The Gates of Business

Celebrated for both her outré style and musical prowess, the recording artist known as Lady Gaga is not only one of the world's biggest pop stars, but also one of the most recognized brands. She's garnered five Grammys, holds two spots in the 2011 Guinness Book of World Records including "Most Searched-For Female," as recorded by Google, and made international headlines for donning a dress made of red meat, which Time Magazine called the top fashion statement of 2010.

So it's almost shocking to recall that in the autumn of 2008, Lady Gaga, born Stefani Joanne Angelina Germanotta in New York City, was merely a supporting act in a reunion tour of the erstwhile-boy band, New Kids on the Block.

"When you tell that to people now they look at you like you must have your dates mixed up," says Harvard Business School Associate Professor Anita Elberse. "That was just three years ago, and now she is, by many measures, the biggest celebrity on the planet. Gaga is a marketing phenomenon."

This fall, Elberse will teach a case on Lady Gaga's meteoric career in her popular second-year MBA course, Strategic Marketing in Creative Industries, which focuses entirely on the media and entertainment sector, and which includes sessions on basketball star LeBron James, online video aggregator Hulu, the NFL, and the Metropolitan Opera, among other cases. The first part of the new case, dubbed Lady Gaga(A), places students in the shoes of the pop star's manager, Troy Carter, who faced the daunting and sudden task of launching the performer's first major solo concert tour in 2009.

Elberse developed the case based on extensive interviews with Carter and several other executives who are part of team Gaga, including Interscope Geffen A&M Vice Chairman Steve Berman, Live Nation's global touring CEO Arthur Fogel, William Morris Endeavor agent Marc Geiger, and producer Vincent Herbert.

Go big or go home?

In the autumn of 2009, Lady Gaga was set to go on the road with rapper Kanye West for a multimonth coheadlining arena concert tour, "Fame Kills." The event was supposed to launch in November but, on September 13, West famously stormed the stage at the MTV Music Awards, just as the young country star Taylor Swift was accepting the award for Best Female Video. West grabbed the microphone from Swift to announce, "Yo Taylor, I'm really happy for you, and I'mma let you finish, but [fellow nominee] Beyoncé had one of the best videos of all time." Millions of viewers were turned off by his impulsive bullying, and Carter and Lady Gaga, both in the audience, knew instantly that West's actions could threaten their plans for "Fame Kills."

Sure enough, a media attack ensued. West pulled out of the painstakingly planned tour. And Carter had to mull a decision that would have major implications for Lady Gaga, for concert promoter Live Nation, and for her publicity arm, the William Morris Endeavor agency. Should the performer continue with the arena tour solo? Should she develop a small tour for smaller venues? Or should she cancel the concert series entirely?

The case, which Elberse coauthored with Michael Christensen (HBS MBA '11) and which also benefited from research assistance by Kimball Thomas (HBS MBA '11), prompts an evaluation of the pros and cons of each possibility.

"Above all else, I hope the case will help students understand the economics and intricacies of the concert business," Elberse says. "When it comes to touring, the risks increase as the venues get larger, but the potential rewards increase, too."

With arena performances, the Gaga team was looking at some $12 million in start-up production costs alone. And for someone who had never played such large halls, jumping headfirst into a solo tour would be a huge challenge. On the other hand, with ticket prices averaging $100 to $125 each, the prospect of a sold-out 20,000-seat arena was tempting.

By developing a smaller schedule for smaller venues, the financial risks would decrease, but so would the financial incentives; ticket prices would likely vary between $60 and $100, with seating capacity maxing out at 8,000 per theater. The team also would face the challenge of redesigning a scaled-back tour in a matter of weeks. And her one previous headlining experience, a one-month circuit called "Fame Ball," involved small venues and was not profitable.

If they flat-out canceled the tour, team Gaga could certainly prevent losses beyond the $4 million already spent on "Fame Kills." But in delaying concerts indefinitely, they risked the prospect that Lady Gaga's star might fade without a tour to guide it.

"This became a crucial bet on the development of the artist Lady Gaga," Elberse says. The decision was vital because concerts are not only a great publicity tool for recorded music, but also an increasingly important source of income in their own right. As revenues from recorded music steadily declined from 2004 to 2008, concert revenues steadily rose, according to data presented in the case.

"Advances in digital technology have had a strong negative impact on recorded-music revenues," Elberse says. "That makes it all the more important for managers in the music industry to understand how to effectively manage touring."

As is the way of HBS cases, Lady Gaga(A) ends with a cliff-hanger, laying out the manager's choices without revealing which path he chose, so students can relive the decision process. However, it is no secret that Lady Gaga's star has continued to shine and thrive. A follow-up case, Lady Gaga (B), focuses on the release strategy for her latest album, Born This Way, and the brand partnerships that were born in the wake of her successes—including a sponsorship by Virgin Mobile, an opportunity to develop "Gaga-esque" products for Polaroid, and a spot in MAC Cosmetics' "Viva Glam" advertising campaign.

Connecting on social media

Lady Gaga's success was built on more than just her considerable abilities as a master entertainer, the case notes. Carter and his client saw early on the power of using popular social media avenues such as Facebook and Twitter to build a strong support base, fan by fan.

Starting in March 2008, to publicize her first single "Just Dance," Lady Gaga took to the social media airwaves with a decidedly handcrafted approach: she wrote (and continues to write) her own Tweets, and maintained close control over her other social media accounts.

Team Gaga's social media strategy also included syndicating her content—from videos to social messaging—for other media to point to, setting up personal interviews with influential music bloggers (the interviews generated 10 million impressions in a short time), and recording "webisodes" with low-budget flip-cams that followed her behind the scenes.

It all worked, but only because the passion between herself and her fans is genuine, a bond that social media helped forge. "They feel a sense of ownership," Carter says about Lady Gaga's fans. "They rally around her."

For entertainment executives reflecting on how the digital age is changing the ways they market their clients, Lady Gaga might represent a winning strategy from which to learn, Elberse believes. As Interscope's Vice Chairman Steve Berman observes in the case:

"[Lady Gaga] could be a chief marketing officer for a big corporation, because she understands the brand, and how important it is to stand by that brand."

Abstract

Objective. To identify, review, and evaluate survey instruments used to assess teamwork, a process critical to delivering quality care, so as to facilitate high quality research on this topic.

Data sources. The ISI Web of Knowledge database, which includes articles from MEDLINE, Social Science Citation Index, and Science Citation Index.

Study design. We conducted a systematic review of articles published before January 2010 to identify survey instruments used to measure teamwork and determine their psychometric validity.

Data extraction. We identified relevant articles using the search terms team, teamwork, work groups, or collaboration, in combination with survey or questionnaire.

Principal findings. We found 36 scales that measured teamwork; only 8 scales met all of the criteria for psychometric validity. Twelve of the 36 scales have shown significant relationship to non-self-report outcomes of interest. Each of these 12 scales assessed some dimension of the quality of social interactions between members. All but one also assessed some dimension of the quality of task-related interactions.

Conclusions. Numerous survey instruments exist to measure teamwork. Few have demonstrated all of the psychometric properties recommended for use, and there is inconsistency in conceptualizations of teamwork. More research is needed to develop and refine measures of teamwork for reliable use by researchers and practitioners/managers.

Pressure to not compete against men, rather than an innate preference for cooperation over competition, may keep women from earning what they're worth in the workplace, according to preliminary findings by three Harvard researchers.

In their forthcoming paper, The Untold Story of Gender and Incentives, Harvard Professors Kathleen L. McGinn and Iris Bohnet, along with HBS doctoral student Pinar Fletcher, examine how men and women respond when they cooperate or compete in pairs on math and verbal tasks.

What they unearthed in their early research is that how women and men perform at work may be strongly linked to the gender of the person they are competing against.

"Women are competitive, but not in particular work environments or groups," says McGinn, the Cahners-Rabb Professor and chair of the Doctoral Programs at Harvard Business School.

She and Bohnet, a professor at the Harvard Kennedy School who serves as director of its Women and Public Policy Program, have extensively studied gender gaps and inequality in the workplace. Their research addresses questions about why women are paid less, have trouble being promoted in certain work environments, and hold a tiny percentage of top corporate management positions. According to a 2010 report from research firm Catalyst, among Fortune 500 companies, only 2.6 percent of CEOs are women, 13.5 percent of executive officers are women, and 15.2 percent of board members are women.

They teamed with Fletcher, who is pursuing a doctoral degree in organizational behavior, to answer questions on gender, competition, and cooperation that have not been addressed in previous research: Do men and women react differently to diverse sorts of pay schemes? Do gender stereotypes about a task influence competitive and cooperative behavior among men and women? How does the gender composition of groups affect competition and cooperation among individuals?

The experiments

Fletcher and McGinn conducted experiments with 236 men and women in April and May of 2011, using cooperative and competitive scenarios in which participants performed both a verbal and a math test at Harvard Business School's Computer Lab for Experimental Research.

Each participant was given a pseudonym, with women receiving obviously female aliases (like Jennifer) and men obviously male names (like John). Then participants were paired with another participant—male against male, male against female, and female against female. Participants never knew the actual identities of their opponents, but they were given the pseudonym assigned to their opponent.

Competition between the participants was induced through a "winner-takes-all" payment scheme: only the participant with the higher score would receive a payment for each correct answer.

Cooperation was induced with a different payment scheme: the researchers would add up the number of correct answers each pair produced and split the payment equally between the two participants.

Interestingly, the researchers didn't find a significant difference in performance between the cooperative and the competitive payment schemes for either men or women. "This is in contrast to previous studies," says Fletcher. Prior research had found that men exerted extra effort and performed better than women when they were in a competitive situation, whereas women exerted similar amounts of effort whether or not they were competing.

In addition, past studies mostly utilized tasks that would stereotypically advantage men, such as math or maze tasks. The McGinn/Bohnet/Fletcher team built on that research by asking participants to complete tasks that were stereotypically female (verbal) and stereotypically male (math).

Each participant in the group completed an anagram and a math task. For the anagram task, participants raced against the clock to create as many four-letter words as possible from a scramble of letters. For the math task, they were given a set of two-digit numbers and asked to identify as many pairs that equaled 100 as possible in a given time.

Men scored slightly better than women on the math test, and women slightly higher on the verbal exam. But both men and women performed better when paired with somebody from their own gender—with the exception of the men's performance in the verbal task, which was not affected by the gender of their counterpart.

Fletcher says that homophily—our tendency to associate and form relationships with those who are similar to us—might lead individuals to feel more comfortable and perform better on same-gender teams, whether cooperative or competitive.

Then and now

How do the researchers explain the differences between past and present results? Perhaps it came down to money. In previous studies, Fletcher says, participants were offered a higher pay rate per correct answer in the competitive scenario, so it's possible that men respond more to higher pay rates than do women. Societal pressures might also hold women back from responding to higher pay as aggressively as men do, she adds.

Furthermore, Fletcher notes that previous studies compared behavior under an interdependent, competitive scheme with an independent, piece-rate scheme. In independent payment schemes, participants cannot influence each other's pay. In their study, two interdependent payment schemes—competitive and cooperative—were compared. As Fletcher explains, perhaps in previous studies men were responding to the interdependence built into competitive situations and the stereotypically male tasks utilized in these studies, rather than to competitive pressures per se.

McGinn says their results suggest that gender effects around competition are contextual and that the results depend on the sorts of tasks men and women are asked to complete and the gender of those with whom they are interacting.

"There's a strongly held assumption that men are competitive and women aren't, and our results show otherwise," she says. "Men and women work together differently when they're dependent [on each other] versus independent and when they work on stereotypically male or female tasks."

The team plans to draft an article based on the research, and to continue with additional tests to clarify and expand on the results. "At this point we have more questions than answers," Fletcher says.

One idea is to give test participants the option to choose a man or woman for a partner, instead of assigning one. This will enable the researchers to better understand how people choose their work partners—and how those choices impact the results in a competitive or cooperative environment.

Once their results are solidified in the lab the team will return to the field, find some prototypical situations within a workplace, and conduct a cross-organizational study, McGinn says.

Still, she says, the preliminary research already tells the team something quite significant: "Organizations need to think about the 'genderness' of their tasks and the composition of their groups."