Guest post by Denise Lee Yohn - The Economy Made Us Do It

I'm delighted to present today a guest post by Denise Lee Yohn. This is the first time we've done a guest post. I'm curious about people's thoughts on this--if you have an opinion, leave it in the comments. regards, John

It seems today's tough economic climate has become the ultimate scapegoat for pretty much everything.

This past week's New York Times Sunday Styles section included a piece describing the cleverness with which people have used the economy to get out of social obligations. From firing the nanny to avoiding a dreaded family reunion, the recession, it seems, provides a convenient excuse for folks who can't bring themselves to deliver an honest, yet unpleasant message.

And Business Week just ran an article about how companies are trying to get out of contracts by arguing that the economic crisis should void legal obligations. Although the troubled economy isn't technically addressed by force majeure clauses, companies in tight situations aren't letting technicalities stop them from trying to pull one over their creditors and business partners.

Such behavior seemed somewhat comical to me until I found myself on the receiving end of a similar excuse yesterday. It came from a service rep who relayed a change in the company's policy by saying, “We've been hit hard by the economy so we had to cut some of our services and that was one of them.” The momentary sympathy I felt for the company was quickly replaced by indignation against it for trying to excuse the change by blaming the recession. And my questioning of the wisdom of such a tack soon followed.

Now, I understand that economic pressures have forced companies to change the way they do business. They're cutting back and by definition that involves tough decisions. I get that. What I find curious is executing the changes in a way that smacks of a“victim mentality.” Why would any business want to give the impression they’re helpless and desperate?! Companies weaken their brand perceptions with a thoughtless --sorry, it's the economy -- excuse.

If companies want to retain any measure of respect and trust with their customers (respect and trust being key drivers of brand equity), they should assume responsibility for the decisions they make and use these tough economic times as an opportunity to reinforce their relationships with customers. A message along the lines of the following would be a good first step in taking a proactive, brand-building stance: “Please accept our sincere apologies for making a change that we know adversely affects you. We are diligently working on ways to improve and will resume the suspended service as soon as possible.”

Communicating this type of message -- and delivering a customer experience consistent with it -- has the power to transform brand perceptions. Instead of being perceived as a weak player that’s relinquished control of its destiny, the business is portrayed as a brand with the integrity and customer commitment to come out of this economic storm even stronger.

With excuses to be found everywhere these days, I certainly hope we're not seeing the beginning of a trend that makes adopting an excuse culture”-- an acceptable way companies do business --– but I fear it may be. After all there's an excuse, it seems, for everything from criminal acts to indiscretions by politicians. But business leaders should realize excuses erode brand credibility and equity.

Simply put, excuses are bad for business.

Denise Lee Yohn is an independent brand as business^TM consulting partner who inspires and teaches companies how to operationalize their brands to grow their businesses. World-class brands including Sony, Frito-Lay, Burger King, and Nautica have called on Denise to maximize brand impact. She can be reached through her blog, brand as business bites^TM.

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.

Shop Talk relocating! Everything must go!

As I mentioned last week, Shop Talk is moving to a new location at the end of the month.

In the meantime, we've sold our entire stock to a liquidator, so expect deep discounts, especially on 2006 and 2007 posts, which have been languishing in the warehouse for quite some time.

Please head over to our new home and stay awhile, and if you'd like to update your RSS reader, here's the feed for the new place.

John

Frontiers of innovation - Netflix demolishes own business model

We've been Netflix customers for several years, and generally like the service. But we're like a lot of their busy customers. We don't turn DVDs over fast enough and end up having months go by with the same two movies sitting on the television.

But last week we bought the Roku box and now use it to view Netflix movies streaming over the web on our flat-screen TV. It's cool, easy, the quality is good and it's a great antidote for our laziness with the movies. Plus, you don't have to wait for the DVD to arrive in the post.

It's not perfect--there aren't enough titles yet. But it's a product that will only get better and more useful. And put Netflix in place as a contender to lead the integration of TV and the internet.

[Aside: I drove through Cerritos, California, today. In 1987 GTE, my former employer, trialed interactive television in Cerritos. Needless to say, they were too early--bandwidth issues, lack of content, and, frankly, the lack of a powerful vision of sharing and openness a la Tim Berners-Lee, doomed the project.]

What's so impressive to me about this is that Netflix is investing in technology and partnerships expressly designed to make their old business model obsolete. When I think about how much they have spent, in dollars and time and thought, on the sending-videos-through the mail model, I wonder how they were able to make the leap to say, "We have this process optimized, but it's not the future. Time to build a new model"--meaning internet streaming.

There's a word for this kind of behavior, and it's not a nice word: cannibalization.

One of the most repugnant terms in the language--referring to one of the greatest human taboos--is used when a company's new products take sales away from its older products. Perhaps this helps explain why companies go to such great lengths--even imperiling their long-term success--to avoid it.

The problem is, the marketplace is a bit like the jungle. If you don't eat your own, someone will eat them for you. And this has happened again and again. One example: GM's abandonment of the EV1 electric car just a few years before Toyota introduced the Prius. To survive, companies will have to get rid of that taboo against cannibalization and act more like Netflix.

[Another aside. I keep wondering if the Kindle is a similar eating-your-own innovation. But something tells me Bezos always knew he was going to get deep into distribution of electronic content, even back when he was just selling books.]

I have a suggestion for marketers. If you want to get approval to introduce a better product, instead of referring to "cannibalization," call it "upselling."

(Photo: crushed EV1s courtesy of EcoBlog)

Customers are talking: is a customer-service dialogue a story?

Some of my work recently has been applying narrative-sensemaking techniques to customer service dialogues (typically recorded phone calls), which is a fancy way of saying helping companies find patterns in what customers are saying about their products and services, and to use these patterns to drive changes that will help them sell more products and/or make their existing customers more satisfied.

This is a little different from the more traditional approach of eliciting stories via interviews, anecdote circles or web forms. In those circumstances, carefully-crafted questions help generate stories ("this happened, then this, and then this"). Customer-service calls are not elicited--they are spontaneous expressions--and don't follow the story format. They are simply two people talking.

So a question is, I guess, can you get useful stories out of mere dialogue?

In thinking about this question, I've been reflecting on the novels of William Gaddis, an American writer who published only a handful of books from the 1950's to the 1990's. I've read two of them, "JR" and "A Frolic of His Own," and both have barely any exposition at all. 90+% of the text is dialogue, barely puncutated, overlapping, and often confusing.

"JR" is a very forward-looking book about a junior-high-school student who speculates his way into a multi-million dollar fortune (on paper). Given that it takes place in the mid-70's, JR does his trading via the payphone in the school hallway. Today, he'd be on TD Ameritrade.

"A Frolic of His Own," written in the 1990's, takes issue with the (again very present-day) issues of litigiousness and intellectual property. In addition to dialogue, hilariously-deadpan legal briefs help move the story along.

Reading Gaddis' books is a lot like listening to those customer service calls. A bit disorienting or hard to understand, often touching, sometimes funny. Always humanizing. And always stories.

A music affinity group emerges on Twitter

One of the most fun things about messing around with Twitter is to see interesting things emerge. It's such a general tool that it's a lot like those college greens that architects leave without pathways, allowing students to develop their own patterns over time.

I've recently started seeing the emergence of a music affinity group on Twitter (one of many, probably). It occurred to me this is happening yesterday, when I got a follow from @peteyorn, a musician that I like but didn't even know was on Twitter.

How he found me, I don't know (perhaps Mr. Tweet does). Maybe it's my connection with @francisten from West Indian Girl, or @kmueller62 of WXPN (or even @fotteson, a local bass player). Maybe it's that I write about music a fair amount (including live Tweeting the My Morning Jacket New Year's Eve concert or my musical crush on NOMO).

At any rate, I've gotten follows now from @madalynsklar, @talkmusicnow and @sxsw. You can see the pattern emerging. And I like it. I want to know what musicians and music fans are tweeting about. I'll learn about new music & perhaps see a bit of the faces behind the records. It'll be fun to see how this group evolves over time. (And if you're a musician or music lover, give us a follow at @jmcaddell and I'll follow back. You can join the conversation then.)

Just another way @twitter is changing how we interact and learn.

Creative Destruction? #3

This series of posts began in September when I photographed a couple of recently-vacated retail spaces. I've returned a couple of times since, most recently this week, to see how/if reuse of the sites is progressing. As you'll see, not much change yet. Here's Joseph Schumpeter's famous "creative destruction" quote from Capitalism, Socialism and Democracy:

The opening up of new markets, foreign or domestic, and the organizational development from the craft shop and factory to such concerns as U.S. Steel illustrate the same process of industrial mutation–if I may use that biological term–that incessantly revolutionizes the economic structure from within, incessantly destroying the old one, incessantly creating a new one. This process of Creative Destruction is the essential fact about capitalism. It is what capitalism consists in and what every capitalist concern has got to live in. . . .

32nd and Market Streets, Camp Hill, PA, 3 Feb 2009

There have been recent newspaper reports that there will be a Rite Aid drugstore built on the above site. And there is a construction sign posted out front (not pictured).

Carlisle Pike, Silver Spring Township, PA, 3 Feb 2009

The lease sign is the biggest change here. Otherwise, no activity.

Other posts in this series:
Creative Destruction? Sep 2008
Creative Destruction? Nov 2008

"Goals Gone Wild" - a bracing indictment of the business objectives culture

"What's your MBO?"

That was a frequent question at one of my past companies. MBO meant management by objective, and was a way of asking someone what their goals were for that year. It's funny, thinking back on it, that the goals culture was so strong that we never gave MBOs a second thought. And who doesn't sit down with her manager at the beginning of each year to set out objectives?

In a new working paper by Max Bazerman, Lisa Ordonez, Maurice Schweitzer, and Adam Galinsky of Harvard Business School ("Goals Gone Wild: The Systematic Side Effects of Over-Prescribing Goal Setting"), the authors take a fresh look at the goals culture and see that, rather than be a driver of effective performance, "goals gone wild" have caused much damage in the business world. Here are a few examples:

Enron's growth objectives created an out-of-control culture inspiring market manipulation and outright fraud.

Ford's goal to build a small car weighing less than 2000 pounds and costing under $2000 by 1970 caused the Pinto to be rushed to market, with safety checks unperformed or ignored. The car's gas tank was prone to rupture in an accident and, as was learned, the car tended to explode on impact from the rear.

Sears' goal to increase auto service sales in the early 1990's to $147/manhour resulted in overcharging and unnecessary repairs.

Bazerman's work on behavioral effects in negotiation (including one of my favorite books of 2007) and decisionmaking is uniformly excellent and insightful. In this paper, he and his co-authors survey research showing how challenging goals, while creating a powerful incentive, also create significant negative side effects, including:

- focus on short-term results over long-term benefit
- favoring the easy-to-measure over the difficult to measure, independent of importance
- goals creating performance ceilings (e.g., the salesperson who stops selling after reaching her quota)
- reduction in cooperative behavior
- reduction in learning
- unwillingness to experiment and innovate
- decrease in intrinsic motivation ("Show me the money!")

It's not a pretty picture. I doubt after reading this that anyone would be more eager to set goals for their employees. It does a great job in laying out the risks of overreliance on goals. There's more work needed on how to deploy goals effectively, because that's the question that we're left with at the end.

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.

A Business Owner's Novel Response to the Financial Crisis

A local entrepreneur who's in the physical therapy/rehabilitation business told me about his approach to dealing with the financial crisis:

First, he gave up his lease on a large office and moved into a smaller one, cutting his overhead substantially. That's a tactic that would be at the top of anyone's list.

Then, he did something unexpected... he raised his prices. As a result, he lost some clients. But because of the lower overhead, and the higher contribution margin of the remaining customers, he's making more money.

As he said, "Basically, people who weren't valuing the service don't come anymore. The clients who are left really care about their health and are willing to invest in it. For them, the price is reasonable."

Anyone can cut costs. But cutting costs and raising prices? That's an innovative prescription.

Related post:
If you can raise prices, don't hesitate

Shop Talk is moving!

Hi, all,

We've loved being here at Blogspot for the past three years, but it's time to move on. Given the economic situation, the landlord over at caddellinsightgroup.com gave us a great deal to consolidate our space over there, so off we go.

We'll keep adding new posts here for the next couple of weeks, but after March 1, we won't be posting new material to this space any more.

Please head over to our new home and stay awhile, and if you'd like to update your RSS reader, here's the feed for the new place.

Thanks for shopping!

John

Customers are talking: @comcastcares - not just conversation

I recently spent some time with Frank Eliason, known to the Twitter community as @comcastcares. Frank has become a minor internet celebrity in the last year because of the work he and his team do resolving problems for unhappy Comcast customers who tweet or blog their frustration with Comcast.

His work is fascinating to me because Comcast is a gigantic, engineering-driven company and one which you wouldn't have expected to embrace a "customers are talking" approach.

I think there are two reasons Frank and his team stand out. One is novelty. There aren't a lot of companies who have prominent profiles on Twitter (Dell and Zappos are two others). That won't last, of course, as more and more companies jump on board.

The second reason is more sustainable. The term "conversation" is everywhere in social media. It's all about the conversation. Not for users of products and services. When they talk about products and services and companies on Twitter, it's not just to have a conversation. In many cases, it is to highlight a problem.

The Comcastcares team doesn't just engage in conversation. They solve problems. Here's an example (for readability, these tweets are ordered from earliest to latest--the opposite of how you would read them on Twitter):













The biggest reason for me Frank and his team succeed is that they are customer-service and tech-support people, not PR people. Frank in particular has years of call-center experience, and therefore is able to skillfully engage with unhappy customers, listen, and, best of all, get them a quick resolution. In other words, your company can say it's serious about social media, but actually using it to help people is better than the best messaging in the world.

Did you see from the example above that this problem was reported in the hour before the Super Bowl and was resolved before kickoff?

Customers are talking: turning points in telephone sales calls

I'm working on a project to listen to telephone sales calls and help the client find patterns explaining why some calls end up in a sale and others don't. Each call is a story, complete with emotion, conflict, and turning points. Listening to dozens of these, pictures begin to emerge of how people buy, and how, even when they like the product and may want to buy, don't. And it has nothing to do with logic.

One turning point I've experienced is the moment when a call turns from being headed to a close, to not. On the calls, it's very subtle: a pause, a change of subject, perhaps an additional question from the prospect. But afterward, a call that seemed to be heading toward a sale instead is, at best, a promise to call back.

The best way to explain it is to relate a personal story.

I've been a customer of Verizon Wireless for more than five years. I got a telemarketing call from them today, offering inducements to renew my service contract early. I've been evaluating this for a while now (this is a subtext of my posts on the Blackberry Storm), and after discussing it at some length with my wife, we're headed toward renewal.

This call, then, could have been Verizon's way of closing the deal. I was pretty ready, although I was thinking of doing this in March. If the deal was good enough, perhaps I would pull the trigger today. The call went something like this:

"Mr. Caddell," the rep said, "we are offering some extras today if you want to renew your contract early. You might be able to get a discount on a new phone."

"When does my contract expire?"

"The end of July."

"I thought it was the end of March."

(turning point 1) "That's the time when you are eligible for an early equipment upgrade. Your contract expires in July."

"OK, what are you offering?"

(turning point 2) "100 extra minutes per month." (This wasn't attractive to me at all. We don't use the minutes we have now.)

"How much off the phone?"

(turning point 3) "Well, you'll be eligible for that at the end of March."

"Earlier you said I could get a discount off a phone." (I didn't tell her that Verizon had already sent me two mailings offering me phone discounts for renewing now.)

"I said you might be."

There was no way was I going to renew then. At each turning point, in fact, I became farther from renewing than I had been before the call. Instead of feeling happy, encouraged, eager to get a new phone, I felt frustrated, annoyed, and that I had wasted time even picking up the phone.

It wasn't the rep's fault. She was given a difficult product to sell (competing, in fact, with the company's own mailings). When I began to ask pointed questions, the pitch fell apart. There was probably no rep on earth who could have closed me with that offer.

Which is a significant learning from this project for me. Selecting and training reps is only a part of the formula for success in telesales. The product must be useful, and the offer must be made attractive. And that work happens far outside the call center.

One of the world's most dangerous jobs: change agent

This article (registration required, sorry) from Booz & Co's "Strategy and Business" will send a chill up your spine. The article, "Stand by Your Change Agent," by Stratford Sherman and Marisa Faccio, describes the results of a survey of 84 change initiatives between 1995 and 2005.

The initiatives themselves were successful, in the main: 85% met or exceeded the goals set out for them.

The leaders, though, didn't fare as well. Sherman and Faccio write: "Some 70% of the executives who led these major transformations went unrewarded, or were sidelined, fired, or spurred to leave."

The authors go on to describe types of companies at different levels of performance and how the change agent role is very risky in all but the very strongest companies. My take: large-scale changes disrupt the organization, stir up resistance, much of which gets focused on the change leader. If the change fails, the consequences are self-evident. If it succeeds, however, the pain endured in achieving it takes a toll on the person running the initiative.

If you're considering taking this role on, do it for the experience, the resume fodder, and the feeling of accomplishment if you're successful. Don't do it, however, for the recognition of your peers and leaders. Chances are, that won't be coming your way.

Business Book Hall of Fame: "War & Peace"

Heard of it?

Read it? Probably not. It's the dictionary example of a long book. And it is long. Based on some indirect prodding from Dave Snowden and Jochum Stienstra, I finally picked it up, determined to read the whole thing, in November 2008. It is now the end of January 2009, and that'll tell you what a commitment is required to finish it. (The pile of unread books by my desk is now immense.) I can also heartily recommend the new English translation by Pevear and Volokhonsky; the writing was easy to understand and felt modern and fresh.

Was it worth nearly three months of effort? Hell, yes. "War & Peace" is an amazing work for our time (or any time). There are great love stories and domestic dramas in the book as well, but for the purposes of this post I'm going to focus on how the book tackles leadership, strategy, complexity and chance.

Perhaps most amazing is how Tolstoy shoots down the historian's view of the power of individuals to shape history. Here he is explaining Napoleon's rise to power:

Chance, millions of chances, give him power, and all people, as if by arrangement, contribute to the strengthening of that power. Chance makes the characters of the then rulers of France submissive to him; chance makes the character of Paul I, who recognizes his power; chance makes a conspiracy against him which not only does not harm him, but strengthens his power. Chance sends d'Enghien into his hands and accidentally forces him to kill him, thereby convincing the mob more forcefully than by any other means that he has the right, because he has the power. Chance makes it so that he strains all his forces towards an expedition to England, which obviously would have destroyed him, and never carries out his intention, but instead unexpectedly runs into Mack and his Austrians, who surrender without a battle. Chance and genius give him the victory at Austerlitz, and by chance all people, not only the French, but all of Europe as well, with the exception of England, which does not participate in the events about to take place, all people, despite their former horror and loathing for his crimes, now recognize his power, the title he has given himself, and his ideal of greatness and glory, which to all of them seems something beautiful and reasonable. (pp 1134-1135)

Of course, when the chances turn against him, starting with the invasion of Russia, he quickly becomes a fool and a failure. Was he a genius, or an idiot? Neither, of course. He was participant in a sequence of events over which he had little control, according to Tolstoy. This is a humbling lesson for leaders of all types, who operate in the complex domain--whether that be warfare, business or politics. Events will define you far more than you define yourself. Your actions, to a large extent, will be overwhelmed by forces outside of your control.

Does this then mean that generalship doesn't matter? Tolstoy would say yes. Throughout the book he writes that the most carefully-created war plans go off the rails immediately after the battle begins, while a single junior officer, deciding on his own to attack the French flank, can have an immense impact on winning or losing. And that the passions of the soldiers have much more effect on the outcome than the best leadership and training.

In my times working at very large companies, this seemed true to me. The accomplishments of the company were the agglomeration of thousands of small efforts on behalf of the rank and file. [You could argue that company failures--Enron, AIG, for example--also work this way.] First-line managers had a big impact. Directors, somewhat. But the plans and strategies of the C-level executives, sitting in the God Pod, at the end of the day, didn't mean much at all.

Customers are talking: the Blackberry Storm/Twitter project

Like a lot of people, I've been trying to get a handle on what Twitter means for businesses. My professional interest is in finding unsolicited customer stories and making sense of them--wherever they are. In this, Twitter has a lot of promise. It's easy to use, brief and spontaneous. So are customers using this forum to talk about products? I decided to find out.

My test case was the Blackberry Storm. It received an absolutely terrible review from David Pogue, the New York Times' consumer-electronics columnist. It also had very good early sales numbers--500,000 units the first month of its release, according to the Wall Street Journal. The combination of these made it an irresistible subject to study: would the Twittersphere be flooded with posts from enraged buyers?

The project was made more interesting today, when the Wall Street Journal published an article entitled, "Bumpy Start for Blackberry Storm," which referred to complaints of early Storm users (but not Pogue's review), including this vibrant quote: "I found myself wanting to throw it in the ocean due to my frustration with its overall usability." The article also referred to a release of firmware soon after launch intended to address some of the early complaints, particularly response time.

I used Twitter Search to look for messages containing "Blackberry Storm" and a happy or sad emoticon (there's a button on the advanced search page that enables you to restrict searches this way). I looked at 88 English-language tweets going back to December 27. Here's what I found:



The biggest surprise to me was: where were the complaints from users? While half the Tweets were from Storm users, as opposed to people commenting on the Storm, or thinking about it, only 4 out of 44 (9%) of the users' tweets were negative, while 23 (52%) were positive.

(If you want to check out the searches I created for this project, they are here: happy search, sad search. Twitter Search has been acting funny the past few days--I'm only able to get one page of recent results, and can't search farther back. I used an RSS feed of the search over a period of weeks to gather the entire list of 88,)

From a customers are talking perspective, this isn't a terrible outcome at all for the Storm. Whether the firmware change made that much difference, or the Blackberry brand loyalists are immune to hardware glitches, or simply that devices like this aren't perfect and users expect that--they are not saying this is a terrible device. Many are saying that they like it. If I'm Blackberry and Verizon, I'm not discouraged by the Storm's initial reception.

By the way, the WSJ has already started to backtrack. On the web site, the article is now entitled, "Blackberry Storm Is Off To A Bit of a Bumpy Start."

(Disclosure, I am a Verizon customer and a Blackberry 8830 user. If you think I am a shill for Verizon, please don't make up your mind until you read this post, or this one.)

"Underground" as an example of narrative sensemaking

Over the last couple of years, I've gotten more involved with collecting and sorting through multiple narratives to help businesses understand and deal with difficult problems. (Difficult, meaning the normal tools such as numerical analysis, process mapping, etc., are insufficient to understanding the issue.) This has become a cornerstone of my professional life, and it's been a rewarding and at times thrilling undertaking.

Shawn Callahan at Anecdote introduced me to this area, and then I learned about the work of Dave Snowden at Cognitive Edge. I met Cynthia Kurtz, who was an early collaborator with Dave Snowden, and have learned a lot from her as well. To the extent that the work I do is valuable to my clients, these folks deserve much credit.

Yet one of the best teachers I have had here (and I'm still a rank beginner) is the book "Underground" by Haruki Murakami. He's one of my favorite novelists, and this is one of his few nonfiction books. I read it years ago, long before I'd learned the terms "story listening," "mass narrative capture," or "sensemaking." But when I began learning from Shawn, Dave, Cynthia and others, it immediately came to mind.

In "Underground" Murakami seeks to understand and to help readers understand one of the most terrifying episodes in recent history--the sarin gas attack on the Tokyo subway system perpetrated by members of the Aum Shinrikyo movement in 1995.

Except for a brief author's preface, the book consists of the stories of survivors of the attack. Murakami interviewed everyone he could find from the list of victims, and presented their stories, unadorned, one after the other. He then interviewed a number of members of Aum Shinrikyo, and presented their stories, as well (a decision that is aligned with goals of narrative learning to take in multiple perspectives of a situation).

The result is a chilling, relentless book, that nonetheless does what no news report, CNN story or even historical chronicle could do--shows the impact of the attack and its aftermath on the real people who were caught up in it; and illuminates the puzzling (to outsiders) behavior of the Aum Shinrikyo members. It's a fully-realized, three-dimensional picture of a disaster, and goes a long way to explaining the unexplainable. In this way it's like an extended version of John Hersey's great "Hiroshima," though shorn of the authorial voice.

When you read this book, the stories layer and layer; you see the event from a deeper and deeper perspective, till you almost feel like you're there, inside the attack, experiencing it with the victims. And then you read the Aum Shinrikyo stories, and somehow you see that their world has its own internal logic. You finish the book, and you're exhausted, but you know deeply about this terrible event, how it happened and what it did to people. Your brain is working hard throughout--you're sensemaking.

If you're interested in narrative sensemaking, or you just want to learn the full story of a human disaster, you must read "Underground."

(Here's a much earlier reference to "Underground" and the subject of story-listening.)

Customers are talking: the empathetic company

The New York Times today features an interview with Dev Patnaik, a consultant specializing in helping companies to develop growth strategies and the author of a new book, "Wired to Care: How Companies Prosper When They Create Widespread Empathy," which claims that a missing ingredient in recipes for corporate success is the human train of empathy:

[Patnaik] argues in the book that it is not the lack of innovation that hampers companies, but the “empathy gap” — the chasm between employees in organizations and the people that they serve. Companies, he said, “do a good job of stamping empathy out of employees, then are surprised when employees make poor decisions or try to sell things that people don’t need.”

In a way this reflects the "bringing the outside in" concept from Kotter's "A Sense of Urgency." Patnaik gives the example of the auto managers who never experienced the car business from a customer's point of view--buying a car, financing it, servicing it, etc.--and thereby lost touch with the consumer and the marketplace.

Part of this "empathy gap" is the distancing of management from the customer and the customer experience--where dashboards and status reports have crowded out anecdotal information and real human experience. This is what the "customers are talking" initiative is attempting to do--to connect managers and leaders with the ground-level experience of their customers and by so doing to equip them to make better decisions about their products and services.

Here's an interesting observation from Patnaik about one of the big problems with marketing:

The companies are trying to get the customers to identify with their product rather than getting their own employees to identify with their customers.

In other words, companies are trying to make up for their lack of customer insight with messaging. These marketers believe that if they create a powerful, resonant message, it will draw people to their products. But if the product is not created with a deep sense of the customer in mind, the message won't work.

I'll have to pick up a copy of "Wired to Care" and see what else the book has to say about this important subject.

Related posts:
A Competitive Advantage: Employees who spend most of their time talking to customers
Time to start listening to front-line employees

3rd Annual Top 5 HBR Breakthrough ideas

... in which we winnow down Harvard Business Review's yearly list of 20 breakthrough ideas to a manageable 5.

1. The Business of Biomimicry, by Janine M. Benyus and Gunter A.M. Pauli. Many of the most important new innovations we'll see in 2009 and beyond will involve borrowing and inspiration from nature's processes.

2. Institutional Memory Goes Digital, by Gurdeep Singh Pall and Rita Gunther McGrath. What will happen when every word, gesture, etc., of business interactions are recorded and stored? [I'm most interested in the subset of this involving intentionally captured and signified narrative information for knowledge sharing. The Mistake Bank is an early stab at this idea.]

3. How Social Networks Work Best, by Alex Pentland. New research shows that collaborations work best when social networks are used differently for discovery and integration activities.

4. The Ikea Factor, by Michael I. Norton. Having a hand in building a product leads to a stronger emotional connection with it. [Does this say anything about self-service gas stations and supermarkets?]

5. Forget Citibank, Borrow From Bob, by John Sviokla, and Consumer Safety For Consumer Credit, by Elizabeth Warren and Amelia Tyagi. It's inevitable that the fallout of our financial crisis will be a radical restructuring and reinvention of the financial industry. And it's about time.


Related posts:
2008 Top 5 Breakthrough Ideas
2007 Top 5 Breakthrough Ideas

Customers are talking: The Eureka Button

I was talking to Cynthia Kurtz once and she mentioned, "If I were developing a piece of software I would always want to put a Eureka Button on every page."

A Eureka button is this: if while using the system a user just figured something out that others might benefit from, he/she would click the button and be presented with a page where she could enter:

What Happened?

Where does this apply?

When should people read this story?

This input and information about where they were in the system (page & data) would be uploaded to a database. The database can be searched for patterns or browsed periodically, looking for bugs or unexpected uses of the system.

It's easiest for me to think about the Eureka Button in the context of enterprise software. Having worked a lot with CRM systems for telephony, I know that these systems have hundreds of user pages, with a virtually infinite number of paths through the system.

In these environments, product managers may know in theory how people should use the system. But their knowledge is quickly overtaken by experienced users, who learn how to apply the system to their jobs, often finding tricks or shortcuts to make the system work better for them. ("Eureka! I just figured out that if I dummy out some data items, I can capture information & save information from a prospect before they decide to make a product purchase. If they call back, I can look them up by their phone # and I don't have to start all over again.")

In this situation, a Eureka Button has great value for the product manager and the users. Product managers can learn about difficulties users have and how they overcome them. The tricks can be incorporated into the product, or deficiencies addressed. Users can learn from each other--perhaps Eureka Button entries can be blogged automatically and read by other users, dispersing tips and tricks and encouraging others to share their stories.

I can't even begin to catalog how a Eureka Button could benefit consumer sites, where (especially recent) products follow an emergent, iterative development approach and patterns of usage can affect the entire purpose of the product (e.g., Twitter). There are people much better suited than I to discuss some of these implications. If you're one of them, please let us know in the comments how the Eureka button could be used with these products.

(In searching for prior references to a "Eureka Button," I discovered this NY Times article from 2004. The article mentions that "'It's amazing how many people there are who find pleasure in sharing the little discoveries they make.'" The article focuses on undocumented features in PC software and in consumer electronics. The article references a site that publishes user stories of hidden Windows features.)