divide between the educated and the under-performing work force? The changes in the textbook industry, flipped classrooms , and MOOCs may all be a piece of the evolving education management model. Business opportunities abound in this new arena. Sources: " What Americans Keep Ignoring about Finland's School Success ," by Anu Partenen, The Atlantic, December 29, 2011. " The Business of Education ," by Sarah Suskind, Harvard Political Review , August 20, 2011. " Jerry Brown continues to push for more online classes ," by Anthony York, latimesblogs.latimes.com, January 15, 2013. " The PISA Survey ": Organization for Economic Co-operation and Development. Follow up: What are the factors present in the American economy and business/educational environment that would work against the kind of success that Finland experienced? Could you see any way the Finnish model could succeed here? How would your own educational experience have been different? Make a list of the positives and negatives for you personally. Have you taken an online class? How did it compare with a class in the same subject area that you took on-ground, in a regular classroom? Are you they type of student that learns best on your own, or from others? What do you think higher education will be like 10-20 years from now?

image by M. Spencer Green, Associated Press, from article linked below Although CVS top management asserts that the policy is not company-wide, at least some CVS pharmacies have been filling prescriptions--and billing insurance companies--without patient approval. CVS supervisor Ryan Barna sent a series of emails to the 50 pharmacists in his New Jersey region. These emails informed pharmacists that they had to meet internal quotas: At least 30% of prescriptions had to be re-filled. " You need to go out and make this happen this week and every week going forward ," he instructed pharmacists, and added that " major personnel changes " would be among the consequences for those not meeting their quota. Barna advised the pharmacists to call the patients four times, then fill the prescription anyway, and leave a message with the patient that the prescription they needed would be ready for pick-up. CVS has previously been found to have enrolled patients in their automatic refill program, without prior patient approval. Also, at least one CVS email quoted this tactic as a "best practice." Insurance claims are submitted when the prescriptions are filled--not when the patients pick them up. The New Jersey Division of Consumer Affairs will be following up on this matter. As part of the LA Times article, David Lazarus contacted the California Board of Pharmacy and spoke to the Executive Director, Virginia Herrold, about the legality of refilling prescriptions with patient say-so. She said that such practices would constitute insurance fraud under California law. Source: " Don't need that drug refill? Here it is anyway " by David Lazarus, Los Angeles Times, October 5, 2012. Follow up: Read the entire article. Describe the protocol CVS uses when filled prescriptions are not picked up. What is one major negative consequence that this protocol can have for patients? Do you think the practice of refilling the prescriptions is ethical? What is a possible positive outcome for the patients? What do you think motivated Ryan Barna to encourage pharmacists to engage in this practice? Do you think we know the whole story about CVS policies and practices? Could there be a difference between the published policies and the de facto expectations of the corporate hierarchy? What would you do in Barna's situation?

image from businessinsider.com The conventional wisdom rationalizing the huge increase in CEO salaries over the last 30 years has been this: if the big bucks aren't paid, the talented CEO's will jump ship. However...a new study by Charles M. Elson (director of the John L. Weinberg Center for Corporate Governance, University of Delaware) and Craig K. Ferrere (an Edgar S. Woolard fellow at the Center) finds that CEO skills cannot transfer well from one corporate culture to another. What makes a CEO valuable is his or her very specific knowledge about one business. The "conventional wisdom", however, has made CEO pay increase seemingly without a ceiling. According to an article earlier this year in the Huffington Post , the median CEO salary of $9.587 million is 636 times the salary of a minimum wage worker, and 244 times the average salary of an American worker. Those supporting high pay, according to the NYT article linked below, say that the "generalist" skills in economics, finance and management can make managers successful in many companies. The recent research, however, tracks the actual moves of top executives, and their successes after those moves. This data does not support escalating pay to prevent executive flight, since no real competitive market exists. So what is an "honest day's pay" for an executive? Shareholder compensation committees will probably be the ones to wrestle with this issue. Source for the Elson/Ferrere study: NYT Business Day : " CEO's and the Pay 'em or Lose 'em Myth " by Gretchen Morgenson, September 23, 2012 . Follow up: What do you think is a fair basis on which to figure executive compensation? Should it be a multiple of lower salary pay, as some compensation theorists have proposed? (see LINK) Should it be a mix of base pay and compensation based on financial performance? Should there be tax disincentives for excessive corporate executive pay? Should there be a limitations when there are lay-offs of workers, or downsizing or other corporate events? How would you structure the arrangement?

image from blogs.indium.com Recently, in Texas, one of the political parties included in its platform the following: "We oppose the teaching of Higher Order Thinking Skills (HOTS) (values clarification), critical thinking skills and similar programs." [from " Texas...rejects 'critical thinking' skills. Really " by Valerie Strauss, July 9, 2012] As a business educator, I pondered the implications this might have for students as they enter the workplace. It seems to me that critical thinking skills make an employee more valuable. But what are critical thinking skills, really? And how to they relate to workplace tasks? I asked Ben Thomas, who writes about neuroscience on the Connectome website , to illustrate what the latest scientific research might have to say about the special critical thinking skills the human brain brings to solving workplace problems. Here's what he had to say: " Let's say you’re handed a big box of paperwork, and you’re asked to shred all the documents that look outdated. When in doubt, your boss says, just use your best judgment. You could start by shredding every sheet with a 20th-century date, or every page with an obsolete logo - but if you suddenly came across a handwritten sheet of crumbling yellowed parchment, you’d know instantly that it was something special (maybe the map to a lost treasure). Unlike a computer, though, you’d know this without having to be told. And scientists are getting closer to figuring out just how your brain stays so far ahead of the computing curve. This year, a team of neuroscientists at UC Santa Barbara scanned the brains of 18 volunteers as they searched for objects in common among hundreds of photos. Though none of the objects looked quite the same in any two of the photos, the exact same region of each volunteer’s brain lit up with a similar pattern of activity whenever he or she recognized a familiar object. What I mean is, your brain doesn’t need a separate area to recognize every logo you come across, every kind of paper you find, and so on - instead, you can decide which aspects of a particular page (its logo, date, parchment, etc.) are most relevant to your task, and consider those traits in light of your situation. Your nervous system does this by running all kinds of sensory input through a centralized chain of processing centers known as the dorsal frontoparietal network . One of the links in that network - an area known as the intraparietal sulcus (IPS) - helps your brain decide whether a certain object you’re seeing, hearing or feeling is the one you’re looking for. "As you go further up in processing, the neurons are less interested in a specific feature, but they're more interested in whatever is behaviorally relevant to you at the moment," said neuroscientist Miguel Eckstein, who led the UCSB study linked above. In other words, your IPS can “tune in” not only to a specific object, but to combinations of traits and features - like the logo, date and material of each sheet you pull out of a box. It also “re-tunes” itself as new traits and features become more important to you. Not even a supercomputer like IBM’s Watson can do all that as well as you can. In biology, just as in business, sharp intuition beats sheer speed nearly every time. So next time you’re up against some fierce competition, try taking advantage of your brain’s built-in power to rewrite its own rules - you might surprise yourself with an insight." Here is how I would translate this research to students who want to be told "the answer" to a question: Trust your inner voice. Your brain (the IPS) is hard-wired to make sense of information that it hasn't seen before--and integrate it in a way that can be useful. In addition, neuroscience holds clues about behavior that can guide marketers in getting customers to recognize and identify brands. Follow up: How can critical thinking skills save money for companies? For example, what kinds of mistakes might a computer (or a very literal-thinking wage-earner) make with the shredding project? How can you use this information to make yourself a more valuable employee? Or how can you use these ideas to identify a good candidate to hire? How can this information about brain processing be used in branding a product or idea? Interested in brain science? Visit the Connectome

Lisa Kron, playwright and actress, in "The Veri**on Play" photo by Alan Simons I recently had a customer service experience with an internet, TV, and phone provider in our area. I tried to cancel service at a temporary office. I placed the cancellation order two weeks before my move and three and one half weeks before my next bill would be due. My guess is my frustrating experience was similar to that of many others. The unanticipated consequences of my cancellation order included: information that the cancellation order was placed "too late" to avoid being billed for the month beginning after service termination; text messages from an outsourced equipment collector reminding me to return my box, using a "kit" that the service provider had failed to send out; wait times on hold of 25 to 45 minutes, after 4 minutes of required voicemail "conversations" with my service provider, resulting in a need to call another number... ...and the direct phone numbers landed me in the same queue as all calls; my autopay cancellation failed to allow for 6 business days to take effect...so my account was automatically charged 4 days before payment due date' two billing cycles must elapse before any refund can be issued; the cancellation confirmation number is "useless" for tracking my service disconnection request I guess I was in good company. Others seemed to have some of the same troubles I had with cancelling a service bundle: LINK TO FAQ THREAD . It is baffling that Zappos and Amazon can instantaneously bill my accounts for purchases, and credit my account when there are returns, but this close-to-monopoly entity cannot process an electronic transaction with precision or timeliness. A more creative individual than I am, Lisa Kron, wrote a play about her similar experiences. Lewis Lazare reviewed the play at the ReelChicago website (March 13, 2012). From his review: "If nothing else, the finished play by Kron and the production on view at the Actor's Theatre through April 1, should be a VERY forceful reminder that any major brand of whatever stripe must never, ever forget that superior customer service is of paramount importance." I checked out the professional organization Customer Service Institute of America and other customer service guidelines . It seems that stellar standards exist. I wonder what is keeping corporations from following them. Follow up: What is the name of Lisa Kron's play? What does she call the company in the play? Can you find any references of other creative works that highlighted poor customer service? Hint: Google "Lily Tomlin Ernestine" if you can't find any others. What are the qualities that make for good customer service by phone? What are the guiding principles of good customer service? Do customers take advantage of companies that provide good service? What are the pros and cons of providing good service? Are customer service standards different for retail sales (online) vs credit cards vs cable/internet providers? Why might differences exist? Describe your best and worst customer service experiences.

Habits and Individuals: a new perspective : post 1 of 3 in a series about how HABITS affect business. Habits are an integral part of our lives--according to Charles Duhigg they make up 40-45% of our actions every day. (see HBR podcast linked below.) But when we describe habits as "Good" or "Bad," we are probably thinking about habits from an outdated standpoint. Current brain science research shows us that habits are just a result of brain chemistry--brain chemistry that we can manipulate with training. According to both the HBR podcast and the Connectome podcast (also linked below), actions that are habits are housed in the "basal ganglia" portion of our brains. This is a primitive section of our brains from which no articulated thoughts arise--so these actions feel "automatic." Like most parts of our brains, however, the basal ganglia is responsive to the powerful and pleasurable brain chemical, dopamine . We do our thinking and experience new behaviors in the "frontal cortex" of our brains. The frontal cortex makes the judgments about what we might consider a "good" or "bad" habit, and can be the architect of changing our habits. In both school and work environments, many of us want to be perceived as a person who is trustworthy and reliable, so most of us what to have habits that are valued by the environment. Dealing with email, taking breaks, how we use the phone and how we interact with colleagues are all habitual behaviors that we can change. Using what scientists now know about habits can help. Charles Duhigg, in an interview on the Harvard Business Review Idea Cast , used one of his own habits to illustrate how to break down the process of habit formation on the individual level. Duhigg had a late afternoon cookie habit at the New York Times office where he works. He first analyzed this habit, breaking it into three parts: Trigger, Routine and Reward. Recent research has shown that the most important pieces of this triad are those that affect our brain chemistry: "Triggers" and "Rewards." The Triggers are usually based on Time, Place, People, Sensation or an Emotion. Duhigg figured that his cookie Trigger was Time-based. He identified the Routine (that he wanted to change) to be: go to the cafeteria, buy a cookie and eat the cookie while chatting with colleagues. The Reward piece was more difficult for Duhigg to analyze and unpack...because what might look like a reward (a cookie) might not be the reward--there might be several rewards embedded in the routine, only one of which would really satisfy the craving and power the habit. Duhigg had to ask himself: Was it relief from hunger? The sweet taste of the cookie? The walk to the cafeteria? The interaction with colleagues? Duhigg tested out a few combinations, and discovered that what was really "hitting the spot" for him was the interaction with colleagues. Once he knew this, he was ready to set up a new habit that would address the Trigger and the Reward, but insert a different Routine--one that would lead to less cookie consumption while maintaining the "fix" he needed--interaction with colleagues. The Connectome podcast tells us more about the chemistry of the brain...and the importance of the Reward, which in every case leads to the release of dopamine that satisfies the craving. According to Ben Thomas, anyone wanting to change a habit needs to identify exactly what part of the routine constitutes the reward that would set off that dopamine release. Thomas goes further, addressing the issue of why new habits might go fine for the first few days, but become harder to maintain. He also describes techniques--again, based on the way scientists now know our brains work--to ensure that the reward system for the brain stays in place while the actions that were initiated by the frontal cortex become a part of the habits of the basal ganglia. If a person wants to hard-wire a new behavior, and make it a habit, Thomas recommends the following: Repeat the activity. Reward yourself every time you do it. Reinforce the habit by associating it with triggers and rewards for two weeks, training your brain to expect the rush of dopamine every time. As individuals, we can apply these techniques to improving our personal lives and our business image and productivity. But these are powerful techniques. We can also apply what we know about habits to: managing entire corporation organizations (in blogpost 2 of this series), and marketing a new product (in blogpost 3 of this series) Experts: Charles Duhigg is the author of The Power of Habit: Why We Do What We Do In Life And Business and writes for the New York Times . B en Thomas is passionate about the brain and neuroscience and he blogs about it at The Connectome . Follow Up : Listen to the HBR podcast . What personal "keystone habit"does Duhigg mention? What are the other habits that change when...

Inspiring (or polarizing) personalities often find their places at the heads of large corporations. Hollywood's fictionalized CEO portrayals can be even more compelling. Alexander Diedrick discussed his favorite silver-screen corporate chiefs (and the lessons we can learn from them) in a recent post on our MyFootpath.com . His top 5 are: The Duke & Duke brothers from Trading Places --these are the villains who place a bet on the Dan Ackroyd and Eddie Murphy characters as though other peoples' lives are a game for their amusement. Lesson : Money does not free you from personal ethical responsibility. Ryan Bingham, the George Clooney character from Up in the Air --who starts the movie as a professional "downsizer" with a Teflon approach to interpersonal responsibility--and who ends up being forced to examine his life. Lesson : you can't pretend that your job is not who you are forever. Gordon Gekko, the Michael Douglas character from Wall Street --who will do anything to make more and more money, without ever questioning why. Lesson : "Greed is bad" according to Diedrick. Frank Cross, the Bill Murray character from Scrooged (or the Jacob Marley character from any version of A Christmas Carol )--a greedy, lonely man who is frightened by a multi-part dream of ghosts making him look at the consequences of his actions. Lesson : Honesty and fairness in business transactions can be more sustainable in terms of having a good life. Charles Foster Kane--the Orson Welles character in Citizen Kane , and loosely based on the real-life character of William Randolph Hearst--tells the tale of a man who builds a publishing empire by printing stories that are lurid and misleading. Lesson : living a life where one makes choices that hurt others can leave a person feeling lost and lonely...states of mind that cannot be salved by money. Follow up : Have you seen any of these films? What did you think of these characters? Do you agree or disagree with Mr. Diedrick? What other heads of business have been portrayed in films that you have seen? Consider the leads of: Margin Call Boiler Room Clerks Goodfellas Jerry Maguire Glengarry Glen Ross or...check out Bloomberg's list of Best Movies for Business Students for reminders