Among the many questions raised by Monday’s presidential debate – Who won? Was Hillary Clinton wearing an earpiece? Why was Donald Trump sniffing? – was this one: Does rehearsing pay? Clinton reportedly rehearsed intensively, while Trump reportedly didn’t rehearse at all. The most impartial judges of the outcome, markets in currencies, commodities, and stocks, declared Clinton the winner. Whether rehearsing pays in presidential debates may nonetheless remain one of those eternally unanswered questions, but in business the answer is absolutely clear. Rehearsal pays big, and most companies fail to achieve anything near its potential value.
For an example, check this Fortune article, published this morning, on the value of rehearsing your business’s response to a data breach. As it makes clear, simply bringing together your top executives plus key players from all major functions – IT, legal, communications, sales, marketing – and putting them through a simulated breach is guaranteed to reveal surprising gaps in your preparations. Diana Kelley, executive security adviser at IBM, cites new research showing how rehearsals can lower the costs of a breach.
More broadly, rehearsing crises that would be most damaging to your business, such as a deadly food-safety problem at a restaurant chain, will always pay dividends. Plenty of other skills can be improved vastly through rehearsal. Salespeople who relentlessly rehearse selling almost always outperform those who don’t. Some companies have even worked up highly realistic simulations of critical processes – such as packing and shipping high-value perishable bio-pharmaceuticals – in order to perform better and cut losses. The results have been spectacular.
So here’s the strange part: Hardly any companies do this, even though we all know it works. We watch football teams that practice six days a week and play one day. We make our kids practice the piano or clarinet every day for a recital every six months. We know it works. But on Monday morning we forget all of it and do the exact opposite. I once calculated that Jerry Rice, the greatest receiver in the history of football, spent about 3% of his football-related time actually playing in games. He spent the other 97% practicing. In business, we’re lucky if our ratio is the inverse and we spend 3% of our time practicing. Usually it’s 0%. We’re supposed to spend 100% of our time out there performing. And then company leaders are frustrated and baffled that the company isn’t performing better.
If you dare to raise the practice-to-performance ratio at your business, you’ll be out of the mainstream. You won’t be doing what your company’s peers are doing. Have the courage to defy convention. That’s one thing that distinguishes the best leaders from the rest.
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What We’re Reading Today
Wells Fargo CEO to forfeit $41 million
John Stumpf continues trying to manage the fake-accounts scandal, testifying tomorrow to a House committee. The $41-million clawback will come out of unvested equity awards, and Stumpf will not take a salary until the board concludes an internal investigation into the bank’s sales practices. JPMorgan Chase’s Jamie Dimon took a similar financial hit after the London Whale fiasco in 2012. Fortune
AB-InBev acquisition of SAB Miller clears final hurdle
Shareholders of both companies overwhelmingly approved the merger, clearing the deal for an expected closing on October 10. AB-InBev CEO Carlos Brito has spent nearly a year negotiating to finalize the merger, which was agreed upon last October. To get regulatory approval, AB-Inbev will sell SABMiller’s Peroni, Grolsch, and Meantime brands. BBC
Donald Trump unloads on debate moderator, beauty queen
A day after his poor showing in the first presidential debate, Trump abandoned the carefully crafted messages his team has tried to focus on over the past month. In a phone call with a Fox News program, he said his microphone had been tampered with and suggested he may attack Hillary Clinton by bringing up Bill‘s past indiscretions. He also doubled down on criticism of beauty queen Alicia Machado‘s weight. NYT
Authorities believe hacker has ties to Russia
Investigators think hacking of Democratic organizations in recent months is connected to Russia. U.S. authorities say hacker Guccifer 2.0 and the website DCLeaks.com, which has published some of the leaks, have direct ties to Russian hackers. Guccifer 2.0 denied any ties to Russia, which reiterated that it has no hand in any of the hacks. WSJ
Building a Better Leader
A new survey finds that HR employees spend only 31% of their time…
…working on strategic activities. Much of their time is spent responding to emails and filling out spreadsheets. HR People + Strategy
When you’ve taken on leadership, but you’re the youngest in the room…
…don’t be afraid to acknowledge that your subordinates have more experience. This can ease tension, enabling you to use their experience for the company’s good. Fortune
If you want to increase innovation…
…have a plan that will encourage it to happen. You can’t make it happen, but you can set goals and provide employees with appropriate tools. FastCoDesign
Cybersecurity took a back seat at Yahoo
Former and current employees say cleaning up Yahoo’s on-screen look often took priority over ensuring systems were secure under Marissa Mayer‘s leadership. Cybersecurity experts within the company were labeled the “Paranoids” while security initiatives received little funding for fear stronger security would scare away users. The recently revealed hack of 500 million Yahoo accounts could derail or otherwise affect Verizon’s planned purchase of Yahoo. NYT
Did the Trump Foundation hide Trump taxes?
A ticket broker claims he was asked to send $1.9 million he owed Donald Trump for a business transaction to the Trump Foundation instead. That would violate tax laws unless Trump reported receipt of the funds on his own tax return. The Trump campaign denies the allegation, which raises more questions about his tax returns, which he has yet to release. Fortune
Germany says it’s not developing plans to save Deutsche Bank
A German newspaper reports that the finance ministry is developing a plan in case John Cryan‘s Deutsche Bank can’t avoid paying a potential $14-billion fine to the U.S. government. The report says German leaders could help the bank sell assets at favorable rates and would even offer to take a 25% stake in the company as an extreme measure. The German government denies the report, and Cryan says the bank hasn’t gone to Chancellor Angela Merkel seeking support. Reuters
Up or Out
Cornelia Bargmann will step down from AstraZeneca’s board in order to join the Chan Zuckerberg Initiative as president of its science division. Reuters
Fortune Reads and Videos
Elon Musk unveils plan to reach Mars
The trip would take a year, and Musk wants humans to begin making the trip as early as 2024 — a very aggressive timeline. Fortune
Aetna will subsidize Apple Watches
Customers will get the subsidy in exchange for signing up for Aetna’s wellness program. Fortune
Walmart issues an apology…
…because one of its stores in Atlanta wouldn’t bake a “Blue Lives Matter” cake. It’s an example of why organizations can’t ignore the growing issue of race and policing. Fortune
More than 9 out of 10 people worldwide live in an area…
…with excessive air pollution. China’s citizens aren’t in the worst of it, contrary to popular belief. Fortune
Quote of the Day
“What I really want to try to achieve here is to make Mars seem possible – like it’s something we can achieve in our lifetimes…There are really two fundamental paths…One path is we stay on Earth forever and there will be some eventual extinction event. The other is to become a … multiplanet species, which I hope you will agree is the way to go.” — Elon Musk discussing his strategy to get humans to Mars in six years. Los Angeles Times