Which do your prefer – happiness or trust?

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Photo by yewenyi

Today in our marketing class we talked about customer’s happiness and trust. If you create a simple 2 by 2 matrix you can allocate your customers to 4 groups. Then you need to think about how you treat each group and what the reasons for the existence and size of each group are.

And that got me thinking about transferring the same kind of measurement and thinking process to other arenas. Let’s think about politics. If you are a president or a prime minster, what is more important – that the citizens trust you or that they are happy with what you are doing? Or think about being a manager – do you want your employees to trust you or do you want them to be happy?

I know that trust and happiness are interrelated. I also know that the definitions are not completely clear. But life (and leadership and management) is about making decisions in a scarce and uncertain environment. And when your resources are limited you are faced with the choice of what to concertante on.

If I was a marketer, I think I will concentrate mainly on happiness. But as a leader and a manager of people, I would go with trust every time. In the marketplace of the consumers – happiness will generally lead to trust. In the leadership sense, happiness is important – but doing the right things and making the right decisions is a way that will lead to trust, is even more important. The trust will lead to happiness.

Leaders and managers need to make tough choices even though their followers will not always like it. In a book I am currently reading called: “The last argument of kings” one of the characters uses the phrase: “One cannot be a great leader without a certain … Ruthlessness”. I believe this is true. First create trust in your vision, in your cause, in your decision making. First create respect. Happiness will come.

What do you think is more important? Happiness or trust?

Elad

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Revisiting averages…

I was listening today to a podcast from the Mckinsey Quarterly titled “The Granularity of Growth“. The basic idea is that in an industry, not all companies, segments and products have the same growth rate. Which is of course, obvious. However, when so many times we use the term “average growth rate of an industry” in the decision mechanism, this realization holds many implications. Not only does the range of the growth in the industry vary, but it is also internally skewed across the segments, a fact that could lead to different decision regarding acquisitions and new ventures & products.

That made me think – where have I heard this concept before? And it immediately came to me – Hans Rosling’s amazing talk about statistics, where he takes Africa’s average GDP and breaks it into different countries that are so varied and different from each another, that just talking about “the problems of Africa” becomes immediately inaccurate. And again, this has many practical implications.

This led me to what companies do all the time. Look for the average customer. I already discussed some of the implications of such thinking. But a few of the discussions in our latest marketing classes and a case we are working on, crystallized it even further for me. “Our average customer”. “The average satisfaction rate”. Very dangerous concepts. Because by responding to the average, we are missing the different groups that have different characteristics.

Average is easy and convenient to use. It is intuitive for us to grasp. However, whenever you see an average, you should be suspicious. You should ask yourself – does it really represent the full picture or does it create a middle category that does not really exist?

Beware of the average, I know I started to.

Elad

Lessons learned through a discussion of the Amazon-Zappos deal

Last week as we heard the news of the Amazon-Zappos deal an on-line discussion started between a few of my fellow students at the AGSM MBA. We discussed whether it was a good idea, what will the effect of it on the culture of the two companies, etc.

Amazon has always been a company I admired (and had some very good customer service experience with), so I was glad that as part of the discussion and even more glad to come by this movie clip of Amazon CEO and founder (Thanks Amit). You never know how much of what the CEO is actually saying is happening in real life. But, there is no doubt that Amazon is a success story. And I think that the principals they stand for and Jeff Bezos is presenting in the video are very similar to things I write about a lot in this blog.

Obsess over customers (not over competitors) – I love this approach. First, because it takes the company out of the regular We (or I) culture. As humans we attribute to much importance to ourselves in the mind of others. And this translates to companies’ strategies and tactics that focus on the company and not on the customer. Nobody really cares about company X. People care about themselves. But the second part of this concept is even more important. We spend so much of our lives comparing ourselves to others, using benchmarks, thinking – I want to be like him/her. We forget to be ourselves. We forget to excel at what we do. We forget to exploit our comparative advantage. Instead of focusing on them, we should focus on us. And I know what you are thinking. Isn’t that a contradiction? You just said that we should stop with the culture of we. Well it isn’t. They can co-exist. And anyway, F. Scott Fitzgerald famously said that “the true test of a first-rate mind is the ability to hold two contradictory ideas at the same time”.

Invent – There is no doubt in my mind that the need (and ability) to invent is and will be the hallmark of successful people and companies in our changing world. Not only invention of new products but also of process, of business models, of ideas and of sharing mechanisms. A company that puts invention as its core belief represent, in my mind, a great manifestation of everything that is good in the capitalistic system.

Think long term for customers not according to customers – Again, two very strong ideas. Long term. The financial crisis has proved, if any more proof was needed, how important the idea of long term thinking is. Again, it is a manifestation of a very basic human trait that is discussed a lot these days. The need for immediate gratification. I hear about the Gen Y phenomena and the fact that people today are looking for immediate gratification and I involuntary cringe. This is not something we should celebrate. This something we should avoid. I think mentioning the famous marshmallow experiment is enough to make my point. Patience and perseverance, in the business world are essential. The second part of this concept is about customers and that they don’t always know what they want. Listen to your customers, but don’t be entrapped by them.

And not less important: “it’s always day one”. There is always more to learn, discuss, improve and question.

Elad

A good reminder

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Photo by kkimpel

I have been working on a very complicated presentation that I am planning to give to my AGSM MBA cohort. I already put many hours in preparing it and thinking about it and I felt I had it almost fully prepared. But, I felt something was missing. So, I posted on my blog (not this, the other one), and asked my readers for some help.

I was astounded by the amount of responses I got (as comments on the post, to my e-mail and in Facebook). But one of the responses really took me off guard. A good friend of mine wrote that the most important thing I should do is tell a personal story. So simple, so true.

I thought to myself – how come I haven’t thought about it? I read blogs about presentations all the time. They talk about the importance of stories constantly. I help people with presentations.  This would probably have been my first advice to anyone. But I didn’t think about it.

Three conclusions from this story:

  1. It is always a good idea to try and learn. Even if you think you know everything already. Even if you are the expert. Sometimes you just need the reminder. Sometime it something that is so clear and obvious to you, that you just forget about it.
  2. The power of social networks, even one as small as mine, should not be ignored. It is so easy to ask for help today, we just don’t use it enough. Use it. Throw a cry for help out there. Let’s see what happens.
  3. If you are going to prepare a presentation, no matter in what forum and on what subject, putting a personal story is a good idea. If you have no personal story, just use a story.

Elad

Seth is wrong

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Photo by Daquella Manera

Well, maybe it is not very creative. Maybe I am an imitator. But some of the most successful people in the world built their careers on imitation. What am I talking about? The title of this post, is a spinoff of Seth Godin’s post titled: “Malcolm is wrong“. In that post Godin said that it doesn’t happen to him a lot. For those of you who follow this blog, you might know that this does not happen to me a lot too

But I really think he is wrong. What I am talking about. Godin’s post: “Wining on the uphills“. Here is the gist of it:

The best time to do great customer service is when a customer is upset. The moment you earn your keep as a public speaker is when the room isn’t just right or the plane is late or the projector doesn’t work or the audience is tired or distracted. The best time to engage with an employee is when everything falls apart, not when you’re hitting every milestone. And everyone now knows that the best time to start a project is when the economy is lousy. Most of your competition spend their days looking forward to those rare moments when everything goes right. Imagine how much leverage you have if you spend your time maximizing those common moments when it doesn’t.

This is not a sustainable strategy. If all we do is try and concentrate on trying to fix something that we have broken, even if we do the best fixing job possible, in the end – the customer will give up. If you get me upset once and fix it – you will buy my loyalty. If you constantly make me upset and then fix it, I will go somewhere else. I am willing to settle for a little less to avoid the trouble.

The focus should not be on the rare moments when everything goes right. It also shouldn’t be on maximizing those common moments when it doesn’t. It should be on making sure that those rare moments, when everything goes right, are not rare. That they are the standard. This, off course does not mean that a recovery plan in case things go wrong is a bad idea. But each and every such occasion should be directed to making sure you won’t have to go to your back up plans. To making sure the systematic failure is fixed. To making sure that the moments everything goes right are not rare.

Don’t fix problems, prevent them.

Elad

Dashboards

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Photo by dawnhops

I have touched the subjects of information, vital signs and the right way of measurement many times in this blog. That is why I rejoiced when I saw a post by Seth Godin titled: “Dashboards“. The idea is to create new and improved ways to present important information in real-time. Godin presents it from a marketing perspective. But it is just as applicable from a manager’s perspective.  An interesting quote:

Or consider the ambient dashboards that have been built in surprising ways. One company put pinwheels on a VPs desk. When sales went up, the pinwheels spun faster.

Just curious: what do you think would happen to energy consumption if every car registered in the US was required to have a digital mileage readout installed?

Imagine that you could sit at your table and see how each and every one of your employees is doing… that your dashboard will be able to show you the vital signs of your organization and employees. Imagine that your employees could see it as well, and get an instant validation for their efforts.

Of course when we design these dashboards we need to think about all the challenges that were mentioned in my other posts and in Godin’s one. What do we measure? We should be careful not to measure something just because it is there and available. We should think of the affects that the dashboard has on our decision and frame of thinking. Taking Godin’s example: do we really want to put sales as our vital sign? How will that effect decision making?

Challenges notwithstanding, I am pretty sure this is where management of people is going. Not only balanced scorecards that are discussed every quarter, but continues attention to details in real-time. The questions that this approach will raise cannot be predicted. We should especially be careful from short term attention this could create. But I am confident, that it will help us create a much needed culture of greatness.

Elad

Who is to blame?

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Photo by Martino!

The problem is not that there are problems. The problem is expecting otherwise and thinking that having problems is a problem. Theodore Rubin

Yesterday I was reading an excerpt from the book “What You Don’t Know: How Great Leaders Prevent Problems Before They Happen”, published at Knowledge@Wharton. In it, the writer Michael A. Roberto advocates that a big part of leadership is about preventing problems before they occur.  The book starts with an example from the engineering world. This is how it is recapped:

These two stories provide a stark contrast in the handling of information suggesting that a potential problem exists. The managers in the Kansas City hotel case dismissed the concerns of others and reaffirmed their belief in prior judgments by experts. Who were these construction workers to suggest that engineering experts might have made an error? William LeMessurier approached his situation with far more intellectual curiosity. Intrigued by the questions posed by a young engineering student far less knowledgeable than he, LeMessurier chose to perform additional analysis. In time, he began to question his earlier assumptions and judgments. He chose to pursue his concerns and obtain the perspective of unbiased experts. LeMessurier represents the quintessential problem-finder. He did not simply assume that his expert judgments were correct. When he detected trouble, he dug deeper. He wanted to understand the nature of the potential problem. He did not seek to assign blame to others, nor did he let the possibility of a disturbing answer suppress his investigation. LeMessurier clearly approached his situation with a very different mindset than the people involved in the Kansas City hotel tragedy.

This passage immediately reminded me of what I wrote about in this blog yesterday – the “Toxic Tandem“. People in positions of power tend to be oblivious to the needs and actions of the people who have less power than them. Look at the bolded sentence in the quoted paragraph. “These construction workers” are the people who actually do the job. They are the people who walk the walk every day. They might be wrong, but ignoring them is not only dangerous, it is just bad management. But more importantly, you need to go out and seek them out. To hear them. To listen to what they are saying. Because they don’t always come to you. In yesterday’s post I emphasized this from managers’ perspective. Because people are the managers’ job. This excerpt actually gives a different reasoning: “You do not discover problems by sitting in your office waiting for the bad news to arrive at your door”.

The second paragraph that appealed to me was dealt with assigning blame:

Successful problem-finders not only exhibit a curious mindset, but they also embrace systemic thinking. They recognize that small problems often do not occur due to the negligence or misconduct of an individual. Instead, small errors frequently serve as indicators of broader systemic issues in the organization. Effective problem-­finders do not rush to find fault and assign blame when they spot a mistake being made. They step back and question why that error occurred. They ask whether more fundamental organizational problems have created the conditions that make that small error more likely to occur.

In Hebrew we have a term called “תחקיר” (Thachkir). The official translation into English is the word “debrief”, but this word means other things as well. In Hebrew it only stands for a discussion of an event after it occurred. The Israeli Air-force is known around the world for its implementation of after the event debriefing. I actually used to teach about it while I was serving in the Air-force. The main idea is that the recipient of this debriefing is the system and that blame is not part of the process. The blame is part of a different process. This is done in order to eliminate the fear of the consequences. You try to understand what happened, why, and how to prevent it, without asking who is responsible for what happened on a personal or organizational level (“the marketing department”). In the Israeli Air-force this is done regularly after every event, accident, exercise, etc. This is something I think should be, in some senses, better implemented in the business world. Stopping and thinking about why things happened without questioning the specifics of this case and who is to blame but by thinking about the process and the future. About the bigger fundamental organizational problems. This is hard to do in the day to day mess we are handling. But doing so, helps prevent problems instead of solving problems.

Elad