An important message about airport security

Here is an excellent post from the New York Times Jet Lagged blog. In it, Patrick Smith, a commercial pilot, systematically dissects the current state of airport security, arguing persuasively that nearly all the measures adopted to improve security are preventing old-style attacks or doing nothing useful at all.

Yet they cost millions of hours of time on behalf of passengers, and billions of dollars of extra personnel costs as well--helping to make air travel the misery it's become.

If you travel frequently by air, as I do, Smith's essay will ring true to you. Check it out.

travel

Why aren't more people talking about "The Future of Management"?

Nobody could accuse this blog of ignoring the new Gary Hamel book. It could be argued that I've beaten the poor book to death. But apparently I'm in the minority of business book readers. In today's New York Times business section, William Holstein's glowing review of "The Future of Management" states that

As insightful as Mr. Hamel’s book is, it’s surprising that it has attracted so little attention since being published in October.

Why is that? Holstein blames the business-school orthodoxy, the conventional wisdom of which the book attacks so persuasively.

But I think something else is at work. The prescriptions from "The Future of Management" are difficult to implement, even for those who believe in them passionately. They are not simple bromides or six-step lessons. They require changes in culture, philosophy and mental models--very hard challenges that take years--if not decades--to make happen. Many old-school companies will never be able to make these changes.

It's also not a high-concept business book like "The No Asshole Rule" or "Made to Stick." Those books are brief, their lessons easily digested. "To be a successful business, don't hire assholes."

My belief is that "The Future of Management" will be read and its lessons put into practice long after people begin hiring you-know-whats again.

management, leadership, reading list

A dozen Shop Talk posts you might have missed

While reflecting back on the year, I found that these posts still said something to me. Perhaps they will to you, too. Happy New Year, readers.

"The business world needs more wisdom, ethical conduct and compassion," October 9.

"Orange or Blue? - the power of brands," January 28.

"Cold calling with dignity (yours and the prospect's)," March 8.

"Are CEOs powerless to lead?" March 7.

"More Most Significant Change (MSC) - how to use for business?" April 19.

"Prospecting yields are low--get used to it," April 5.

"Networking: burden or pleasure? It depends on how you approach it," May 2.

"Yet more mistakes," June 1.

"Private Equity companies great business strategists? Baloney!" August 28.

"Predicting the future is hard: ask a psychic," August 14.

"If you can raise prices, don't hesitate," August 9.

"The Dissent-Free Organization: a worst practice," October 2.

top 10, blogs

Top 10 articles of the year

10 (tie). "Consumed: Boxed Set (the Buddha Machine)," Rob Walker, New York Times Magazine, July 29. The story of the most innovative music package in recent memory.

10 (tie). "Beyond Pokémon: Nintendo DS Goes To School in Japan," Yukari Iwatani Kane. Wall Street Journal, July 11. Video games are not just for goofing around anymore.

9. "Do Startups Really Need Business Plans?" Kelly Spors. Wall Street Journal, January 9. Going against the conventional wisdom.

8. "How Managers' Everyday Decisions Create--or Destroy--Your Company's Strategy," Joseph Bower and Clark Gilbert. Harvard Business Review, February.

7. "How Leaders Create and Use Networks," Herminia Ibarra and Mark Hunter. Harvard Business Review, January. There were several fascinating articles on using personal networks this year. This was the best.

6. "Strategic Insight in Three Circles," Joel Urbany and James Davis. Harvard Business Review, November. Creating and communicating a strategy using a Venn diagram.

5. "The Value Captor’s Process: Getting the Most out of Your New Business Ventures," Rita Gunther McGrath and Thomas Keil. Harvard Business Review, May. Companies can do a lot better with products that don't make the final grade, if they employ some basic tactics to get value from them.

4. "Can a Company Be Run As a Democracy?" Jaclyne Badal. Wall Street Journal, April 23. The subject of a growing number of articles this year. Perhaps this is telling us something.

3. "A Leader's Framework for Decisionmaking," Dave Snowden and Mary Boone. Harvard Business Review, November. How to navigate the maze of business problems, from simple to chaotic, using the Cynefin framework.

2. "Poisoned Toothpaste in Panama Is Believed to Be From China," and other articles by Walt Bogdanich et al. on the subject of tainted Chinese products. New York Times, May-October.

1. "At the Pentagon, an 'Encyclopedia of Ethical Failure,'" Jonathan Karp. Wall Street Journal, May 14. How one part of the US government uses stories of "worst practices" to help guide people in their ethical decisionmaking.

top 10

Find out what the "followers" think using story-gathering

I shied away from the upcoming book called "Followership" by Barbara Kellerman because I recoiled from the title, I think. I picture numbed souls trooping behind some charismatic leader, pointing the way to a promised land of market leadership. Which never arrives.

I've felt like those followers from time to time. And one of those leaders, as well.

But as described in today's Wall Street Journal, in an article by George Anders, I'm more intrigued by the book. I agree, for one thing, that big companies grow static because the rank-and-file (a better term than followers? I don't know) have lost heart. They come for the paycheck, try to stay under the radar so when job cuts happen, they get overlooked. Etc.

So, from that perspective, energizing the rank-and-file has a lot of potential to improve companies. It can't replace true leadership (see previous post), but combining a good strategy, competent leadership and an engaged and motivated workforce can create a world-beating company.

But how to engage the workforce? The Journal article summarizes one big problem:

"Look at why big companies die," says Shari Ballard, Best Buy's executive vice president, retail channel. "They implode on themselves. They create all these systems and processes -- and then end up with a very small percentage of people who are supposed to solve complex problems, while the other 98% of people just execute.

Bingo. In trying to get more production from their staffs, companies simply deploy another system. Systems aren't going to get it done. Even conducting and acting on surveys (a favorite tool discussed in the article) are hopelessly reductive. HP is on the right track, holding one-on-one interviews with employees to get their candid feedback.

How about using storytelling? Gathering groups of people into anecdote circles, collecting their stories, looking at all of them and drawing out the major themes--that will allow the deep understanding and wisdom of the rank-and-file to emerge.

Then you can do something to improve the employees' ability to make a difference. And when they realize they've actually been listened to--well, that's motivating.

narrative, management, leadership, followership, storytelling, organizational development, Wall Street Journal

A resurgent Kiwi helps redefine the shoe-care product category

I love stories of companies resuscitating old brands by creating innovative new products. It shows that "maturity" doesn't have to be the end of growth.

Today in the Wall Street Journal, a front page article by Julie Jargon discusses Kiwi, the ancient shoe-polish brand available in every drugstore (link - $$). When a new CEO, Brenda Barnes, was appointed to head Sara Lee, Kiwi's owner, in 2005, she looked to reinvigorate the company's growth.

The prescription was simple: Kiwi studied the market by asking customers what they needed from shoe products. (The most recent podcast, with Tony Ulwick, discussed how to get customers to tell you what they want.) Then they created products that matched what customers really wanted.

They learned: more focus on the inside of the shoe, its freshness, and less focus on polishing the outside. Presto! A line of new products, fresh packaging and merchandising, and an old brand beginning to grow again.

It's enough to make you want to check your closet for old shoes that need polishing up.

(Photo: Kiwi Fresh Force, "The only shoe freshener with a revolutionary upside-down application," courtesy of Kiwi)

innovation, marketing, product management

Five things people want in a manager

I helped conduct an interview today, and my colleague asked the following question: "What expectations would you have from a manager?" The candidate's response was startling to me in its simplicity and completeness. He said:

• professionalism
• courtesy
• empathy & understanding
• competence
• guidance & direction

That's it. That's all he asked for. Which doesn't seem too much to ask, does it?

management, leadership

Top 10 Blog Posts of the Year

Of all the blog posts I read this year, these had the most impact on me. Reviewing these, it occurs to me that blogging is really maturing into a vibrant, diverse art form. Let me know if you agree.

10. "Top 8 Reasons Consulting Doesn't Work," Achieve Market Leadership (Crimson Consulting). Author: Rick Sklarin.

9. "Why do people refer?" Duct Tape Marketing. Author: John Jantsch.

8. "Connectivity Trumps Productivity," Networks, Complexity, and Relatedness. Author: Patti Anklam. It really does! So we can all stop stressing out and just meet more people. Let's go!

7. "Web 2.0: The Machine is Us/ing Us." YouTube post. Creator: Michael Wesch. Words can't summarize it. Just watch.

6. "How to make rows more creative," Cognitive Edge guest blog. Author: Max Boisot. "Rows" meaning fights. Not fistfights, that is, but disagreements among colleagues. Great reading for those who want to encourage dissent in their workplace.

5. "The Electron Economy Part 1," Green Thoughts. Author: Michael Hoexter. A series of posts, now up to part 9 (!) advocating a move to electric power for most devices as the best way to save the planet.

4. "Viewing American class divisions through Facebook and MySpace," apophenia. Author: danah boyd. A thoughtful and courageous post.

3. "Mana for the Masses," Hobby Princess. Author: Ulla-Maaria Mutanen. About the spirit that inhabits things others have used.

2. "Can limitations and restrictions be liberating?" Presentation Zen. Author: Garr Reynolds. The title says it all. The answer, by the way, is yes.

1. "How to hit the Enterprise 2.0 bullseye," The Impact of IT on Businesses and their Leaders. Author: Andrew McAfee. Connecting enterprise 2.0 to business value via examining the relationships between colleagues and others in the enterprise.

top 10, blogs

Top 5 Best Business Books of 2007

(If you'd rather see the 2008 list, you can find it here.)

It's December, and "best of" lists are appearing everywhere. Here, too. So, if you are still searching for great gifts for the business-book reader in your family, you can't go wrong with any of these titles:

5. "Reinventing Project Management," Aaron Shenhar and Dov Dvir. A look at project management that goes way deeper, and is far more useful, than "on time, on budget, to requirements." Here's what I wrote about "RPM" earlier this year: 1, 2.





4. "Smart World," Richard Ogle. Innovative breakthroughs are not created by solitary thinkers toiling in the lab, but by people or groups interacting with their networks and environments. Prior posts on "Smart World": 1, 2.






3. "X-Teams," Deborah Ancona and Henrik Bresman. How great teams orient themselves externally and encourage dissent. Here's what I wrote about it back in May and June: 1, 2, 3, 4.






2. "Negotiation Genius," Deepak Malhotra and Max Bazerman. The best one-volume negotiation book you can buy at any price. Read a fuller review here.






1. "The Future of Management," Gary Hamel. (It's in stock at Amazon.) How to build a change-adaptable business in the 21st century. I did five posts on this book last year: start here.






negotiation, innovation, creativity, project management, organizational behavior, reading list

Saturday Extra: John Turturro for Best Supporting Actor

It's the home stretch for Oscar candidates, and I'd like to put in a vote for an unlikely candidate.

"Transformers" is probably the most entertaining movie I've seen all year, and Turturro's performance as the goofiest government agent ever is the greatest comic performance of the past five years. (Sorry, Borat.)

He probably could have won for any of a half-dozen other roles ("Do the Right Thing," "Barton Fink"), but it seems appropriate to finally win for a robot movie that's so oddly...human.

(If you're curious about "Transformers," the movie, click here to visit the IMDB page.)

movies, Transformers, Academy Awards, Oscars

Rendering Authenticity

I've been struggling through the new book “Authenticity” by Joseph Pine and James Gilmore, and I've been wondering why I've struggled. It's not a badly-written book, and I remember reading and liking some articles adapted from their earlier book, “The Experience Economy.” I'm also interested in the idea of authenticity (link to prior post). But nonetheless, I've read the book in fits and starts. It's been a chore.

As I was reading it this week, an idea hit: It's not just this book. I would have trouble reading any book that tells companies how to “render authenticity” through their products and services. (You can find a dictionary definition of the word authentic here. The third and fifth definitions most closely match what we're talking about in this post.)

The term “render” brings to mind soap factories--heavy processing, reformulation.

Authenticity is or should be natural, intrinsic, emerging from the essence of the thing. It's also, to some extent, in the eye of the beholder. Facebook has squandered some of its authenticity by its recent attempts to monetize. MySpace's is long gone. This is probably true of many internet startups. In growing out of hobbies or cult experiences to real businesses, they surrender authenticity. This is natural and maybe not a bad thing.

Large companies trying to conjure authenticity is a fool's errand, in my mind. One example of “perceived authenticity” cited by the authors is the HOK-designed baseball park, such as Camden Yards in Baltimore and its brethren. Camden Yards, when built, was authentic—a one-of-a-kind, new “old-style” ballpark. But when similar HOK designs emerged in Texas, San Francisco, Cincinnati, etc., it became merely a template. A good experience? Yes. Authentic? No. If you want baseball authenticity, go to Fenway or Wrigley.

I recall a Jay Leno comedy routine that he performed on David Letterman many years ago. It went something like this:

“Have you seen the new item they have in the supermarket? Soft cookies in a package. Now, this is interesting. Fresh cookies are soft. Stale cookies are hard. Now the food companies have discovered a technology that allows them to make stale, soft cookies.” Spoken this way, packaged soft cookies are not only funny, they're unappetizing.

Authenticity is a fresh cookie. “Rendered authenticity” is a stale, soft cookie.

marketing, authenticity, product development, reading list

(Bonus: the Jay Leno routine mentioned above. The way the food company discusses the soft-cookie idea seems like how a meeting on rendering authenticity would go.)

Re-branding: an oxymoron?

I recently saw a to-do list on the wall at a company's marketing department. At the top of the list was "re-branding." And I've been thinking about that for some days. What is re-branding?

At companies I'm familiar with, it means redoing the logo, new taglines, new color schemes for the website, new ad campaigns, etc. But the more I've thought about that to-do list, the more I've come to think that re-branding is a misnomer for this type of activity.

The outward characteristics of a brand don't mean much if they don't reflect the intrinsic characteristics of the company and its offerings. An old, staid company with a sleek modern logo hasn't added anything to its brand except perhaps confusion. It's hard to put into a formula, but I'd say something like

Brand = Company History + Customer Perceptions + Noncustomer Perceptions + Impact of (Advertising & Publicity)

The re-branding exercise most directly affects the latter, and, over time, noncustomer perceptions as well. It can't contradict company history or customer perceptions, so a complete reinvention of the brand is not possible.

Assuming equal weight to each, "re-branding" as it's understood by marketing people can alter your brand image up to 25%. It, of course, has the advantage that it can be executed by the marketing department--without the challenge of rewriting history and changing customers' perceptions.

So don't call it "re-branding." Call it "new logo," perhaps, or "new look." And be careful that your re-branding exercise doesn't distract you from the long, hard work of truly strengthening your brand. That takes more than the marketing department to do.

It takes everybody.

marketing, advertising, branding

Making and keeping commitments: a must for success in business

In a brief but potent post, professional-services expert David Maister points out the importance of keeping commitments. (I touched on this topic in an earlier post.) Writes Maister,

It is OK to need more time as long as you ask for it ahead of time. It is OK to struggle and ask for help.

It is not OK to break your commitments. The fastest and surest way to fail is to break your word.

It's a concept so basic as to seem trivial--yet the inability to create and honor commitments between co-workers, between managers and workers, and between workers and clients destroys value every single day, in every company, all over the world.

Maister focuses on one side--the responsibility of the assigned party to honor commitments. The other side also has responsibilities. Often people ask for commitments in a wishy-washy manner, which at minimum creates confusion and ambiguity, or at worst enables commitment-phobes to feign performance by using ambiguity as a rationale for non-action. Here are some examples:

1. Manager A sends out a note to entire team asking for something to be done.
2. Worker B sends email to co-worker, stating, "It would be great if you could do task X by next Friday. If I don't hear from you by tomorrow I'll assume that's OK."
3. Client C makes the same demand several times, ignoring any counter-proposals made in the meantime, hoping to wear down the vendor until they simply agree out of fatigue.

In these cases, the ultimate responsbility, unfortunately, reverts back to the assignee. You frankly can't allow people to get you to do things without creating the environment for a strong commitment. You need to probe and negotiate: "Which of us do you want to take this on, boss?" "I just got your note and I'm afraid I can't meet your desired date. Can we discuss and come up with an alternative?" "Help me understand why you want it done this particular way." etc. And then work to shape the request into a proper commitment that you can perform.

The environment that W. L. Gore Industries created (profiled in the new Gary Hamel book), is ideal for commitments. Any staffer asked to do something can accept or refuse the commitment. Once accepted, the commitment is expected to be completed. And a rigorous 360° review process incents people not to refuse every commitment (Bartleby the Scrivener wouldn't last long at Gore).

management, organizational behavior, commitments, collaboration, customer+management, consulting

Mobile + CD distribution partnerships = a new model for musicians

One of my favorite bands of the moment is LA's West Indian Girl. If you haven't heard them, you probably don't listen to stations like KCRW, KEXP and WXPN, noncommercial stations that play interesting music for adults. (You can stream West Indian Girl's new album, "4th and Wall," here.)

On a recent live performance on KCRW, WIG's bassist, Francis Ten, mentioned that the band has a unique partnership with Milan Records and flycell, a mobile content provider, in which flycell has invested in the band and has exclusive rights to market mobile content related to the band, including ringtones, wallpapers and videos. The structure of the music business, and how musicians are paid for recordings, are fascinating topics and getting ever more complicated due to music downloading, 360° contracts, licensing for TV and film, and the like. (See a related post here.)

For manufactured artists, the decline of the major record labels is a bad thing. But for enterprising, self-reliant, resourceful artists like West Indian Girl, the fracturing of the music industry provides them new ways to sustain and build their own careers. If they're still making and recording music ten years from now, it will say a lot of good things about the evolution of the music business.

Links to related streams (you'll have to listen to some great live music before the interviews):

• West Indian Girl outline their new distribution agreement on KCRW.
• West Indian Girl discuss their relationship with former label Astrelwerks and creative freedom on KEXP (select "full performance" to hear the interview).
  
• Andy Chase from Brookville discusses owning his own label and licensing music to film and TV, on KCRW.

(Photo: "4th & Wall" album cover via milanrecords.com)

marketing, innovation, music, strategy, distribution, mobile

Boeing learns hard lessons about partner management

(UPDATE: 11 Dec 07 - Boeing confirms it's on schedule for first 787 flight in 1Q2008)

I wrote a couple of weeks ago that the trend toward collaborative product development would create a premium for partner-management skills rather than pure technical skills for innovators. Nowhere is this in bolder relief than in the Boeing 787 project, some of the travails of which are profiled in a front-page Wall Street Journal article today (link - $$).

What surprised me the most were the issues resulting from inadequate supplier management; specifically this:

"In addition to oversight, you need insight into what's actually going on in those factories," says Scott Carson, the president of Boeing's Commercial Airplanes unit. "Had we had adequate insight, we could have helped our suppliers understand the challenges."

And this:

But many [Boeing partners], instead of using their own engineers to do the design work, farmed out this key task to even-smaller companies. Some of those ended up overloading themselves with work from multiple 787 suppliers, Boeing says.

The company says it never intended for its suppliers to outsource key tasks such as engineering, but that the situation seemed manageable at the time. "We tended to say, 'They know how to run their businesses,'" says a Boeing executive familiar with the company's thinking.

As Boeing knows now, selecting a strategic partner and entrusting it with designing, building and delivering a critical subsystem is far different from sourcing a standard part from a supplier. The prime contractor has the right and obligation to critique, probe and view its partner's activities from the inside (you need Doubting Thomases).

In the short term, these delays hurt Boeing. There is PR impact. And financial hits, in the form of penalty payments and cash-flow delays. But it is important to remember that the 787 product will have a 30-year life cycle. By that count, a 6-month or even 1-year delay in deliveries will have a negligible long-term effect.

It's also good that Boeing is not trying to mask its mistakes and instead to discuss and learn from them. Not everyone agrees: the Journal article states, "Lessons that Boeing is learning the hard way could end up helping rival Airbus." This will be true to some extent--but the highly complex lessons Boeing is learning will be hard to glean from the outside. If Airbus gets too confident in its follower role, it will overlook its own inevitable mistakes and let Boeing get out even farther ahead.

(Photo: the 787 Dreamliner. Courtesy of Boeing)

alliances, partnerships, innovation, aviation, mistakes, project management, product development, Wall Street Journal

Vivendi acquisition of Activision shows shift in videogame market

There's a perceptive article by Seth Schiesel in today's New York Times about how the proposed new company Activision Blizzard--a combination of the owners of Guitar Hero and World of Warcraft--demonstrates that the future of videogames relies on expanding beyond the core console audience of young-adult males.

gaming, videogames, marketing, , acquisitions, New York Times

An important new resource for improving innovation

Upon first reading this month's Harvard Business Review, I skated over “Breakthrough Thinking Inside the Box” (free link). I was probably too wrapped up in the storytelling article. Or I was concerned that this was another “strategic secret in 3000 words or less.”

After carefully reviewing the article today, it was a mistake to skip over it the first time. “Breakthrough Thinking” is a practical, useful and surprising look at generating new business ideas. The authors, Kevin Coyne, Patricia Gorman Clifford and Renée Dye, remind us of how frustrating typical brainstorming sessions are (“invent an idea for a new business in the next 20 minutes”). Then they go further to describe how such meetings can be infinitely more productive by laying out simple constraints to focus the mind and describe what form a useful new idea might take.

The creative usefulness of constraints is no secret, but “Breakthrough Thinking” is novel because it closely connects the right-brain creative flow process to a highly practical (and vital) business problem—improving innovation. I was also impressed by the rigorous approach used to create the method and the extensive in-use testing done before publicizing it (kudos to McKinsey).

My favorite part of the article is the sidebar “21 Great Questions for Developing New Products,” which should be cut out and pasted on the wall of every product manager, R&D vice president, or C-level executive. I can't count how many meetings I've been in where using this list would have greatly increased the results. I've thought of four or five instances where I can use the list in my own work, right away.

So, read “Breakthrough Thinking.” Paste “21 Great Questions” on your wall. And let the great ideas flow.

innovation, creativity, Harvard Business Review, product development

For consultants, adopting the "Google 20%" is vital

Let me paint you a picture. You're a consultant, and a company makes you an offer: Please work full time on our account. We'll take all the hours you can give us. Imagine, further, that this assignment lasts two or three years. Then, as with all consulting arrangements, it ends.

Now what do you do?

Paradoxically, the assignment has been so good that it has left you unprepared for the next one. And the more of yourself you devoted to that one assignment, the less time you spent keeping your contacts up to date, learning new skills, and marketing to other clients.

No one would trade the two-year client for a six-week client, but the six-week client cannot put your consulting business into the kind of long-term jeopardy the two-year client can.

The answer? Adopt the "Google 20%." Recall that Google asks each of its employees to dedicate one day per week to new projects of her choosing. A consultant who does the same automatically has a bank of time to spend on projects that, while they may not have a near-term payoff, are vital to the long-term health of the business. Examples: reading new literature, writing journal articles, taking on speaking engagements, trying brief assignments that open up new areas of experience, writing a blog, writing a newsletter, serving on an advisory board, developing a product idea.... The list of useful projects is endless, if only you dedicate the time and commit to using it productively.

It's not a strategy that's easy to implement. Convincing the client to take a little less than all of you can be tricky. Fitting in the 20% work around client needs also takes flexibility. And forgoing the immediate income can be very, very difficult.

But the payoff is great. Rather than being at the mercy of your client (no matter how wonderful they are to you), you are in control of your career and destiny. Frankly, continuing to build your skills (even in areas outside your current assignment) is something your clients should demand of you anyway.

(Photo by michelleho via stock.xchng)

sales, consulting, marketing, business development, networking, Google, product development, marketing

Complex solution sellers can learn from commodity salespeople

I've worked selling and marketing complex IT solutions for more than fifteen years now. I've done a fair amount of selling myself, and seen lots more people do it, with varying degrees of success. One thing I've observed, in myself and others, is that we can easily get entranced with the complexity, beauty and custom nature of our solution, and lose track of selling basics.

I was reminded of this a few years ago when our company was purchasing salesforce.com to manage our sales processes. Salesforce.com has, according to its website, more than 38,000 customers. They can customize a few things about the offering, but the price point (around $75 per user per month) and the sheer volume of customers they serve don't allow for heavily customized solutions. Most of the tailoring you want, you do yourself. It's like self-service at the grocery store.

However, the salesforce.com staff was the best I'd ever seen on managing the basics of a sales cycle. The pre-sales engineer, who responded to my web inquiry, carefully asked questions about the size of the organization, what we did for sales management software before, who else we were considering, and whether we had appropriate levels of approval for the purchase.

He didn't hand off the account to sales until we were truly qualified--as I recall, when I had asked for a proposal. Then the salesperson picked right up on the trail of managing us toward closure. "What is your approval process?" "When is the meeting scheduled to review and approve the solution?" "Who will sign the contract?" "Who else should I be talking to to help you evaluate salesforce?" And, perhaps most powerfully, "When will you be taking your next action on this purchase?"--with a follow-up soon after that date had passed. (Click here and here for some simple but useful resources on sales process from the salesforce website.)

Virtually every salesperson knows these rules. But it's easy to lose sight of them when you're managing a complex sales engagement. Often times, we ask half the question or settle for half the answer. We don't want to be too pushy, or we expect the logic of our solution to be self-evident.

But putting the basics to use as religiously as the salesforce.com staff will allow you to close more deals--and stop pursuing losing deals earlier with much less effort wasted.

(Postscript: the salesforce.com salesperson didn't stop there. After we signed our agreement, she monitored our usage and called me when it appeared we weren't fully using the service. "When are you going to send your administrator to training?" "When do you expect all your salespeople to be adding all their opportunities to the system?" She understood that if we didn't commit to the system, we wouldn't get value from it, and wouldn't renew our contract a year hence. Another good lesson for all salespeople.)

(NOTE: I have no connection, financial or otherwise, to salesforce.com. I have not talked to them on any subject in more than two years.)

sales, sales process

Is there a health-care crisis in the US? The averages may say no... but the stories say yes

I've been drawn to write about the health-care situation in the US for some time. There have been very powerful proposals, such as this one by Michael Porter and Elizabeth Teisberg a few years ago, that I thought deserved advocating (link - $$).

In addition, for the past year I have bought my own health insurance (instead of having it provided by an employer) and with my wife managed the resulting insurer/caregiver/patient relationships. And, let me tell you, doing it yourself opens up a whole new window onto the health-care world. Buying your own insurance and managing your own care allows you to see deep into the sausage factory that is today's US health-care ecosystem.

Nonetheless, I held back. Perhaps our situation and experience were unique. Perhaps struggles and issues we had were due to our own mistakes. (We made some, perhaps many.) I also resisted the overheated rhetoric and drastic solutions proposed by some politicians. In addition, economists like Greg Mankiw provided analysis showing public concern about the issue is overblown.

The I read the front-page story in yesterday's Wall Street Journal by John Carreyrou (link - $$). It was horrifying to read about the gentleman who, despite better-than-average health-care coverage, ended up owing more than $1 million to hospitals, doctors, etc. And while the dollar figure was astonishing, more intriguing to me were the problems and issues he and his wife ran into while trying to understand and manage the bills. These problems and issues were very similar (though larger, of course) than issues my wife and I have run into in trying to manage health-care for our healthy family.

Typical issues include:

1. Difficulty in getting billing and reimbursement details from caregivers and insurers
2. Coding of invoices to maximize caregiver insurance reimbursement--not always accurately reflecting what was done
3. Frequent rejection of charges by insurers, causing the patient to intervene to try to not pay more than is appropriate (a difficult task--see issue #1)
   
4. Onerous collections procedures (at my former company, we used more care and respect in trying to collect a $10 phone bill than many caregivers and hospitals use in trying to collect bills amounting to hundreds or thousands of dollars--bills which are usually in dispute)
5. 200-300% price differences between insurer-negotiated prices and those consumers must pay for the same product or service
   

In the Journal article, there is a happy ending--sort of.

Earlier this week, Mrs. Dawson was contacted by a CPMC official with surprising news. The hospital said Mr. Dawson had qualified for financial assistance under its charity-care policy and wrote off his entire bill. Asked why the Dawsons hadn't been told they could qualify for charity care before a reporter contacted the hospital, CPMC said Mrs. Dawson never gave it the opportunity to explain its policy to her.

Of course, blame the customer. That is an old strategy which my wife and I have encountered often in working with the health-care system.

So while I can't argue with Prof. Mankiw's math, his figures reflect broad averages which bleach out the real pain and injustice suffered by many. (Prof. Mankiw has been fortunate enough to have two of the world's great health-insurance providers--the Federal Government and Harvard University--as employers.) And, I would wager, given that companies are pulling back more and more on their health-insurance benefits, more people are becoming responsible for management of their own health care--meaning an increasing number of people will get to experience that pain and injustice, unless the system gets some real reform. (Politicians, please read the Porter/Teisberg paper!)

The averages say the situation is fine. The stories paint a very different picture.

We expect from the health-care system compassion, fairness, respect and dignity. Often, in the doctor's office or the hospital, we get them. Once the subject shifts to money and payment, however, they vanish into the air like smoke.

healthcare, health care, insurance, reform, customer service, Wall Street Journal

Religion and science both require faith

I've been thinking all week about a New York Times Op-Ed article from Saturday, by the cosmologist Paul Davies of Arizona State University, which stated that if you're a scientist you have to have faith--faith in there being an order in the universe sufficient to support the laws of physics, chemistry, biology, etc. Beneath every testable theory we've developed, there is a point at which the greatest scientists say, "It is that way just because." or "We take that as a given."

Writes Davies,

Clearly, then, both religion and science are founded on faith — namely, on belief in the existence of something outside the universe, like an unexplained God or an unexplained set of physical laws, maybe even a huge ensemble of unseen universes, too. For that reason, both monotheistic religion and orthodox science fail to provide a complete account of physical existence.

It's humbling to think, with all the discoveries we've made, all the rules we've constructed about the universe, at the base of it is a vast, possibly infinite number of things we don't know and won't ever know. It made me think that maybe religious faith and science are more reconcilable than they might seem.

(Photo: N81 in the Small Mag from NASA's GRIN site.)

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faith, religion, science, cosmos, spoken post, New York Times

A Hollywood producer's master class on business storytelling

Following on to yesterday's post on political storytelling--in the December Harvard Business Review, Peter Guber, best described, I guess, as a Hollywood mogul (former head of Columbia Pictures, producer of "Batman" and "Rain Man," among others), writes about "Four Truths of the Storyteller" (link - $$).

It's an excellent article, and encapsulates in seven pages most of what it takes "Made to Stick" 200 pages to describe. Appropriately, he starts with a story, about charming Fidel Castro into allowing his team to shoot a documentary in Havana harbor. But he goes much further, to illustrate why storytelling is important in business--"for the leader, story-telling is action-oriented - a force for turning dreams into goals and then into results."

Guber's four truths are as follows:

1. Truth to the Teller - in other words, authenticity, via candor and revealing of emotion. One of the biggest assets stories bring is the light they shine on the teller herself. (One frequent criticism I've heard in story workshops--"this reveals more about the author than the characters"--isn't all bad.)
   
   
2. Truth to the Audience - Guber defines this as "the promise that the expectations of the listener, once aroused, will be fulfilled." As one of my writing teachers once put it, "a good ending is both surprising and inevitable."
   
   
3. Truth to the Moment - a good story adapts to the context in which it is told. This does not mean that it is synthetic, but that it absorbs the energy and atmosphere of its surroundings. Perhaps a detail that was not important in one telling becomes vital in another. This is one way in which a good story differs from a bad story--a good story can be retold many times without becoming trite or cliched. Guber emphasizes the need for preparation--a story is like an iceberg: some information is revealed, but far more information lies beneath the surface. And the storyteller must know all of it.
   
   
4. Truth to the Mission - finally, the story must be bigger than the storyteller. As Guber puts it, "mission is embodied in his stories, which capture and express values that he believes in and wants others to adopt as their own." He mentions as an example Nobel Laureate Muhammad Yunus, whose storytelling ability helped grow a modest idea, microfinance, into a worldwide phenomenon. (Here's a Yunus story that was particularly inspiring to me.)

In his introductory column, HBR editor Thomas Stewart wrote, "'Four Truths of the Storyteller' [is] one of the smartest leadership articles you'll have read in some time." I agree.

storytelling, business, narrative, leadership, communication, Harvard Business Review

Political storytelling and authenticity

In the business narrative/storytelling corner of the blogosphere, there's been some discussion of the role of stories in the recent Australian election. On the one hand, Shawn Callahan has discussed the value that stories had in presenting and communicating the virtues of Prime Minister-elect Kevin Rudd, and of Parliamentary candidate Maxine McKew. On the other hand, Dave Snowden dismissed most political storytelling, including Rudd's, as insincere propaganda.

My thoughts? Storytelling and narrative are powerful tools. Within them is the power to communicate deeply--and to manipulate. I view the narratives of politicians, especially those running for high office, with a great deal of cynicism. Why? Because a story of a politician deeply moved by an encounter with an ordinary citizen doesn't square with the counter-story of the politician's well-researched and market-tested "message," spin doctors, and the careful stage-managing of campaign events.

The most memorable story I recall of an American politician was President George H.W. Bush (I believe; it might have been Reagan) attending a baseball game, ordering a hot dog, and looking sheepishly to his Secret Service men to pay for it, since he never carried any money on him.

I remember another story about a Cabinet secretary whose biggest adjustment, after leaving office, was losing his chauffeur and having to drive himself around for the first time in six years.

These stories say a lot to me about how Presidents and Prime Ministers relate to the constituency. There's nothing wrong with it, per se, but the "My world is a lot different from your world" stories drown out the down-to-earth stories they tell about themselves.

storytelling, politics, narrative, marketing

Shop Talk Podcast #4 - Tony Ulwick on Determining What Customers Really Want from New Products

The podcast is back, this time featuring Tony Ulwick, author of the book "What Customers Want" and CEO of Strategyn, a consulting firm helping companies improve their innovation processes.

We're talking about how to gather information from customers to drive innovation. Most companies have "voice of the customer" programs, but few know how to extract quality information from those programs. It takes asking the right questions, and removing ambiguity from the answers. In the podcast, Tony states that it's wrong to assume that users can't tell us what they want; instead, the problem is that "companies don't know how to listen to customers."

You can access the podcast here.

Here are links to companies, people, etc., mentioned in the podcast:

Clayton Christensen - "focus on the job the user wants to get done"
Theodore Levitt's "Customers don't want a 1/4" drill"
Apple
Strategyn White Papers

podcast, innovation, management, marketing, product management

Innovative companies must excel at partnering

There's a fascinating interview at Harvard Business School Working Knowledge with HBS professor Alan MacCormack, covering innovation and how it's moving away from Corporate R&D and into a collaborative web of partnering & alliances. (You can find a working paper on the subject here.)

According to MacCormack, there are several reasons why this is so:

1. Products are becoming more complex, and therefore it's impossible to retain all the competencies in house to create them.
2. Open standards and architectures help allow work to be more readily distributed to partners.
   
3. The growth of developing economies means that competitive, at times distinctive work is available at lower prices.

The implications of collaborative innovation fascinate me. It means that R&D professionals will need more negotiation and management skills than technical skills, and that the ability to manage internal politics will be less important than the need to bridge corporate & geographic cultures.

I'm not aware of anything in business-school curricula to prepare the next generation of managers for this challenge. (HBS students should seek out courses by Bazerman and Malhotra, as well as MacCormack.) There certainly was nothing of this sort that I learned for my MBA--any learning was entirely OJT.

negotiation, innovation, open innovation, alliances, HBS Working Knowledge

IT Risk - platform and architecture matter

Once, in my days running sales and marketing for a software company, the VP of Technology was growing agitated with my complaints about our product's hardware and database architecture. "OK," he said in exasperation, "if you don't like [proprietary platform], what platform do you want the product to run on?"

In imitation of a Qwest ad from that time, I said, "I want it to run on any operating system, on any database, from any provider." I then glanced at him to make sure he wasn't winding up to smack me in the head. "You asked."

What I was trying to get across is that fighting the platform battle with customers is a certain loser. If they are a Unix shop, and you are trying to sell them Linux, or OS400, it's a nearly impossible task. It's better, frankly, to cut your losses and find another prospect for which your product is a good architectural fit.

Why is that so? A new book helps sort it out. "IT Risk," by George Westerman of MIT's Sloan School and Richard Hunter of the Gartner Group, discusses how companies can and should manage risk within their information-technology infrastructures.

And one of Westerman and Hunter's key points is that a company's foundation architecture must be simple and standardized. Such an architecture can be more easily protected from disaster, can adapt more quickly to changes in the business, and can limit data access to authorized parties more easily than a hodgepodge of separate systems, platforms and applications.

Like it or not, when you are trying to sell a nonconforming software product into a company that has built a simple, standardized IT foundation, you are trying to force them to accept a hodgepodge. And they won't do it.

Product managers need to manage the lifecycle of their architectures as well as the lifecycle of their functionality. It can be painful and expensive, but not as expensive as a good product that loses its market due to an outdated architecture.

information technology, IT, books, risk, product management, reading list, books

I like the Kindle

...at least what I've seen of it. No, it doesn't look like Apple made it (perhaps not in itself a bad thing). But it's got lots of titles, easy ordering/buying/downloading, and an easy-to-read screen.

I also like that they bundled the network charges into the cost of a book.

I don't like... the name. It seems nobody does. Nor the purchase price--US$399. It's a lot of money for something that I can't guarantee I would use religiously. Paying for blogs is weird, never mind the small selection (you mean I can't read Shop Talk on my Kindle?). I would happily pay for single newspaper copies, though, especially when I'm traveling.

But what I like most is a portable, easily reloadable eBook. I think about that often, when I'm schlepping through an airport terminal with my backpack laden down with a laptop and two or three books. My shoulders ache just thinking about this.

I also think of every kid carrying a too-heavy backpack to school. Which is all of them.

So, something I can carry in my backpack, which holds hundreds of books, which I can reload anywhere (at least, most anywhere in the US), which I can read as easily as a printed book. That's a beautiful thing.

Now, Mr. Bezos. About that price tag...

(Read a summary of what other folks are saying about the Kindle here.)

(See a video demonstration of the Kindle here.)

(Kindle image courtesy of Amazon.com)

technology, gadgets, books

Greenwashing is a marketing worst practice

Following on to the posts from last week on using marketing in bad faith (here and here), today I read Joel Makower's excellent post on "Greenwashing" (a great turn of phrase)--the incomplete or untrue attribution of environmentally-friendly characteristics to products.

Joel assesses a report from TerraChoice Environmental Marketing, which analyzed marketing claims on behalf of green products. They identify six worst practices, such as "the sin of the hidden trade-off," which "suggest a product is 'green' based on a single environmental attribute (the recycled content of paper, for example) or an unreasonably narrow set of attributes without attention to other important, or perhaps more important, environmental issues." This neat trick was the most prevalent "sin," found in 57% of the claims studied.

Such misbehavior will only serve to heighten the public's cynicism toward all green claims, with the possible result that green content gets devalued, and therefore companies stop taking pains to create it.

environment, worst practice, marketing

More on using the Cynefin framework

If you found value in Dave Snowden's and Mary Boone's recent Harvard Business Review article (discussed in an earlier post), you should read Dave's post on "safe-fail probes"--it's sort of a second chapter to that article focusing on applying the Cynefin framework.

business development, complexity, decisionmaking, leadership, management, organizational behavior, sales process, sales, Harvard Business Review

A salesperson's lesson on growth

A number of years ago, I was in an internal training class with some of my colleagues. One guy in particular was a salesperson I had always thought of as being a bit shallow. Anyway, during a break in the class, I got into a discussion with him about the effect of Home Depot and moving commercial development out of city centers, putting Mom and Pop hardware stores out of business. And in the discussion he was, to my surprise, against a lot of that development. I was saying, you know, wasn't it a good thing that due to these superstores things could be cheaper and that people could buy more things? And I remember him saying in response: why do things need to be cheap, why do we need more things?

It really shocked me, because my assessment of him was way wrong. I had definitely not pegged him to be such a thoughtful person. I've remembered those words for more than 10 years and as I reflect on it now, his response and his thinking had a lot of the Buddhist in them.

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retail, growth, pricing, spoken post

Mistake Bank #12 - Don't forget about support!

What follows is a sample of a project I've been working on called the Mistake Bank. It combines narrative, learning from mistakes, video and web2.0 in an environment that companies can use to train new employees, create a corporate history, connect workers and mentors, and bring more humanity to the workplace. Email me at inquiry@caddellinsightgroup.com if you would like to know more about the Mistake Bank.



When John Caddell began his first job as a product manager, he inherited a new product that was being sold by a large partner. And once the first sale happened, he learned that having a support strategy is not optional.

mistakes, international, information technology, Mistake Bank, narrative, learning, marketing, distribution, software, web 2.0, product management, technical support

Another "marketing-for-ill" practice

Promoting your product based on an ingredient it doesn't actually possess.

Marketing for good--and for ill

I can't wait for the upcoming book by Harvard Business School marketing professor John Quelch (his blog is here) and Katherine Jocz called "Greater Good"--because I am fully expecting to disagree with it.

I read the abstract last month and have been stewing over it since then. Here it is in full:

Marketing has a greater purpose, and marketers, a higher calling, than simply selling more widgets, according to John Quelch and Katherine Jocz. In "Greater Good", the authors contend that marketing performs an essential societal function--and does so democratically. They maintain that people would benefit if the realms of politics and marketing were informed by one another's best principles and practices. Quelch and Jocz lay out the six fundamental characteristics that marketing and democracy share: (1) exchange of value, such as goods, services, and promises, (2) consumption of goods and services, (3) choice in all decisions, (4) free flow of information, (5) active engagement of a majority of individuals, and (6) inclusion of as many people as possible. Without these six traits, both marketing and democracy would fail, and with them, society. Drawing on current and historical examples from economies around the world, this landmark work illuminates marketing's critical role in the development, growth, and governance of societies. It reveals how good marketing practices improve the political process and--in turn--the practice of democracy itself.

The ennobling of marketing--connecting it with vital societal interests--got my attention. I am a marketing professional, and I like to feel good about myself and my profession, and as such I liked the book's idea--for about five minutes, after which it lost its flavor faster than a free after-dinner mint.

What lingered was this thought: there's an awful lot of bad marketing out there (not ineffective marketing, but "marketing-for-ill"), and I'd wonder whether Quelch and Jocz would do more for society by writing about that.

Here are some fundamental principles of marketing-for-ill that I bet won't appear in Quelch's and Jocz's book: (1) bombard people with buy messages for commodity products such as credit cards, (2) use selective language to play up one's product while disparaging the competitors'--as with any Oracle ad, (3) craft deceptive messages to get people to buy something that is not in their best interests--exhibit A: low-introductory rate mortgages, (4) create multilevel marketing networks to make revenues primarily via self-consumption of the networks, (5) use complex pricing schemes to make it difficult to assess total costs before buying--e.g., "my cellphone plan."

It's unfair, of course, to judge the book without reading it. So I promise I'll read it when it comes out, and I'm pretty sure it will be a good book and unworthy of my scorn.

At minimum, it has caused me to confront a lot of what I don't like about my profession, and reflect on what I can do not to promote those ideas.

democracy, marketing, corporate social responsibility, reading list

With the Wii, the controller is the key

It's a good day for the Caddell parents. Our #1 Christmas task was locating and purchasing a Nintendo Wii for our 6- and 4-year-old boys. I don't know how it is where you live, but here stores receive small shipments of Wiis each week and sell them out as soon as they get them.

So today my wife got an email from GameStop letting us know they got some Wiis in. So I dutifully zipped over to the mall (in Harrisburg, most things are pretty close to each other, which is a beautiful thing at a time like this).

I got the last Wii in stock. So, at least in my own mind, I am a hero for the day. And the kid in me can't wait till the 25th. (I unwittingly spoiled my wife's Christmas gift for me--Tiger Woods PGA Tour 08--by buying my own copy from GameStop. Oops.)

But why do I want to play the Wii, when I couldn't be bothered with a Playstation 3 or Xbox 360?

It's the controller. Which is no surprise to anyone--it was Nintendo's central innovation for the Wii. But why is the controller so appealing to non-gamers?

One clue was watching my son play one of the standard consoles. Depending on the game, the buttons on the controller have completely different meanings ("If you want to speed up, press the 'A' button"). There's a joystick, and the four-way direction thing-y. And those colored buttons. What do they each do?

The learning curve for any new game is daunting...too daunting for me to bother trying. I don't have the patience for getting blasted into oblivion a hundred times before figuring out how to enable my shields.

PC games are no better. A year ago I signed up for RuneScape and spent an hour trying to walk out of the first room I plopped into--before I gave up.

But the Wii controller is more intuitive. It's one level of abstraction closer to real movement and action. There's much less need to translate what you want to do into controller language.

As such, the Wii will probably never be cool to hardcore gamers. But I don't care; if you're looking for me on December 26th, I'll be playing Pebble Beach with Tiger.

games innovation technology videogames Nintendo Wii

If you want to find innovation, don't look for market share

Here's a blanket generalization: market-share leaders don't innovate.

Exhibit A is the cellphone industry. The real innovation in the US mobile market is coming from T-Mobile, the fourth-largest operator. We discussed its combination WiFi/cellular package in an earlier post, and today the Wall Street Journal wrote that T-Mobile is the most enthusiastic operator partner of the Google-led Android alliance, seeing in it the opportunity to develop a distinctive user experience. And to help create innovative and better integrated services, T-Mobile is getting more involved in its handset manufacturers' design process.

One question is, why can't leaders be more innovative? The most straightforward explanation gets to the heart of the leader's paradox. Feeling they have more to lose causes leaders to become more and more conservative, settling for incremental upgrades and not seeing (or not valuing) the new and bold.

Fear of cannibalization also inhibits innovative thinking at market-share leaders. The question "What's this going to do to all the people we've sold the old product to?" has probably doomed thousands of worthy innovation efforts.

While upstarts and companies who are trying to catch up are freer to act.

The leader who figures out how to instill this type of thinking in a market-leading company should win the Nobel Prize for Management.

innovation, mobile, Wall Street Journal, wireless, handsets, alliances

Luxury brand names - extensible everywhere?

For as long as there have been luxury brands, they have been trying to expand from their original niche to related - or unrelated - product areas. Remember Pierre Cardin cologne? It was a mainstay of TJ Maxx, a US discount store, back in the 1980's.

The owners of today's luxury brands will tell you they won't repeat the mistakes of the past, where licensing mania resulted in the above-mentioned cologne and plenty of other failed products. Yet as described in this Wall Street Journal article, "Like Our Sunglasses? Try Our Vodka!" by Christina Binkley (link - $$), they're at it again. Roberto Cavalli Vodka, Ferragamo watches (no, you don't wear them on your ankle), Bulgari hotels. There's no limit to what designers and their bankers will put their name on.

The designer-store trend helps to urge fashion companies to diversify. How else to fill up all those shelves and give people the opportunity to indulge in accessories to go with the outfit?

This trend, too, will peter out. The Bulgari hotels will become Hiltons, Ferragamo watches will take their rightful place on the shelves of TJ Maxx. But as long as it lasts, designers can luxuriate in seeing their names plastered over all kinds of random goods. And who wouldn't like to see her name on a fine bottle of premium vodka?

Friday bonus quiz: Which of the following items are actual designer (or designer-licensed) goods?

1. Versace dog collar
2. Bill Blass Lincoln Continental
   
3. Fendi litter box
4. Burberry dog collar
5. Louis Vuitton dog collar
6. John Varvatos aftershave
7. Marc Jacobs pop-up tent
8. Gucci dog collar
9. Armani keychain

(answer: all but 1, 3, 7.)

(Photo: Marc Jacobs canvas backpack via fabsugar.com)

(Disclosure: I have just learned that the author of the WSJ article, Ms. Binkley, formerly wrote for the Wilkes-Barre Times-Leader. My wife grew up in Wilkes-Barre, PA.)

fashion, licensing, marketing, retail, Wall Street Journal