We sat down with Cody Signore, one of our Senior Multimedia Producers, to talk about his experience filming and producing our newest HBX course, Negotiation Mastery: Unlocking Value in the Real World.

Who were the most interesting people you met while filming Negotiation Mastery?

All of them were fantastic. Betsy Broun, the Director of the Smithsonian American Art Museum, was great to talk to and her perspective on dealing with business and art was really interesting – how do you put a price on someone’s creativity? Chris Voss, a former FBI hostage negotiator and CEO of The Black Swan Group Ltd., told some fantastic stories. Many people we filmed talked about the importance of compromises, and then you have Chris who says that you can’t compromise. After all, you can’t say, "give me two hostages, and you keep the rest." Everyone we spoke to had interesting perspectives and we really experienced the differences in cultures and opinions from around the world.

How is it trying to negotiate with Professor Wheeler?

Ha, it was good! You know you're going to lose any negotiation with him, but he's a fantastic person, so I didn't have to worry. We learned a lot from him and those lessons informed how we presented information. He teaches the importance of empathy and knowing what the other side wants. We learned from that, anticipated what questions he would ask, and prepared answers to them ahead of time. It really raised the bar for us in terms of both production and creativity.

What was your favorite location you traveled to for Negotiation Mastery?

London and Dorset in the United Kingdom. Dorset is a small town with incredibly friendly people, and it's so peaceful. After the first three days we were there, we realized we hadn’t even seen a police officer! We did see a lot of sheep though.

Tell us about what it's like filming course content.

We try to get symbolic city shots from everywhere we go in order to give students the feeling that they are traveling the world with us. When we went to DC, we only had one day, so everything was really compressed. In a four-hour span we saw everything on the National Mall, circled the White House, and then went back to the airport. That’s pretty much how it went in every city we were in! There is so much that goes in to planning for these trips, as well as carrying and keeping track of seven bags of gear as you're moving around different cities.

How long it takes to edit a 30 second clip of content?

About an hour, give or take.

What do you like most about seeing these courses come together?

From the multimedia perspective, it’s an interesting task and difficult in some ways. Our videos are like a five hour documentary - one that you’re trying to launch, monitor, and plan for in a quick amount of time. It’s only been nine months since I was brought onto this project as a producer, and the course is launching next month! It has been satisfying to see all the pieces come together, from planning with different teams, to seeing concepts come together in animations, to seeing the videos, music, and all other aspects of the course work together to give the student an incredible learning experience.

What's the best advice someone has ever given you?

A teacher of mine when we were in film school told us, “The only reality is through the view finder.” No one else sees everything that is outside of the frame of your shot. They only see what you’re showing them. I thought this was fantastic because a single frame can say so much, and I think about that a lot as we pursue creative things here.

The other one is to always carry a Sharpie and a pen!

What’s your favorite part of your job?

Collaborating with everybody and trying to take that small idea and make it into something big, interesting, and accessible.

Finish this sentence: When I’m not at work, you can find me...

With my family and/or doing something creative.

What was your first job?

I worked at Party City as a seasonal employee for Halloween. I was there with some of my friends from high school, so it was quite an experience!

If you could travel anywhere in the world (that you haven’t yet been) where would you go?

I would love to go to Iceland.

Best book you’ve ever read?

Blood Meridian by Cormac McCarthy.

Favorite subject in school?

History!

For us here at Harvard Business School, budget season coincides with the NFL football season. While the idea of "budget season" may incite a few grunts or rolled eyes, careful budget plannning is an important component of running a business. Read on for important budgeting tips with a football twist!

Budgeting is a Team Sport!

A successful budget manager will need to tackle an organization's operations and engage with functional managers and their teams in order to understand the role of their group along with the work streams and tasks under their responsibility. However, before you start blitzing and tackling your fellow co-workers, it’s a good idea to review your organization's game plan.

What’s the Game Plan, Coach?

Budgets are built for the purpose of measuring and monitoring key activities in pursuit of an organization's goals and objectives. The game plan for many organizations comes in the form of mission statements, or multi-year strategic and financial plans. Before starting on building a budget, an understanding of your organizations goals and objectives is critical to creating a successful plan that will meet your needs.

Do Your Job!

Just like the players on a football team, each team member at an organization plays a specific role. Team members must focus their efforts on the components of an organizations objectives that are more in line with their area of expertise to help move the entire organization toward the goal line. Building a successful budget requires an understanding of these various players, the jobs they are tasked with, and the key metrics that drive them.

For example, what are the work streams that a marketing team is tasked with so that an organization can achieve its goals and objectives? What are the key metrics that drive and impact that work stream? The resulting answers are the building blocks of a budget.

Learn From the Past, But Focus on What's Ahead  

After a big win or loss, most coaches will tell you to shake it off, learn from it, and focus on the next game. Similarly, historical data is essential to building a budget but should be used as a reference point and not necessarily a starting point. Business conditions change rapidly and basing your current budget on historical information can adversely impact budgets within other areas of an organization. 

Huddle Up!

Regular communication is key to the success of a budget. Establish an organizational process to regularly review actual performance against the current budget. This is a critical part of building a successful budget that will allow teams to monitor their performance, re-allocate resources, and shift business priorities. 

Keep in mind that budgets are dynamic, and occasionally the team may need to call a budget audible to update the budget, or rather provide a forecast. Having a review process in place will facilitate the forecasting process and will allow the organization to have updated information to use in their decision making.

There’s been a lot written about cognitive biases in the last decade. If you walk into the Psychology section of Barnes of Noble today or browse Amazon for “decision-making,” you’re sure to see a library of books on how irrational humans can be. In my last post, I spoke of the first of the three - confirmation bias.

What's second on our list?

Over-Confidence

For newbies to the literature on cognitive biases, this one should at least be familiar. We’ve all met over-confident jerks that think planets revolve around them (you might even work for one), or the wishful thinkers with their head in the clouds, but all of us, myself included, have fallen victim to moments and sometimes stretches of over-confidence. If you’re like me, these stretches have usually ended with bitter disappointment, or even catastrophic failure. And yet, despite what we think we have “learned” for next time, we continue to be over-optimistic about our abilities and the state of the future. The same mistakes occur again and again.

In business, over-confidence is rampant. And it’s no surprise to see why. In complex organizations filled with many individuals with diverse ideas and views, you have to speak up to be heard and market your abilities to get noticed. Being humble takes a back seat to arguing without legs to stand on. How many M&As have you heard about that have failed? Quaker buying Snapple, anyone?

One outcome of over-confidence is missed deadlines and delayed projects on account of the planning fallacy. When’s the last time your business finished a project early? Or under budget? And yet we continue to create unrealistic project plans in hopes that the future will somehow be different than the present; this is over-confidence at its best/worst. Another classic example of over-confidence is the illusion of control, the idea that if we can quantify something, we can measure it, understand it, and thus manage it. Many financiers have fallen victim to this illusion for decades. And yet, as the market collapse of 2008 showed, confidence can sometimes only be an illusion.

If over-confidence is not constantly checked, poor business outcomes often result. Thus, businesses and individuals need to install objectivity into their systems to keep them in balance. For projects, teams should look at historical averages for timelines and past budgets to plan future projects. Another option is hiring consultants. There’s an old joke that consultants have made money for decades telling companies the things they already know but don’t want to hear. This is because companies were over-confident but didn’t want to admit it.

Look out for the third bias that befalls many organizations, coming soon.

The best business decisions are never ones of strategy, sales, or marketing - at least not directly. They are always people decisions. Who we hire, how we manage, and who we fire have far greater impacts on results than the things we usually think of as driving success.

This should be obvious to all of us; after all, decisions don’t just materialize from the ether, ready to be executed upon by managers sitting in a conference room primed to act. People make decisions. It’s probably not surprising we forget this. Headlines in the business sections of newspapers rarely read like this: Jane Doe Hires Well, Stock Price Soars. Instead, Jane’s successes are attributed to things like product decisions: Release of New Phone Drives Sales at Doe Industries.

My best business decisions have always been around people. Two in particular come to mind. One had to do with hiring; the other had to do with a termination. Let’s start with the latter.

I became the CEO of a manufacturing company in 2010 after a completing management buyout with some outside investors. When I took on the leadership role, one of the original founders was still in the business; the people I bought the company from had acquired the firm from him and had allowed him to stay in a very prominent role in the organization. In fact, he occupied the corner office in our brand new manufacturing plant. The founder was a great man. He was exceptionally smart and very good at what he did; he couldn’t have built a firm of the size he did without some skills. But he also (not surprisingly) had very strong views of how things should be done. Early on, I saw this as a problem. While having somebody who reports to you not buy into your own vision is a problem in general, it’s even more of a problem when that person is the previous owner and hired many of the men and women who still worked in the firm. Pretty quickly, issues arose around consistency of message, priorities, and the sharing (or lack thereof) of information. It was time for the founder to go. Over the course of six months, we worked together to organize a “soft” exit, essentially reducing the amount of time he spent at the office each month.

Upon his departure, things started to click. For example, he had been of the opinion that anybody we hired had to have fifteen years of experience in the type of manufacturing we were doing. The problem was that we were a highly specialize, niche business. And we were located in central Massachusetts, unable to draw talent from major metropolitan areas that were too far away for the average commuter. He also was subtly hostile to those with college degrees.  He didn’t have one, so why did our engineers need to? I used to tell him that anybody that met his hiring criteria already worked in the company! With his departure, I was more easily able to get hiring managers behind a new hiring philosophy and in short order we had added some very good personnel who significantly raised our talent bar. These new team members also more easily bought into the recently revised vision for our company, one centered on engineering excellence, not widget-making.

One of my other “best decisions” was around hiring. I ran a for-profit education location for a large multinational. When I arrived, the location had suffered some tough years, coming in annually as one of the worst performing sites. This location was in a major city and hosted students who were studying to prepare for the GRE, LSAT, GMAT and other standardized tests. When I got there, it became obvious what was driving the poor performance: much of the staff didn’t view themselves as customer service people but, rather, as academic administrators. While there’s nothing wrong with academic administrators, there is something wrong with putting them in a customer service role instead of an administrator role. We needed people who would provide service with a smile. A former waiter or retail delivery person fit the bill much better than an education bureaucrat. Within a year, the center I managed was in the top 5% based on several performance metrics. People matter that much.

While there are many decisions that can move the needle, nothing does it more than people decisions. Do that right, and the needle moves in the right direction. Do it wrong, and the needle will start trending toward “empty” … as will your company’s bank account.

Eric is a Director at Scholastic Entertainment who participated in the beta cohort of Leading with Finance. Along with his day job, he's also the co-owner of Lyla Tov Monsters, a stuffed animal company that he runs with his family.

Why did you decide to sign up for Leading with Finance?

I thought it would be useful for both my full-time job and my family business to understand some basic concepts of finance better. At Scholastic, I often work with other groups who are determining where and what money is being spent. For Lyla Tov Monsters, the class can help me plan for the future growth of the company.

What was your favorite part of the program?

My favorite part was definitely Unidentified Industries! That module required me to use information learned as well as common sense to puzzle out what industries were represented by their financial data. It was fun, informative, and made me think about finances in a way I hadn't previously considered.

How are you applying the skills you've learned in Leading with Finance?

In my job at a publicly traded corporation, I have been able to change my viewpoint of daily goals and accomplishments. Instead of just completing tasks to achieve an end goal, I now look at that end goal and consider how it affects the company as a whole and if there are financial goals and benefits that will increase the value of the company. In my family business, I am able to see what aspects of the business should be prioritized in order to attain value from short-term and long-term plans and expenditures of capital.

Any advice for people who will be taking Leading with Finance?

The most important thing I would say is to schedule your time to be able to get through each module without rushing. There is a large amount of information in each module and, though you can get through it quickly if you need to, you’ll get more benefit from it if you can take the time to really consider and reflect upon the knowledge being imparted.

Interested in gaining a toolkit for making smart financial decisions and the confidence to clearly communicate those decisions to key internal and external stakeholders?

You’ve probably been in a meeting where a lot of ideas are circulated about how to improve an existing product or service. In these meetings, differing opinions can quickly turn into a battle of long-winded defenses. Fortunately, the emergence of A/B testing – once thought to be exclusive to tech firms – has become a viable and cost-effective way for all types of businesses to identify and test value-creating ideas.

A/B Testing: in statistical terms, A/B testing is a method of two-sample hypothesis testing. In laymen’s terms, this means comparing the outcomes of two different choices (A and B) by running a controlled mini-experiment.

Although the concept of A/B testing was galvanized by Silicon Valley giants, the rationale behind A/B testing is not new. The practice borrows from traditional randomized-control trials to create smaller, more scalable experiments.

As a very basic example, let’s say you are an abstract artist. Your paintings are informed by the world around you, but you cannot merely mimic landscapes. You are confident in your technique, but you still aren’t sure how the outside world—and more importantly art critics—are going to respond to your new paintings. Assessing the quality of art is a famously challenging process.

If you were to employ A/B testing for this scenario, you would start by creating two different paintings that are exactly alike. As you continue working, you would decide to change one small thing—let’s say you add a red square to one painting and not the other. Again, this means that everything about the paintings are alike except for this one modification. Once the change is made, you display the two paintings in randomly selected art galleries across the country and wait for your art agent, or another unbiased third party, to gather the reactions and report back to you.

After each painting has been placed in a reasonable amount of art galleries, perhaps you are informed that the painting with the small change received significantly more praise, or maybe it did not. The hypothetical outcome does not matter. Rather, what matters is that you can be reasonably confident that your change will or will not make the painting better, and you can go on to create better art as a result.

The randomization aspect of this design is explicitly emphasized because randomization is the gold-standard for eliminating biases. Art is a subjective field and evolves over time, and so do the preferences and opinions of customers, clients, or coworkers. A/B testing is not a static process, and tests can be repeated or complemented if companies believe that findings may not be valid or applicable anymore.

Companies like Google, Amazon, and Facebook have all used A/B testing to help create more intuitive web layouts or ad campaigns. Customers benefit and companies can reap measurable monetary returns by catering to market preferences. Momentum is now building to use this method outside of Silicon Valley. Jim Manzi, the founder of Applied Predictive Technologies, has advocated for the use of randomized experiments in other aspects of business, politics, and society in his book Uncontrolled.

As a final note, it is imperative that the design of A/B testing be rigorous to ensure the validity of your results. Furthermore, there may be some decisions where internal opinions are more cost-effective or timely.

Interested to learn more about the technical and conceptual aspects of A/B testing and how it can be used? Take HBX CORe and discover the basics of Business Analytics, Financial Accounting, and Economics for Managers.

Daniella Patrick, Accenture Innovation Lab Product Manager, STEM mentor, and HBX Disruptive Strategy Participant

Daniella Patrick breaks down barriers, opens doors, creates opportunity, empowers women, and redefines the way people view themselves and the worlds in which they live. By day, Daniella is an Innovation Lab Product Manager at Accenture—an international consulting firm working at the intersection of business and technology. As the Innovation Lab Product Manager, Daniella works with a team building digital solutions to disrupt the world of human resources. When she's not in the lab, Daniella is teaching and mentoring young women in STEM (science, technology, engineering and math) and challenging the conventional thinking of "what an engineer looks like". 

While waitressing tables in high school, Daniella's grandmother questioned her as to what she wanted to do—how was she going to spend her life. Daniella knew she enjoyed improving processes, finding problems and employing new ways to solve them. Her grandmother suggested engineering and Daniella embraced it wholeheartedly. She made it her mission to learn mathematics and didn't stop until she earned a masters in Mathematics from New York University, adding to her BS in Mechanical Engineering. 

Daniella grew up knowing that no idea was too big and no dream was unattainable. Her mom, a single mother, was determined to succeed as a parent and still lead a successful career. Daniella points to her mom's creativity and resolve as inspiration, "When you have a life full of barriers and struggles, it's easy to succumb to it. It's easy to say this is all I can do. But for someone like my mom, she always pushed those limitations and never accepted no for an answer."

Daniella embraces and continues to build on her mother's approach to life. As a first generation college graduate, Daniella recognizes the importance of providing opportunities to people who thought they could never achieve their goals. She deems this "disrupting the status quo" and encourages us to think about the world as not just for a certain type of people—doing so, she says, will "change the way people envision the future." 

Want to learn more about disruption and other theories from Professor Christensen? Disruptive Strategy will equip you with the tools, frameworks, and intuition to make a difference.

Because financial valuation is always forward-looking, today's market prices should incorporate all information about a company's performance - including expectations of future performance. As a result, anyone looking to make money on an individual stock (or write a compelling blog post) needs to look for surprises - times when reality over- or underperformed expectations.

So far, this holiday season seems to be off to a roaring start. Online sales on Cyber Monday hit a record $3.45 billion this year, and online sales on Black Friday topped $3 billion for the first time. UPS CEO David Abney reported to Bloomberg on November 28 that he expected 14% higher shipping volume this year than last year.

So, when researching this holiday blog post, I found several articles speaking glowingly about the stocks of UPS and FedEx, driven by this huge demand. So far, in 2016, UPS is up 20% and FedEx is up 30%, they said, boldly.

It makes sense, and it makes a compelling story. But is is true? The market is supposed to incorporate all information - was the market really surprised that this holiday season was good?

Actually, it turns out, the market has been relatively unimpressed by online sales this season. For example, Amazon's stock fell 3.79% between Black Friday and the end of the month of November, while the overall market (as represented by the S&P 500 index) only fell 0.27%. That suggests online sales under-performed expectations.

How about UPS and FedEx? Well, UPS went up 0.21% between Black Friday and November 30, and FedEx is up 0.87% in the same timeframe. Most of this growth begins Tuesday, November 29 - so clearly, Cyber Monday sales made a difference, but these numbers aren't exactly the 20% and 30% those articles were referencing.

Turns out, UPS is up this year mostly because they raised their dividend in May, turned in reliably growing performance all year, and then announced the acquisition of Marken on November 7, a life sciences supply chain company that will open up new business opportunities for them. FedEx's story is much the same - it beat market expectations with its quarterly earnings in March and September, seeing large price jumps at those times. Compared to the effects these events had on stock prices, both companies' end-of-November performance barely registers.

No one wants to write a story about how stock performance largely comes down to solid operations and good business models - it's so much flashier and exciting to talk about holiday sales and shopping events. But the market has thousands and thousands of analysts and investors trying to guess what those sales will be - its unlikely their consensus will be too far away from the truth.

Because the market is always trying to value the infinite future, long-term operational performance will always cause larger price movements than one-time events, and even surprises can leave investors unimpressed if they don't also change opinions about the company's future as a whole.

Interested in gaining a toolkit for making smart financial decisions and the confidence to clearly communicate those decisions to key internal and external stakeholders?

For the past several months, we’ve been hard at work behind the scenes to prepare HBX’s newest course offering on negotiation. Developing a new course is an incredible undertaking – it involves nearly everybody in our 80-person office – from our software engineers who build enhancements to the course platform, to our program service team who handle student applications and enrollment, to our creative team which owns the full multimedia production. In total, the process takes anywhere from nine months to just over a year.

As a member of our content team, I work with Professor Wheeler to research, write, and develop all the materials for the course. This has included everything from developing the course syllabus, writing case studies, building and testing negotiation scenarios, and traveling near and far to interview our panel of negotiation experts.

We initiated course development in February 2016 with a blank whiteboard. While we were fortunate to have years of Professor Wheeler’s course materials, research, and experience to weave into the course, we had to contend with a critical question. We wanted to focus on the ways in which online education could – and should – differ from the HBS classroom experience. Specifically, we sought opportunities to broaden and build upon the classroom learning experience, and did so in a couple ways.

First, we incorporated a broad and diverse range of negotiation perspectives, including 12 expert negotiators and seven Harvard faculty members. Our experts span an incredible range of industry, function, and experience. We traveled to Washington, DC to tour the Smithsonian Museum of American Art and interview the Director of its collections, and then to Florence, Italy to interview the Global Chief Litigator of General Electric’s Oil & Gas Division. In Los Angeles, we spoke with the former FBI Lead International Kidnapping Negotiator. We interviewed entrepreneurs, a mediator, a literary agent, lawyers, businesspeople, strategists, and even a mayor.

Armed with these perspectives, we began our second round of filming. This time, we were in our studio, a professional soundstage near our offices in Allston, MA. As the course syllabus and outline took shape, we developed detailed scripts for Professor Wheeler’s lessons. These lessons are the backbone of the course, but are interspersed with material from our experts, additional faculty, and dozens of interactive teaching elements.

Our last few months have been consumed with finalizing the content and packaging it together. I’ve been working with our creative team to select video clips, which they’ve edited, animated, and brought to life. We’ve also been testing out new teaching elements which were built for the course. These technical enhancements enable students to negotiate live on the HBX course platform, take personality quizzes, and complete negotiation puzzles and games.

Overall, it’s been quite a journey! From all of us at HBX, we’re thrilled to share this incredible new course with you! If you're interested in learning more about Negotiation Mastery: Unlocking Value in the Real World, visit our website here.

When I graduated from college, I started a digital advertising agency focused on video advertising, called VidAdBox. It was a first business we started with a friend and ran it without giving it much thought - we reported to ourselves and based most decisions on “gut feeling."  While projects came in and paid the bills, we struggled to grow. It was hard to find the time to work, plan, market, and use outside financing to scale our business. Several years later, I moved with my family from Israel to the US because we were expecting our second child and my wife wanted to be closer to her family.

Soon after we moved, I got involved in a project where I had a chance to work on a research project and see the power of high throughput molecular data. While the project was short-lived, the experience turned my attention to molecular data and its applications in personalized medicine – precision diagnostics, clinical trials, and drug repurposing. My father, who has been working in bioinformatics research most of his life, encouraged me to take a closer look at this new dynamic and use my business experience to build a company.

So we started. One of the first things on our list was obtaining equity financing. I was full of energy and creativity, but my previous small small business experience gave me limited tools to produce the necessary analysis of market trends and financial models that would be convincing to investors. I felt that I wasn’t prepared, but did not have the time or money to quit everything I was doing and go back to school to get an MBA. I decided to search for an alternative program that would give me some practical skills and introduce me to key ideas in business and finance. I also hoped to keep on working on this idea while gaining these critical skills. 

After some research, I decided HBX CORe was a good fit. The program was a good mix of flexibility and accountability and provided a relevant set of topics for what I was trying to do. It turned out to be a great decision.

While a lot of information about investor pitches can be found online, most of the time the process involves lots of conversations. Sometimes, you have to be ready to walk an investor through your financial projections and demonstrate your ability to build an accurate budget in a short amount of time. I had to learn how to summarize data and business metrics and then present them in meaningful ways—harnessing the power of excel and its associated tools was key. Equally as important was knowing the language of business to describe our models, because, as you may know, presentation matters. 

While introducing me to the “language of business," HBX CORe also provided me with tools I put to work immediately. It gave me a platform to discuss my ideas and difficulties with peers who had different experiences. Finally, I received a credential that was validation for my new skills.

While enrolled in the program, I worked hard on my pitch and business summary that was to be presented to an angel investor. As I learned about product pricing, we received market data and a convincing picture started to clarify. The numbers finally started making sense – we had a product that could be ready for market in time for it to mature. Compiling this information into a series of presentations, we were able to successfully raise the needed seed capital for our new company, Pine Biotech. A big part of it was negotiating a licensing agreement for the technology for our platform. But a plan is never enough—it is all about the execution. In our case, that meant growing our team and involving ourselves in projects where we could showcase the power of our technology.

Today, I am the CEO of our company. We are headquartered in Boston and New Orleans and have six people working on different aspects of the business. Our key product is a SaaS hybrid cloud platform, T-BioInfo, that provides easy access to analysis of molecular data for diverse teams, including biologists and bioinformaticians. The T-BioInfo platform enables researchers to analyze genomic, transcriptomic, proteomic, and other types of biomedical big data using an intuitive graphical user interface.

In addition to making multi-omics analysis accessible to non-bioinformatician biologists, the platform includes a wide range of machine learning tools and user-friendly visualization. By placing these advanced tools into the hands of clinical researchers and pharmaceutical R&D, we envision revolutionizing the way improved personalized healthcare is developed in the coming years. We are working on multiple projects to enable molecular profiling for matching patients to clinical trials, discovery of small molecules for therapeutics, vaccines, and identification of new cellular pathways as target candidates. 

While we are just at the beginning, we are starting to see the hard work pay off. We were able to apply for research grants and establish collaborations to develop the platform further. This year, we scored our first contracts. In October 2016, the Pine Biotech pitch won the grand prize at The Pistoia Alliance competition. We had to pitch in front of companies like Astra Zeneca, Merck, and Thomson Reuters. In December, we will be finishing the Propeller accelerator program.

I am excited to see how things will develop from here – it’s been a hard, but exciting journey. I am thankful for the HBX CORe team for making their educational content available online in a format that helped me develop some of the essential skills I needed.

The CORe community consists of a rich and diverse group of learners. Want to learn more about other students who've participated in the program?