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Archive for February, 2008

Influential business quotes

Friday, February 29th, 2008

“You have to be from somewhere,” Terrell Holland, GTE, 1984.
My boss at my first job out of college, Terrell was urging a group of new hires, me included, to develop deep skills in some part of the business before trying to branch out to other disciplines. And despite not having done any engineering work or software development for fifteen years, I still find that I approach problems with an engineer’s mindset. That’s where I’m from.

“Time kills deals,” Gordon Adams, EDS, 1994.
I’ve talked about this before. And I’ve read criticism of this saying. What Gordon meant was, assuming a deal is worth doing for you and the customer–you can’t wait for the deal to come to you. You have to go get it. And I still believe that.

“Ha-ha-ha-ha,” Bruce Leonard, EDS, 1996.
Bruce ran our division at EDS and I went to him for some career advice. I was considering going back for a PhD, but wanted to talk about senior management as a possible pathway. I had told him that it seemed to be that there was a huge gap between my capabilities and what was needed to be a senior manager. That executives were somehow different in a quantum way from us midlevel folks. And he laughed.

“When I first started my own practice, I learned this: I was not in the law business; I was in the sales business,” Don McFadden, 2006.
Don is my father-in-law. I’ve heard people say this about consulting: “I love it all except the selling part.” Then you are in the wrong business, my friend.

“What I learned from Lenny Bruce was: You don’t need the entire audience…. If you’re too needy of that entire audience, you won’t find your own style. [When I saw Lenny Bruce, he] had only a third of the audience with him. And he didn’t mind that at all,” comedian David Steinberg on Fresh Air, 2007.
I’m not a standup comedian, but this affected me. It’s easy working in business to try to steer to the middle of the road–to try to make everyone happy. But it doesn’t work, and worse it limits the value you have. To be all you can be, you have to say what you think, and accept the consequences that some people (maybe most people) won’t agree.

sales, consulting, legal, leadership, entrepreneurship

Posted in consulting, leadership, legal, sales | Comments

The new gamer: social and casual

Thursday, February 28th, 2008

The New York Times’ astute video games columnist, Seth Schiesel, has written an article explaining the current state of the videogame industry, with insightful comments from speakers at the recent Game Developers Conference. Former leaders like Microsoft and Sony have lost ground due to their fixation with single-player games aimed at young men. The “new wave” including Nintendo and Activision (both companies with a lot of history) have brought out product that meets customers’ desire for social gaming experiences–and less daunting, “casual” games.

Judging by our household, where the Wii is such an attraction to our seven- and five-year-old sons that we must ration access, and where playdates involve bringing your Wii remote to your friends’ houses, I’d say we are right in the middle of that new market.

When winter breaks, we will see if my hours of swinging the remote on Tiger Woods PGA 2008 has any impact on my proper golf swing.

(Photo: a Nintendo Mii avatar in the image of Paul McCartney from kottke.org)

videogames, marketing, New York Times

Posted in New York Times, marketing, videogames | Comments

Companies stall because they don’t listen to customers

Wednesday, February 27th, 2008

The Stall Points Initiative is an effort by the Corporate Executive Board, a business research group, to pinpoint why companies suddenly stop growing, then stagnate or decline for years thereafter. If you think that’s a rare trend, think again: according to CEB, 87% of the companies they studied (all at one time members of the Fortune 100 or similarly sized non-US companies) had stalled once or more.

Matthew Olson, Seth Verry and Derek van Bever of the CEB describe their work in the March issue of the Harvard Business Review (”When Growth Stalls” – free link). The authors contend that most of the reasons for stalls are within the company’s control (factors such as regulatory actions, macroeconomic issues, political shifts are responsible for only 13% of the stalls).

CEOs are advised to watch for “red flags” to see if their companies are headed for a stall. Here’s the list:

Core assumptions about the marketplace and company capabilities to exploit it are undocumented
Market definition boundaries are out of date
Definition of core market is out of date
Infrequent testing of customers’ valuation of product attributes
Ineffective translation of customer insights into products
Core customers no longer are willing to pay a premium for the product

Five out of the six reasons directly point to an inability to listen carefully to the market and compose a realistic picture of the strengths and weaknesses of the company’s products.

So why do stalls happen? Companies point inward and lose contact with customers. Their internal focus leads them to overestimate their strengths and show overconfidence in their offerings.

Companies need to constantly question their value propositions to customers (this strategy approach can help) and guard against falling in love with their products. A little humility, a lot of listening, and never being satisfied.

strategy, growth, Harvard Business Review

Posted in Harvard Business Review, growth, strategy | Comments

"Big Think Strategy" is a fun, inspiring read on reinventing business

Tuesday, February 26th, 2008

Every CEO these days wants to reinvent her business. One problem is thinking big enough. Being part of an industry, a market, a sector tends to limit a company’s peripheral vision. How do companies break out of their comfort zone and find strategies that take advantage of their unique strengths while opening up new markets?

That is the question “Big Think Strategy” by Bernd Schmitt, professor at Columbia Business School, tries to answer. And the book does a good job of showing what is needed to “kill the sacred cows” of a business and imagine and invent a prosperous, growing future. Schmitt’s focus is on nurturing creativity in the executive suite and in among the rank and file. And it’s written in a fun style that complements the subject matter and inspires the readership to give the ideas a try.

The best parts of the book are around generating new ideas–from staff, customers or seemingly unrelated industries–creating a strategy from those ideas. In Chapter Four, Schmitt describes four “big think strategy” types–opposition, integration, essence and transcendence–and what competitive reaction each type is likely to spur.

Like more and more business books these days, Schmitt lets his personal story seep into the pages, whether it’s his love of steak or a nice suit, or the opera. (I have to say my enjoyment of these anecdotes was offset somewhat by twinges of envy–Schmitt’s life seems pretty posh for a consultant… perhaps he is hiring?)

“Big Think Strategy” is a companion piece to a couple of other recent books of importance: “The Opposable Mind” and “The Future of Management” (see posts on these books here and here). And it suffers a bit by comparison to each. Due to its brevity and fewer examples, and to some extent its breezy writing style, it feels less substantial than either book. Nonetheless, it’s a good book on a crucial subject for today’s leaders.

If you can only buy two books on reinventing your business this year, I’m afraid you’ll have to skip “Big Think Strategy.” Otherwise, it’s a worthy addition to your bookshelf.

creativity, strategy, business development, reading list

Posted in business development, creativity, reading list, strategy | Comments

Stop studying the problem, and just try something!

Friday, February 22nd, 2008

Yesterday I tried to make the case that most business situations are complex and not predictable ahead of time. Time spent developing foolproof strategies, detailed plans, etc., is time wasted.

What to do? One answer is probes, or inexpensive experiments. I’ve already cited Boudewijn Bertsch’s posts this week on the Cognitive Edge guest blog, and at the risk of going to the well too often, I’d like to discuss him again today.

He recently posted on the efforts by the Alexandra Hospital of Singapore to reduce waiting times for patients by offering a real-time webcam image of the emergency room waiting area on the web. People considering visiting the ER could view the image on the web and anticipate how long they might have to wait before seeing a doctor.

The webcam idea was a small, cheap solution. It might not have made any difference. But the hospital tried it, and found that waiting times improved. [One explanation: at times when the ER was already busy, patients with minor complaints either waited to come in, or found another hospital.]

If the webcam had not made an improvement–no problem, just take it down, and the hospital would have written off an investment totaling $400.

Boudewijn mentions that the Alexandra Hospital’s continuous improvement program used elements of the Toyota Production System. There’s a lot to the TPS, but one aspect that I find fascinating is that workers who propose ideas are asked to estimate the impact of the change. Then once the change is implemented the actual results are compared to the estimate and shared with the worker. Is it surprising that the estimates get better and better? [This Harvard Business Review article illuminated that feature very clearly.]

In a somewhat similar vein to the Singapore hospital, Google experiments with new products. They put them out there, without formal launches, people discover them, Google adjusts and tweaks, and the products develop a large following, or not. In the latter case, they retire the product, again with little fanfare.

Google has gotten some criticism about the frequency of their product failures, but what is being missed in this is that they are performing lots and lots of low-cost experiments. Their unconcern for media criticism allows them to put a lot of probes out there and “see what sticks,” whereas many many competitors in the IT world stick with an approach of: develop for two years, study the market, then make a splashy launch.

Google gets a lot more at-bats than its competition. If they fail more, it doesn’t matter, because they are cheap failures. The number of successful products, at least to my eyes, is much higher.

So if you’ve got a great idea, or even merely a good one, find a cheap way to try it out. If it doesn’t measure up, kill it. Repeat often.

(Photo by svaziphil via stock.xchng)

product development, complexity, innovation, marketing, Harvard Business Review

Posted in Harvard Business Review, innovation, marketing, product development | Comments

What in hell is retrospective coherence?

Thursday, February 21st, 2008

It’s perfectly clear why the dot-com bust happened. A bunch of internet startups all chased the same customer base, sought eyeballs instead of revenue, and tried to get big fast. Telecoms operators, hardware companies and software vendors all got fat on the investments of these startups. Then, when it became clear revenue wasn’t forthcoming, the whole house of cards collapsed.

The problem is, that wasn’t at all clear in March 2000, the top of the bubble. From my recollection, everyone owned stocks and checked Yahoo Finance throughout the day, calculating their (paper) net worth in real time. (Remember the book “Dow 36,000“? It’s now available for $0.93 on Amazon.)

Our utter clarity on the events of the dot-com bust is an example of retrospective coherence. I first saw this term in the writings of Dave Snowden of Cognitive Edge. Retrospective coherence means that, in hindsight, it’s easy to explain why things happened in a complex environment. Yet it is impossible to predict them ahead of time. (The long-running Dartboard investment competition in the Wall Street Journal bears witness to this phenomenon.)

Another example from the US sporting world is the recent Super Bowl. From all the post-game coverage, it’s perfectly sensible why the New York Giants beat the Patriots. Their defensive line was superior, their coaching was better, the players were tougher.

But–before the game, nearly everyone had picked the Patriots. And a couple of key plays affected the outcome–if Manning had gotten sacked, or Tyree not made the catch on the same play, the papers would have written a very different story.

Getting seduced by RC causes us to create foolproof strategies and riskless plans. Once these are exposed to the complexities of the business world, their usefulness quickly deteriorates. The real damage occurs when we hang onto them too long.

When we recognize this trap, we can approach problems in a different way. Rather than trying to find the one correct path to our goal, we can perhaps decide on the first few steps, take them, assess where we are and whether to change direction, and progress in that manner. Or we can attempt some experiments and see which path is working best for our objectives (see what Dave says on “safe-fail” probes).

But always we must be aware that the playing field is constantly changing, that today’s “no lose” investment strategy is tomorrow’s $0.93 Amazon special, and that, sometimes, when the championship is on the line, the Giants will beat the Patriots.

(Photo: Sports Illustrated’s cover of the Giants’ Super Bowl win)

what in hell is, strategic planning, complexity

Posted in complexity, strategic planning, what-in-hell-is | Comments

A quick skim covering innovation, marketing, and complexity

Wednesday, February 20th, 2008

A quick skim through several important blog posts you should read right now.

John Quelch of Harvard Business School covers eight principles for marketing during a recession.

Glenn Gow of Crimson Consulting Group explains clearly that while great companies should perhaps “eat their own dog food,” they should certainly become expert consumers and users of their competitors’ products.

Roberto Verganti, visiting professor at Harvard, has a paper covering, among other topics, why cutting-edge design companies don’t use focus groups and why innovation followers have more product variety than leaders. (See here and here for earlier posts for discussion of earlier Verganti work.)

In the Cognitive Edge guest blog, Boudewijn Bertsch relates a powerful story of how a company–which had tried and failed to improve workplace safety using directives and processes–finally made progress by using stories to give it “a human face.” (Boudewijn’s other superb posts are also required reading: “The forgtten whole and the flawed focus on the ‘lonely’ parts of the organization” and “‘Improvement must be focused on what you want, not on what you don’t want.’ Russell Ackoff.“)

(Photo by zela via stock.xchng)

innovation, marketing, complexity, learning, narrative

Posted in complexity, innovation, learning, marketing, narrative | Comments

The Forgetting Organization

Tuesday, February 19th, 2008

Many years ago, I took a series of courses adapted from Peter Senge’s book “The Fifth Discipline.” The hallmark of that book was a concept called “the learning organization,” which posited that to be adaptable in an environment of constant change, companies had to nurture and support the learning impulses in all their employees.

While I really enjoyed the courses (and over the past decade have grown to appreciate them more), I grew frustrated by our company’s inability to learn from our experiences. We made the same mistakes again and again.

With the gallows humor familiar to anyone who works for a very large, slowly-changing company, I started calling us “The Forgetting Organization.”

Twelve years on, not much has changed. January’s Harvard Business Review features “The Experience Trap” (link – $$) by Kishore Sengupta, Tarek K. Abdel-Hamid, and Luk N. Van Wassenhove. In simulations performed with software project managers, the authors discovered that even experienced project managers made similar mistakes–for example, bringing on staff too late in the project–again and again, in different projects. Rather than learning from what had gone wrong in Project 1, the PMs did much the same in Project 2, and 3, and so on.

Sengupta et. al. attribute this forgetting to several factors: (1) the disjoint and time-lagged relationship between cause and effect, (2) conflict between initial plan and long-term goal when conditions change and (3) the fallibility of initial estimates (and people’s tendency to hang onto those far past their useful lives).

In other words, software projects, like so much of the high-value work in business today, operates in the complex domain. The authors prescribe a set of practices to help companies suffering from “the experience trap,” but a simple recognition of the environment that people are working in, and training and reinforcing awareness of that fact, could help workers learn more.

Or, in other words, to forget less.

(Note: I also mentioned the above story in a previous post.)

complexity, learning, organizational behavior, project management, Harvard Business Review

Posted in Harvard Business Review, complexity, learning, organizational behavior, project management | Comments

Celebrating 500 posts

Friday, February 15th, 2008

According to Blogger, this is the 500th post for Shop Talk. Just about 600 calendar days have passed since June 13, 2006, when we first published on the net.

Among these posts have been:

As to readership, there have been over 20,000 readers and 30,000 pages viewed since inception. I thank them all.

And you, too.

Posted in thanks | Comments

Garr Reynolds celebrates learning via narrative

Wednesday, February 13th, 2008

You don’t have to read this blog very often to learn that I love the work of Garr Reynolds on developing and delivering excellent presentations. I’ve bought his book and plan to read and review it in the next few weeks. In the meantime, however, Garr continues to give away his knowledge and learning via the Presentation Zen blog and today he touches on (among several other items) one of my favorite topics: learning via narrative.

In reviewing a Google Talk of Cornell economist Robert Frank, he highlighted some of Frank’s thinking about learning, and in particular two remarkable quotes:

At its core, the narrative perspective holds that human beings have a universal predisposition to “story” their experience; that is, to impose a narrative interpretation on information and experience.
Walter Doyle and Kathy Carter, University of Arizona

and

[children] turn things into stories, and when they try to make sense of their life they use the storied version of their experience as the basis for further reflection…. If they don’t catch something in a narrative structure, it doesn’t get remembered very well, and it’s not very accessible for further kinds of mulling over.
Jerome Bruner, “Narrative and Paradigmatic Modes of Thought”

Exactly right. This is about the most straightforward and commonsense explanation for the value of narrative in the businessplace that I can imagine. Given that, everyone involved in business leadership should work on understanding and using these concepts to teach their staff–and to learn from them.

It starts now.

narrative, learning, organizational development,

The full Robert Frank speech is below: