Facebook, smacked down again, invites customer input

Facebook always does the right thing by their customers... once their customers have beaten them up for a wrong first step. A year and a half ago they stirred up the wrath of their community by proposing an ad-targeting system leveraging its users' profile data, then backed down.

Now they've done it again. Facebook changed their terms of service, igniting another storm of outrage on blogs, Twitter and, yes, Facebook. They relented, returning to their prior terms of service, and yesterday announced that they will be seeking user input on community questions such as terms of service, and be more transparent, including this statement:

Transparent Process: “Facebook should publicly make available information about its purpose, plans, policies, and operations. Facebook should have a town hall process of notice and comment and a system of voting to encourage input and discourse on amendments to these Principles or to the Rights and Responsibilities.”

It's easy to make fun of Facebook for their public embarrassments, but they do get the message their users are sending. Furthermore, they are pioneers in engaging with their users. There is no template they can follow. Facebook's users, because they give personal and sensitive information to the service, is very sensitive to its use, and the web2.0 nature of Facebook means that its users are comfortable using web2.0 means to communicate. Quiet they are not.

It will be fascinating to see how more traditional companies deal with assertive user bases. As consumers find their voices on line (and efforts like VRM give users powerful tools to manage and communicate with their vendors), we'll be reading more stories like this one. Will other companies learn from Facebook's painful lessons?

Related post:
Zuckerberg learns

From "Think Again," a book about decisionmaking gone wrong - Marc's mistake story

"Think Again" is a great new business book in which authors Sydney Finkelstein of Dartmouth University and Jo Whitehead and Andrew Campbell of Ashbridge Business School describe research in cognitive science and behavioral economics to explain how the decisionmaking process goes awry and, even more importantly, how our minds obscure the mistakes we make and keep us from understanding the weaknesses in our decision processes. [The authors also have a website for the book, including pointers to some of the underlying research and other goodies.]

The book is full of great storytelling, and this one in particular, about an executive named Marc, seemed very appropriate for the Mistake Bank:

Marc was the managing director of the French subsidiary of an international manufacturer of packaging machinery. He was considering whether or not to acquire a company that had a near-monopoly on manufacturing a specialized type of food packaging machine. While the company had a strong position in the market, there were several warning signs that it was a risky investment. The business was highly dependent on sales to one large meat processing company. Because the machinery was a form of capital investment, sales tended to be highly cyclical. The management team had recently lost some of its more talented designers and marketers, and performance was flagging. The current owners of the business were keen to sell.

These risks were particularly an issue because Marc had committed to his head office that he would deliver relatively stable performance. The previous year, Marc had personally persuaded the head office to provide additional investment to his subsidiary for low-risk acquisitions, and so his reputation was at stake.

As the transaction progressed, some members of Marc's supervisory board voiced their concerns about the proposed acquisition. Despte this, Marc went ahead. A few months later, following the discovery of bovine spongiform encephalopathy (BSE), or mad cow disease, in French cattle, the meat-processing customer announced that it was putting discretionary capital expenditure, including the packaging machines manufactured by Marc's company, on hold. The management team was unable to deal with the dramatic drop-off in demand. Profits plunged into the red. Marc's superiors were shocked, and Marc's career received a large black mark.

Marc described why he thought he had made a flawed decision. "I was under pressure to do this deal for my own interest. If I went ahead, then the costs incurred in auditing and due diligence of the company would be capitalized and added to the cost of the investment. If I backed out, then they would all be charged to my office as an expense. Because we had been pursuing this company for a while, those costs were quite significant--and I guess I was influenced by that. I had an annual target to hit--and the charge-off would occur at the end of the financial year, leaving me no time to find a way to avoid a big loss. Of course, in the end, doing a bad deal was much worse for my position. I guess self-interest clouded my judgment."

Reprinted with permission from Harvard Business Press. Copyright 2008 Sydney Finkelstein, Jo Whitehead, and Andrew Campbell. All Rights Reserved.

Customers are talking - Apple hangs up on the wrong customer

It's getting harder and harder to get telephone support, especially with online products, but there are some times you need to talk to a person--you can't find what you're looking for in the forum, for example, or your question doesn't fit neatly into a category.

Cluetrain Manifesto co-author Doc Searls called Apple to get support for MobileMe (a paid service, by the way), and a synthesized voice summarily directed him to the website. Then, "click."

The irony is that Searls heads a grass-roots effort called VRM, Vendor Relationship Management. Requiring adequate support for paying customers seems like a basic tenet of VRM.

So Searls blogged about it, including a recording of the Apple call. Check it out here.

Learn from your predecessors--the only way, if you're a CEO or President

Imagine that you have a job that's so exclusive that not only could you not find a book teaching you how to do it, you'd be hard-pressed to find anyone in your town, or state, who could give you much help.

The job of corporate CEO is like that. So is President of the United States. In each of these positions, learning on the fly seems costly. Is there an alternative?

Yes there is. If only it were used more often.

This question was taken up in two recent articles. In the January Harvard Business Review, Thomas Friel and Robert Duboff discuss "The Last Act of a Great CEO." The last act being an outgoing CEO's sharing knowledge, experience, and perspectives on the job with her successor.

And an opinion piece by Sheryl Gay Stolberg in yesterday's New York Times remarked on the rarity of gatherings like Pres-elect Obama's recent lunch with four other living presidents ("The Very Elite Club that Never Meets").

Friel and Duboff write this about new CEOs learning from their predecessors:

It is difficult to imagine a richer source of information and advice for a new CEO, even on a purely personal level. Being successful as the chief executive of a major enterprise is hardly a straightforward matter; the right combination of style, skill, and focus can vary dramatically depending on the context. One CEO we interviewed put it simply: “You can’t really understand this position until you’re in it.” At the very least, the departing executive has a unique and relevant point of view on the dynamics of the board of directors and the executive team. Often he or she has the most strategic and current understanding of the issues the company faces.

Stolberg's article hits the same theme:

“One thing historians have talked about for years is that there should be a better way for sitting presidents to use the experience of former presidents, and it doesn’t happen enough,” said the presidential historian Michael Beschloss. “The reasons are varied: sometimes personal antagonisms, shyness, the feeling that the former president is too removed from today’s politics to know very much. The result is that there is a reservoir of wisdom and experience that is not relied upon.”

I have an idea that might help. Or, rather, my wife Maura had the idea and she let me borrow it. Companies, and the executive branch, need to create narrative repositories like The Mistake Bank. A repository would be a place for presidents or CEOs to recount events. (Especially mistakes, since we learn very well from mistakes.) and what they learned from them. The repository would be available only to successors. New CEOs and presidents, or experienced ones, could dip into the repository when they had a question or issue they wanted some perspective on.

I've done this, and I know how to set them up, and how to make use of them. CEOs, Pres.-elect Obama, it's time to put this into action. You know where to reach me.

"Public relations firm took too long to change to home-based business"

From The Mistake Bank:

Reporter Marcia Pledger of The Cleveland Plain Dealer has been collecting and publishing great small-business mistake stories for a while. Here's a nice one about the cost of worrying too much about what others' perceptions might be:

A manufacturing company told me that if I started a public relations firm, I had its business. My next move was to find a location. Relationships are one thing, but I needed credibility for prospects.

Starting a business from my home 22 years ago was not even a thought. Back then, home-based businesses were not considered "real" businesses, so I leased an office....

read the rest of the story at the Plain Dealer site here.

Mistake Bank, mistakes, narrative, location, perception, entrepreneurism

From The Mistake Bank: Sue Pera on the downside of expansion

From The Mistake Bank:

This is the first of a series of interviews with businesspeople about mistakes they've made in their careers. If you'd like to be part of this series, email me at john (at) caddellinsightgroup (dot) com.


Find more videos like this on The Mistake Bank



Sue Pera is the owner of the Cornerstone Coffeehouse in Camp Hill, PA. Visit them on the web at http://thecornerstonecoffeehouse.com. (Disclosure: I usually hang out here on Friday mornings, when the cleaners come to do my office. It's a great place; if you happen to find yourself in Camp Hill, you must stop by.)

Tags:
Mistake Bank, mistakes, narrative, customer relationships, expansion, growth, entrepreneurism

NOMO Concert: a plan too complex to succeed

From The Mistake Bank:













(click on comic to enlarge)

See the original on Bitstrips here.

Tags:
comics, mistakes, mistake bank, narrative, contingency planning

From The Mistake Bank: Surprised by a large customer defection

From The Mistake Bank:

The following story is excerpted from "The Knack: How Street-Smart Entrepreneurs Learn To Handle Whatever Comes Up," by Norm Brodsky and Bo Burlingham. This is a terrific book with great storytelling throughout. Brodsky uses so many examples from his storage company, CitiStorage, that by the end of the book you feel like you know that industry. To learn more about the book, visit the web site. I highly recommend it.

I still remember the moment, many years ago, when I found out we’d lost one of our biggest customers…. One of my salesmen called me in my car and told me we’d just received a fax from the customer, a major law firm, announcing its intention to move its boxes out of our facility when the contract expired three months later.

Now you have to understand that, in this business, moving your boxes is a big deal.... So it’s a real loud message when a customer leaves, and this one came completely out of the blue. I was stunned. “What are you talking about?” I said. “Man, how could we lose this account? What happened?”

The salesman didn’t have an answer, and we couldn’t get one from the customer. The people in charge at the law firm wouldn’t see us or talk to us on the telephone. Our urgent messages brought perfunctory replies: “The decision has been made, and it is final.”

Obviously, we had screwed up. The guy who had closed the account had left us five years before, and we hadn’t stayed as close to the customer as we should have been. A week or so after receiving the fax, I came up with a proposal that finally got us a meeting with the firm’s managing partner—to no avail. The situation was too far gone. We could offer good financial terms, but we couldn’t fix problems that had been festering for years. Our competitor matched the terms and got the account.

So I called my managers and salespeople together and said, “What did we learn from this? What do we have to do differently in the future?” The real lesson, I knew, was not that we had made mistakes. You always make mistakes. We failed because we’d waited too long to find out about them. We decided that, from then on, we’d go to each customer eighteen months before the end of the contract and offer to negotiate a new one. If the customer hesitated, we’d know right away that we had a problem—while there was still time to fix it.

As soon as we began implementing the new policy, we made a very important discovery. We had unhappy customers and didn’t know it. One customer was upset about our system for providing information; we fixed it. Another customer felt it deserved a lower rate because its volume had increased dramatically; the customer was right, and we made amends. A third customer didn’t like a particular aspect of our inventory system; we changed it. A fourth customer was miffed that we hadn’t been sending regular monthly reports; we started sending them.

So, in four months with the new policy, we made four improvements, pleased four customers, and locked up four accounts, and all these benefits came from one failure. In the long run, that failure proved to be one of the best things that ever happened to the company.

(c) 2008 Norm Brodsky and Bo Burlingham. Used by permission

Tags:
Mistake Bank, mistakes, narrative, customer relationships, defection, renewal, entrepreneurism

A Mistake-Bank-perfect epigraph

I just unwrapped "Einstein's Mistakes" and this appears before the Preface:

Errors are the portals of discovery.
James Joyce, Ulysses

Pilots learning by studying mistakes

Dave Stein took a break from writing about his core subject, building sales effectiveness, to discuss how pilots study the circumstances around crashes to learn what situations to be careful of. This kind of learning from mistakes can save one's life.

Dave is an experienced pilot. I don't think I knew that before reading the post. I like when people inject their personal passions into their blogs. I don't mean navel-gazing, but unveiling parts of their life experience that aren't visible in their professional profiles.

learning, mistakes, aviation

Zuckerberg learns

I didn't like much of what I read about Mark Zuckerberg, the founder of Facebook. Seemed like a bratty kid, ego on overdrive. The questions about perhaps appropriating the idea from Harvard classmates cast a shadow to me.

But I am impressed with what I'm reading about him now. Today in The New York Times, Brad Stone profiles some new Facebook integration tools, and in the article some quotes from Zuckerberg that are out of step with his old persona, to say the least.

Like this:

“We paid a lot of attention to making sure that people have complete control over what is in their feed,” he said. “We learned from last time.”

And this:

“As happy as I am with the growth of the ecosystem, there are a lot of mistakes we made,” Mr. Zuckerberg said. “I think we can all agree that we don’t want an ecosystem full of applications that are just trying to spread themselves.”

To that end, Facebook announced a series of new incentives for developers to write what it characterized as “meaningful” tools for the service. It said it would pick certain applications that meet a set of Facebook principles to be part of a new “Great Apps” program.

Others are recognizing Facebook's progress:

Blake Commagere, the developer who created zombie and vampire games for a variety of social networks, said Facebook was simply learning as it goes, like everyone else in an unprecedented Web experiment.

“It’s been a learning process for developers and for Facebook,” he said. “They are breaking new ground, but these guys are sharp. They are going to continue to improve it.”

So, it's a much humbler and seemingly wiser Zuckerberg. That can only bode well for the future of the platform and the company.

Tags:
entrepreneurism, learning, mistakes, New York Times

From The Mistake Bank: a comic mistake story (it's funny, too)

Please click the picture to view in a larger size.

There are lots of ways to tell a story. One perhaps underappreciated way is via comics--a narrative combination of words and drawings.

Comics artist Josh Neufeld contributed to the Mistake Bank the great story pictured above, "Past Perfect Progressive in Prague." Perhaps you'll identify with the awkwardness of adapting to a new place and culture.

Josh's most recent work is the comic book "A.D."--taking on perhaps the greatest mistake of our time, Hurricane Katrina and its aftermath. "A.D." follows the stories of six actual New Orleans residents from different neighborhoods and walks of life, through the calamity and thereafter. A powerful narrative containing real dialogue and settings, with hyperlinks to supporting documentation, it's truly an epic work. "A.D." is accessible on the SMITH Magazine site, and will be forthcoming as a printed book in summer 2009, the fourth anniversary of the hurricane.

Related posts:
"Understanding Comics"

Tags:
Mistake Bank, mistakes, comix, travel, culture

How to treat prospects who visit you

From The Mistake Bank:

When prospects from Hong Kong visited us in the US, we did our normal thing and thought everything went fine. Soon thereafter we had all but lost the deal. Then we visited them, and learned another model for entertaining visitors.


Find more videos like this on The Mistake Bank


Tags:
Mistake Bank, narrative, learning, errors, failure, mistakes, sales, video, hospitality

Don't try to fail, just try

It's been worrying me a bit, with all my emphasis on learning from mistakes and removing the stigma from making mistakes, that I might be encouraging people to try to make mistakes.

Although making a deliberate mistake can be a very useful exercise and lead a company to discover insights it couldn't find out otherwise, it shouldn't be the focus of your approach.

The point is to try to succeed lots of different ways, make small bets, try "safe-fail" experiments. Follow those that appear to lead somewhere. Ditch the remainder quickly.

More and more people are thinking this way. My evidence? Today's Wall Street Journal Business Insight section, which talks about experimentation and learning from failure throughout. One example is "In Search of Growth Leaders," by Sean Carr, Jeanne Liedtka and others which asserts that managers who can foster growth have different mindsets than those who can't. [A nice graphic in the article compares people who see life as a journey of learning--i.e., potential growth leaders--to those who see it as a test--similar to the work of Carol Dweck referenced by Amy Edmondson in HBR, and discussed in a recent Mistake Bank post.]

There's also "Oops! Accidents lead to more innovations. So how do you create more accidents?" by Robert Austin, Lee Devin and Erin Sullivan--which says to "explore lots of approaches" and "make accidents cheaper" which is safe-fail by other words.

And "Follow the Leaders," by Craig Pearce, which encourages allowing team leadership to shift from member to member based on the needs of a particular part of a project, echoing ideas from the recent HBR article on management lessons from multiplayer online games.

If you do make a mistake, don't throw it away. Learn from it, and put it in the Mistake Bank. The public one, or one of your own.

Related posts:
Multiplayer games demonstrate a new model for leadership
Amy Edmondson in July/Aug HBR
To progress in complex environments, experiment
Make some mistakes, and profit from it

Tags:

Mistake Bank, experimentation, learning, errors, failure, mistakes, innovation, leadership, Wall Street Journal

Roughnecks learn to learn from mistakes

"Unmasking Manly Men" in the July-August Harvard Business Review Forethought section had a grabby title and a thesis puncturing a resilient stereotype: one of the roughest, most macho, most dangerous industries in the world--offshore oil drilling--has developed a new work culture where workers support each other, where they are open and candid with their feelings, and...my favorite topic...where they admit mistakes and seek to learn from them.

The piece, written by professors Robin Ely of Harvard Business School and Debra Meyerson of Stanford University states that the culture change was led from above, primarily as a way to improve safety and reduce accidents. And that worked--on-the-job accidents declined 84% over a fifteen-year period. Efficiency and productivity improved as well.

This culture of candor had at least on beneficial side effect--the company developed a new assessment of leadership potential based on ability to listen and learn rather than excellence as a roughneck. [A lesson to the many many professions out there that still select new leaders based on skill in the old job vs. capability for the new one.]

I'm learning that developing a culture of destigmatizing mistakes, discussing them and learning from them makes the whole organization a lot more human, caring and fun. Oh, yeah, innovative, too.

learning, mistakes, culture, Harvard Business Review

Multiplayer games lessons #2 - embrace of failure and iterative learning

I posted yesterday on the recent HBR article "Leadership's Online Labs," in which the authors discuss the results of a study of high-performing users of Massively Multiplayer Online Role-Playing Games (MMORPGs), like World of Warcraft. In these games, participants worldwide take on roles and participate in quests and adventures--requiring the players to act in concert to achieve their objectives, planning together and using their varied capabilities to, for example, storm and take control of a castle against determined adversaries.

The article focuses on how the lessons learned by the MMORPG standouts could be applied to business. One passage in the article was very relevant to the Mistake Bank concept:

Trial and error play a big role in accomplishing game tasks. Failure, instead of being viewed as a career killer, is accepted as a frequent and necessary antecedent to success.

In one incident that we recorded from EverQuest, seven guild members prepared for a brand-new quest that required them to get their team across a large lake protected by a gruesome and hostile creature. Although they had formulated a strategy based on information gathered in advance, everyone seemed comfortable with the high likelihood of failure, at least initially. After a first attempt, in which the whole team nearly drowned and was forced to retreat, members quickly began plotting a new strategy in the spirit of a fundamental gamer maxim (one not heard very often in business): “Let’s try that again.”...

Frequent risk taking allows players to practice the art of weighing odds calmly in uncertain environments. Confronting risk routinely and with a level head will be an important leadership skill as the real-world business environment becomes more uncertain and as success comes to depend more on innovation than on execution. Organizations can help prepare leaders by fostering a culture in which failure is tolerated. They can expose leaders to risk by mimicking the structure of games, breaking down big challenges into small projects. Failure, after all, is clearly more palatable for the individual and more affordable for the organization when it happens at the project level rather than on a larger scale.

"Failure is a frequent and necessary antecedent to success." These few words illustrate one of the major systemic failings of companies today: instead of encouraging and learning from failures and mistakes at the project and small-group level, and adjusting course or changing behavior as necessary, they repress failure, refuse to acknowledge it, and don't learn. Resulting, of course, in a larger-scale catastrophic failure that everyone could see coming yet no one could acknowledge or do anything about.

Related Posts:
Choreographer Twyla Tharp on the usefulness of failure
Announcing The Mistake Bank
Mistake Bank #12 - Don't Forget About Support!
Great Innovation Requires...Acceptance of Mistakes
Learning From Mistakes, Part 72


Tags:
Mistake Bank, mistakes, failure, learning, uncertainty, decisionmaking, Harvard Business Review

Mistake Bank update

The Mistake Bank is three weeks old tomorrow. And like any infant that age, it's still hard to know what it will look like when it grows up. Yet there have been hundreds of visits, several dozen members joined, and nearly that many stories shared.

Many people I've talked to are intrigued, but a bit wary. What if I don't have any stories to share?

Let me make it clear, then. With the Mistake Bank, lurkers are welcome. Please sign up and visit often. You never know what you'll find. [Perhaps an embarrassing moment or two.]

If you want to share a story, but don't know how, take a look at what's already there to use as a model. Or do it your own way.

[If you happen to be at Wireless 2008 next week, and want to share a story, email me at inquiry (at) caddellinsightgroup (dot) com. I'll be there with my new Flip video camera and would be delighted to record it for you.]

The experiences, discussions and interactions I've had since the Mistake Bank went live have only reinforced my belief that we can build it into a useful, fun resource for all kinds of people.

Won't you consider joining?

mistakes, Mistake Bank, learning, social networking

More learning from mistakes

From the New York Times, Sunday March 16, an interview with 1-800-Flowers.com CEO James McCann:

In 1986 I bought the assets of a failed floral company in Texas called 800-Flowers and took that name. I thought I was smarter than everyone else and neglected to hire lawyers and bankers to do due diligence. I unknowingly signed for all liabilities, which I later learned was a debt of $7 million.

People advised me to file for bankruptcy. Then my grandmother took me aside and said: “This bankruptcy thing? We don’t do that. Find another way.” I worked like an animal to get out of that hole....

If you look at highly successful people, they make the same number of mistakes as others, but they recover quickly. They don’t sit around moaning about what they’ve done wrong.

A more complete retelling of this same mistake can be found in this article in Inc Magazine.

mistakes, Mistake Bank, learning, due diligence, acquisitions, lawyers, bankers

Scott Berkun on learning from mistakes

While working on The Mistake Bank, I found this essay by Scott Berkun, author of books like "The Myths of Innovation." Upon reading it, I was struck by how well-articulated his arguments are and how closely his thinking relates to what we're trying to do with The Mistake Bank.

It starts off like this:

You can only learn from a mistake after you admit you’ve made it. As soon as you start blaming other people (or the universe itself) you distance yourself from any possible lesson. But if you courageously stand up and honestly say “This is my mistake and I am responsible” the possibilities for learning will move towards you. Admission of a mistake, even if only privately to yourself, makes learning possible by moving the focus away from blame assignment and towards understanding. Wise people admit their mistakes easily. They know progress accelerates when they do.

And there's lots more. The section entitled "How to Handle Complex Mistakes" is particularly relevant--as is his discussion on the importance of keeping a sense of humor about yourself. Please give Scott's essay a read, and please visit The Mistake Bank to see some stories and create some yourself!

Related:
Announcing The Mistake Bank
Mistake Bank #12 - Don't Forget About Support!
Great Innovation Requires...Acceptance of Mistakes
Learning From Mistakes, Part 72

mistakes, Mistake Bank, learning, complexity

Announcing the Mistake Bank--please join us

"From mistakes we learn; from successes, not so much." Meet the Robinsons.

The Mistake Bank is a social network for "war stories," or brief narratives of mistakes that people have made. Members share videos or blog posts recounting mistakes that they have made in their life, and discuss other members' contributions. All are welcome. Click here to visit the Mistake Bank, or here if you're ready to join.