Skeptical optimism

 consulting, entrepreneurship, Social Entrepreneurship, strategy, UK  No Responses »
Mar 012011
 

Difficulty in opportunity | Opportunity in difficulty
There’s an old adage that the skeptic sees difficulty in every opportunity, while the entrepreneurs sees opportunity in every difficulty. Think about it. Imagine it’s 1998. Search sucks. Yahoo’s your best bet. Banner ads and the blink tag run rampant across the Internet. Pets.com has just closed its Series A. Portals are all the rage. What’s a smart entrepreneur to do?

Launch a site based on search, keywords, and no banner ads.

OK, sure, zag when they zig
The thing is, you might go for it. Get off your lazy bum and stop scribbling on beer mats and start up your company. Optimism is what you need. Frameworks. Business models. Adaptability. Entrepreneurial mindset. Zagging vs. zigging. Optimism.

Optimism is great, critical, important. But it’s not just what you need.

Healthy skepticism
This is your ability to look at yourself, your business, your product, with the outside perspective of the skeptic, and see it clearly. Then to turn to the market and proceed with healthy optimism. It’s the difference between blind faith and reasonable optimism. Cultivate it. Then proceed forward as though you’ve already succeeded.

Television, social media engagement, and Nielsen ratings

 consulting, entrepreneurship, strategy  No Responses »
Jun 012010
 

I got sent this article from the New York Times today. It was short, to the point, and completely missed the point, perhaps.

What do you want to measure?
Sure, of course, you want to know how much online buzz equates to rankings, but what does that really tell you of true value? I don’t think that your advertisers (who pay for all those shows) really care about the number of eyeballs watching your show (whether real or on your PVR).

What they care about is people buying their stuff. This is what google figured out so well ten years ago.

What they care about is showing the right ads to the right people. Like P&G and Unilever sponsoring soap operas back in the 50s.

Market fragmentation
We’ve hit this point where everyone’s got 50+ channels of TV to watch. On top of that, they’ve got 4OD, IPlayer, Hulu, and others. People aren’t watching TV the same way. Media and advertising companies need to pay more attention to the engagement they can have with smaller, stronger audiences rather than beaming out to loads of eyeballs.

Landscape changes
Advertising’s gotta change, and I think it’s a bigger change than using the product placement ideas stuck into this article. The iPad, the web, smartphones, films, and Television create an ecosystem in which you can engage with people and build brands that last.

Go do it.

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On Safety: Fire (?) at the British Library

 strategy, travel, UK  No Responses »
Mar 162010
 

Situation
I was working (actually, eating soup and planning my workday) at the British Library half an hour ago when the fire alarm went. We all packed up and left, quietly, orderly, in a very British fashion, milling around in the courtyard.

I tweeted about it.

Here’s the funny thing
Potential Fire in a library? One of the world’s greatest? With three of the four courtyard exits closed tue to improvement works? Surely there should be some panic? Some worry?

Nope. Mostly eye-rolling, looks of disbelief, checking of watches to make sure it’s not just time for a drill.

Our modern life has made us feel incredibly safe. Usually.
I experienced much the same thing about ten years ago in Victoria station. This was before Sept 11th, but after London bombings had pretty much faded away. The IRA and ETA had gone fairly quiet. But still.

The odd thing, to me, is that act irrationally in these sorts of cases, where we may be in actual danger, but we personalise false dangers.

Most people are convinced that crime, and in particular, violent crime, is on the rise in Britain, but it’s been falling steadily.

The chances of an American being killed (or even endangered) by a terrorist attack are approximately the same as being eaten by a shark whilst simultaneously hit by lightning, but we still ran out of duct tape that one time.

The “best experts” provide a good image that they’re providing airport security, but fail to deliver improved security, again and again.

Why is this?
We seem to be rational in the face of danger– no fire, no smoke, no fear. But we’re irrational when facing the unknown. We rely on questionable expert opinion rather than analysing the problems ourselves and coming up with workable solutions, we give in to FUD, which, far from solving problems, creates hidden problems.

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Customer seeking, customer tolerant, or customer averse?

 consulting, reviews, strategy, travel  No Responses »
Feb 092010
 

Averse, tolerant, seeking
Economists talk a lot about risk behaviour– to what extent indivisuals seek, tolerate, or avoid risk, and this goes a long way in explaining why people choose to do things.

An excellent post by Valeria Maltoni discusses the importance of realising when you’ve lost sight of your customers’ interests and feelings. This reminded me of an ongoing struggle I’ve had with United Airlines, and how they’ve shifted significantly over the last ten years– to their employees as well as to their end users.

The United Experience – 1990s
To be fair, it’s hard running an airline. I wouldn’t do it, but someone does. I flew United a lot in the 1990s, and the experience was as I recall a pretty good experience out of a series of terrible alternatives– the difference seemed to be in the individual pride and power of United employees– they answered the phone as “employee-owners” and would often go the extra mile for you, particularly if something had gone wrong that was clearly their fault.

United in the 2000s
The Noughties brought some slippage– and, to be fair, we had an enormous overall price hike in oil, the troubled aftermath of 9/11, and the bursting of the dot-com bubble. Depending on when and what desk you called, you were likely to be handed over to an outsourced call centre which would have mixed rates of effectiveness. I had a couple of really miserable experiences when I missed flights, but– and here’s the interesting bit– the employees at the gate still had the visibility and ability to make the right changes and sort things out. If you got a bad agent on the phone, you could turn up at the airport 30 minutes or so early and get things sorted.

That, unfortunately, is no longer the case.

United at the start of 2010
I recently flew United from London to Sydney via LAX, four flights in all. I booked upgrades on three of them, and was re-downgraded on two of those. Two of the four flights had bad entertainment systems, and the flights had different baggage allowances (I had 2 bags from Sydney to LAX, but then had to pay USD$50 for my second bag from LAX to London).

Now, there was a terrorist attack. I am 6’3″, so flying in regular coach is a bit of a nightmare, but it’s not the end of the world. I spoke to everyone I could– the boarding agent, the gate agent, the ticket desk, the reservations desk, and the phone-in reservation system, spending, all in all, several hours trying to figure out how to simply get the upgrade difference refunded.

Several of the older United employees were very nice and understanding, but they had neither the time nor the ability to effect the refund. The general feeling was rushed and overworked, and in every United queue I’ve been in there’s been low staffing levels, so everyone is a bit overwhelmed. The only interface to refund this money is a web portal, which promises a 7-10 day working time (at this point, it’s been six weeks for two different requests with no return contact. I’ve contacted my credit card company to request a refund from them).

The dangerous side of customer aversion
1) You alienate your customers — you make it less likely to keep customers coming back. I have a lot of miles on United and generally would book through them on US-based flights. Keeping customers should be easy, unless you kick them out.

2) You undervalue (and devalue) your employees — I’m sure that each anti-customer decision made economic sense when doing it– outsourcing, driving customers to the web, etc.– but the employees– especially the ones who are on the front lines– are the ones who your customers think of you as. When they don’t have the tools to do the right thing, are disempowered, and are the ones that the angry customer will shout at (something I try really hard to do, as I know what it’s like to be an exposed cog).

3) You stop being able to hear your customers — The biggest danger of becoming customer tolerant (rather than customer seeking), is that you cannot engage your customers in a conversation and you stop knowing what’s going on. Once you route calls through an external call centre, you have to spend more time, money, and energy to understand your customers, and you lose some organisational memory and networks which inform you about how your customers feel towards you. You’re probably going to forget to do it (as outsourcing is often cost-driven rather than customer-focus-driven).

If you’re an airline, you’re likely one of the few games in town, and you’ll still get customers. It’s funny, however, how Southwest, JetBlue, and Virgin America can come up from nowhere and gain so many customers so quickly– mostly by listening to customers and treating their employees well.

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Bad at something? You’re probably good at some aspect of it

 entrepreneurship, strategy  No Responses »
Feb 042010
 

Whole person education
I am not really a fan of sports. I was a drama and computer geek all through high school and university, and never really bought into the “whole person” education argument, at least until I could see the link between team dynamics in rowing and in companies.

I grew up in New Orleans, whose Saints are headed to the Super Bowl this Sunday. You can’t really come from New Orleans and not bleed black and gold– even the most die-hard non-sports people in my family and friends are all excited for this Sunday. The Saints have always been a decent all-round team, but have never really been very good at anything– generally better offensively, but aside from the Morten Anderson years, never a particularly strong scorers or on defence.

Until this last year.

The Change
I’ve been watching mostly highlight reels (hey, I live in the UK, and with no TV, it’s easier). I noted one thing: Every game talked about a defense who scores, and a team turning over the ball, a lot.

What they’ve done is picked (or identified) a core competetive advantage: The Strip. The Who Dat boys have decided that defence is not about stopping the team moving forward but about getting the ball back, which means knocking it out of the hands of the offensive players and turning it over. This has an enormous effect on the opposing team: They suddenly have to play defensively and in many cases the defense has scored.

The Saints are now the highest scoring team in the NFL.

What’s this have to do with business?
I know, sports metaphors are somewhat overwrought, and American Football metaphors are lost on my heavily-influenced UK/EU audience. Sorry about that. American Football works so well because it lends itself to analysis as it’s a play-by-play game.

Entrepreneurs (and up-and-running businesses): What are you good at? Do that.
The great thing about entrepreneurs is that they are on top of the world, and feel they can do anything. The worst thing is that, particularly in the early days when revenue is scarce and as deals fly by because they’re “not quite right”, they feel they can do anything.

Here’s the thing: If you’re a decent team, say, a consultancy, the temptation is to diverge from your goals and do too many things. Pick one thing that you do really well, and do that one. Do it well. Pass on work that isn’t quite right, or better yet, tell the potential client how you’d approach it within your own framework. Be unambigious about how the game is played– that you focus on the ball (metrics, change management, ideas-to-market, etc).

We focus at the intersection of ideas, people, and technology, building organisational capacity to bring products to market.

SoCap09: Strategy 101

 entrepreneurship, Social Entrepreneurship, strategy  No Responses »
Sep 032009
 

The Bottom Line
One funny thing about business is that everything that your uncle told you from your early days is wrong– I was told by most adults as I grew up that the bottom line is what counts. It’s true… to a sense.

Strategy professionals take a different tactic: Profits and the bottom line is oxygen. You can’t live without it. A strategy that chases profits at the expense of all else, however, will likely not produce significant profits in the real world.

Think about it. You don’t walk around saying “Where can I find some oxygen?” You move around pursuing your own needs– taking care of the kids, getting to work, minimising time stuck on the Tube, getting the right diet and exercise, and the oxygen is there.

What happens
Companies that pursue profits kind of die. They are too focussed on the short term. They dilute their core service offering and don’t have a core competitive advantage. Imagine if you had a company that cared for lawns. Your strategy is to pursue profits at the expense of all else, but what you know is lawnmower care, maintenance, grass growing rates, fertiliser application, and the transport and logistics required to care for all of this.

Someone comes along and shows you slot machines. These have higher margins. Your strategy is to make the most money possible. You sell your mowers, fire your people, and buy a bunch of slot machines and try to go round and put them wherever appropriate. You don’t know the licensing, bar owners, etc. This isn’t your business. What do you think your profits will do?

Imagine, now, that you have a different strategy: To make the most beautiful lawns in the city. You do your business well. All of your employees take pride in their work. Customers flock to you.

SoCap09
What I’m hearing at SoCap is a lot of thought about impact along with investment– and most of the most interesting people are, broadly, making this point. Figure out what effects you want to see (beautiful lawns) over profit, and find the best entrepreneurs (or social entrepreneurs) that you can to build these businesses, whether they are for-, non-, or aren’t concerned about profits.