Archive for August, 2009
Fertile Fallacies
Aug 31st
Recently while reading George Soros’ book on the Crash of 2008, he discusses something he calls “Fertile Fallacies” which I found quite interesting. The basic idea is that there is some knowledge that seems very true and early experiments in that information continue to confirm it’s veracity, but eventually the fallacy catches up with you and you end up in a situation worse than you started.
George Soros, regarded as one of the best or luckiest (depending on your point of view) speculative investors, wrote a book trying to codify, in part, his view of the world. He has been trying to be taken seriously as a business philosopher, but has struggled for adoption (see previous parenthetical statement).
Much of his point of view, relies on the fact that we are not able to full comprehend the complex systems around us. Our western thinking wants us to break every complexity into it’s component pieces so that we can study and understand it. This works well in some contexts, but there are many systems that can not be so simply reduced – Macoreconomics being one of them. One of the reasons is that, like the Heisenburg Uncertainty Principle, when we has humans start to understand a system that we are integrally a part of, that understanding fundementally changes the system. Douglas Adams, of Hitchhikers Guide to the Galaxy fame, stated this same concept: If one were to both know the answer to the meaning of life (42) and the question, then everything would suddently changes such that those two facts were no longer true.
Back to the term “Fertile Fallacy”, it is a type of knowledge that creates first a self-reinforcing cycle, and then subsequently a self-defeating cycle. For example, look at the most recent set of mortgage problems: Lenders noticed that real estate prices tend to only go up. Once you make this assumption, it allows you to start offering increasingly risky loans to home buyers, because even if they default, the home will be worth the same or more. Once you decide this as a lender, your knowledge creates a self reinforcing cycle, more home loans equals higher home prices, but eventually the falacy is reached, the end of the ponzie scheme is attained, and the number of buyers in foreclosure starts snowballing – thereby creating a self defeating cycle. Banks don’t want to or can’t lend money to buyers who are willing to pay the current prices, which only causes the prices to slip further, causing the banks not to be able to lend money, etc. Think about this for a second, when banks were coming to the understanding of the real estate market, they DID NOT understand how they affected that market!
Soros points this out as a critique of Perfect Market theory – that we will always strive toward equilibrim. The problem of course is that we are limited and falable, and that when we think we know something, it often ends up creating some success followed by catastrophic failure.
As thought leaders, we simply don’t have all the answers. We strive to make sense of the world around us, but need to know our limitations and not bet the farm on things we think we know for sure, and instead be continually striving for the understanding of our own fallacies.
Focus Management
Aug 29th
How many times has someone asked you about an action that you committed to and you responded: “I’m sorry. I haven’t had time to get to that yet”. Many of these tasks would take only 5 minutes or less to do, so are you really saying you didn’t have 5 minutes to perform this task?
Our world is certainly limited by time, but I believe that it is even more limited by focus. As information workers, we are expected to be able to maintain and perform a wide variety of functions in our jobs. Each of the hats we wear, requires us to spend focused energy to understand the problem and subsequently spend our time on those items.
We can only focus on so many different stimuli before we get the deer in the headlights look at the sheer amount of chaos bearing down on us. Subsequently, our effectiveness is decreased and instead of recognizing the cause — lack of focus, we typically attribute this to lack of time.
Why does the squeaky wheel get the grease in most organizations? Most of the time we think this is just to make the whining stop, but I think it has a whole lot more to do with the organization needing to know which problems to solve first — it allows them to focus on a specific problem amid the morass of tasks awaiting their attention.
As organizations, as leaders, and as friends, we would do well to manage our focus even before we manage our time. To understand our limitations of focus and recognize that even though we have the time to spend on a 5 minute task, we may not have the focus to make sure that it gets done.
Kings & Marketing To Perceived Desire
Aug 28th
Earlier this spring, NBC announced a new show called “Kings”. They advertised it heavily, trying to build momentum for a show about what life might be like if we lived with a modern monarchy. I saw the ads and had little interest in watching (or even DVR’ing the show) and I wasn’t alone. The show ended up only having about 3 episodes in prime time before they tried moving it out to Saturday, they had one show on Saturday, with apparently such abysmal results, they put the remainder of the season to bed until the summer, with no chance of renewal.
At some point, however, I decided to watch the first episode on Hulu and was surprised by the quality of the story line, the acting, and the environment they had created. This was good entertainment, but no one was interested in it enough to start watching it. Why did a show with good quality fail in the marketplace, even with a great amount of advertising and push?
The reason: People look for entertainment that matches a category in their mind or triggers curiosity. How many people when you mention a story about a modern monarchy get excited? There is little attachment to this kind of story, it’s not something we go around wondering about. We know what dictators are like. We know about the Monarchy in England and other European countries. It sounds uninteresting at its very core, and with so many other things to entertain ourselves with, it gets very little attention. Clearly, Americans would rather watch about 20 different variants about grisly crimes being solved by forensics, or psychics, or insightful detectives.
It’s clear that Kings needed to match a pattern for what people were already looking for in their entertainment (perhaps they could have had the King solve a robbery turned double homicide 
. When it comes to advertising our products, we have to match some pattern that the customer has in their mind of what they want.
Someone once used the analogy that when someone walks into the hardware store to buy a drill bit, they are really going in order to buy a hole. There is some wisdom that can be extracted from this (namely, understand the job your customer is “hiring” your product to perform), but many people walk into the hardware store to buy a hole BY buying a drill bit. If you have a new product WonderHoleMaker, right next to the drill bit, how many consumers would even notice it, much less buy it. When our customers have in mind what they want, even if there is a better way, they are far more likely to stay with what they know and to buy what they think will solve the problem they are having.
If you have something that is a brand new way of doing something, whether it’s entertainment or a WonderHoleMaker, you must find a way to connect this to what people are already expecting and looking for (maybe include a crime in the shows first episode, or include a free drill bit). This allows people a smooth path to transitioning over to the new way of doing something.
Without building the bridge, however, you’re likely to find your best new product, cancelled.
Target Your Customer Not The Public
Aug 27th
Yesterday, my colleagues and friend sent out a link with the title: highly effective marketing. On top of being one of the best software architects I have ever worked with, my friend is also an avid guitarist and wood worker.
I watched the video with zero knowledge of wood working and was shocked by the lack of action. I waited for the full two minutes thinking that there would be a punch line, but alas, there was none. It was suprising enough that I wondered if my friend was joking about the video, but also wondered if I lacked some context to understand why this was interesting. My reply email might have compared the video to watching paint dry. My friend graciously explained that this video is astonishing to the wood worker because getting these kinds of results from a planer are astounding to watch and way more effective than words.
The result is that this vidoe is not trying to sell me, a non-wood worker, on a planer. However, to the wood worker, simply watching this person effortly create paper thin slices of wood is jaw dropping and the simplicity of the video only adds to its effect. After having this additional knowledge, I can see that this video does a good job caterring to its audience rather than making it interesting to me. This video would have felt differently if it had been done used car salesman style with lots of voice over, dramatic music etc. While I, the public, might have found it more interesting and understood more, the impact of the video to their target customer would have been significantly reduced.
Know what your customers are looking for and cater to them. Don’t be afraid to be “boring” to the public especially if you can utterly astound your customers.
The Context Matters
Aug 26th
A couple of weeks ago, while visiting Colorado, I noticed a number of people advertising their businesses on their cars to varying degrees of success. It made me think that while you do get a lot of people looking at your “ad”, you are also providing a lot of context about your company based on the car you are driving and the message of the ad.
Here is one example:
Ken has an antique stripping business and he drives a van that is partially stripped already. My guess is that most people who have “old” furniture that needs refinishing cheaply might call Ken, but anyone looking for valuable “antique” refinishing, is not likely to call Ken based on this advertisement (and also might be frightened when he showed up to pick up the furniture.) He gets his information out there, but the context seems to be a belittle the message.
Here is another example:
Coidco is in the business of doing “Corporate Identity Consulting”. This is the guy you turn to when you need a new image, when you want to establish your brand to take you to the next level, when you need to be identified differently. The first question I always look for when considering a marketing consultant is, “How does he market himself”? So, how is Coidco doing on it’s identity. So, they called their company Coidco. Doesn’t exactly roll of the tongue and the sounds that it makes sound something like coy, cod or an awful lot like void. Not exactly the best connotations going with the non-word they creatively constructed from the first two letters of each of the words in their slogan. So, creative branding doesn’t seem to be their strong suit. All of this finally ended with his dog and kennel in the back of his truck. Perhaps they do a great job on other people’s identities, but they should probably do a little more work with their own.
Every time we decide to send out a message about ourselves or our businesses, the context matters. Information simply does not exist in a vacuum, and if the context conflicts with the message, your going to confuse your audience. That said, these two both managed to be remarkable, and as some would say, any press is good press.
Terminator, Attention and Storytelling
Aug 25th
This last week, we went and watched the latest Terminator movie. Essentially, it takes place after the machines are trying to kill all of the humans and ends up providing more of the backstory to the previous two movies.
In the movie, there are several fight scenes that take place in factories where the robots are manufacturing themselves. Suspension of disbelief aside, I had to step back and think about how a machine might design a factory for its own reproduction and would it looks like this particular set. It was clear they had designed the set to resemble as closely as possible how we (humans) might design a factory for such a purpose — namely, there were many, many hand rails. Now it’s possible the T-800 needs to catch it’s balance sometimes, or occasionally missteps off the edge of a platform and needs the railing to catch on to, but it seems more likely the machines would designate those as wasteful.
However, if they had designed the set to truly project what the robots would likely design, it would have been a very uncomfortable environment for the audience. Rather than drawing their attention to the action sequences (that, of course, used the railings to very dramatic effect), we would be drawn to the sheer difference in the way the factory was designed.
This got me to thinking about the large-scale implications of story telling. There are many aspects of a story that might be interesting (i.e. the exploration of how a factory would be designed by an artificial intellegence), and yet, these would cause a great amount of distraction to those being told the story. The unimportant elements need to fade into the background and be boring/dull by comparison to the important elements of the story.
This applies to any of us who are telling our customers stories about who we are or how the product is beneficial. The story needs to focus the attention of the listener on the elements that are helpful to the comprehension and full emersion into the story, and avoid the Curse of Knowledge by mentioning all the unimportant details along the way.
Seeing Through The Facade
Aug 24th
Everyone has a front, a facade, a face they put forward for the world to see. It’s how they want to be perceived by those around them. If the front differs from reality, reality will be discovered. This is particularly true with companies that have many customers who have a megaphone (i.e. the internet). You’ll hear a lot more of the truth than the marketing facade reveals.
People also carry around a facade. Where that front is based on truth, you find something whole, something trustworthy, something authentic. When that front is based on falsehood, it will be discovered eventually. Often times though, it’s difficult to penetrate the facade and discover what is real. This is especially true if it is someone that we only meet for a brief period of time.
Someone may carry themselves as though everything is always going perfectly for them. They give off the facade of uber-confidence and alway seem to know the right answer. If you meet this person, you might be tempted to believe them, but usually these people are some of the most insecure people out there — quickly wounded by the slightest remark contrary to their facade. It might appear that everything is going right for them, the truth is that it rarely is.
If we buy into the facade’s that people put before us, it can create false conceptions about how others experience life different from our own. The same is true with our competitors. Just because it looks like they are hiring and growing, doesn’t mean that they actually are. If you buy into the false facades of others, it can cause you to think less of your own business or person. In these situations, to perceive properly, you must see through the facade and understand that outside of very intimate relationships, you don’t see the whole picture.
Moreover, If we want to both understand and ultimately help those around us, we must endevour to see through their facade. We must truly seek to understand them prior to passing judgement or becoming deluded, as they are, with how they appear. This often requires simulating the reality around them to understand that things really aren’t perfect and know that what you see on stage may have little correlation to what happens when the curtain closes.
Created to Perceive Change
Aug 21st
Over the years, in a number of locations, there is a common theme to the way our senses were created, namely, that they sense change. Here are some examples:
- Touch - Classic experiment, take one hand put it in a bucket of cold water, another in a bucket of hot water and let them sit for a couple of minutes, then put both hands in the same bucket of lukewarm water – The result, one hand feels cold, the other warm. An example with less setup, is to touch something like your trousers, you’ll be able to sense the texture, wait 30 seconds, you probably don’t even sense you are touching something any more.
- Smell - The mere fact that anyone lives in Greeley or even visits there. The reality is that it stinks, but only for a few minutes, then you stop noticing it. [and to be fair, it doesn't always stink in Greeley]. This is also why there are now air freshners that change the scent every 30 minutes.
- Taste - The first bite of ice cream is usually the best bite. The last bite usually doesn’t have nearly the flavor that the first one did [though it's usually still quite enjoyable]. If you eat lots of salty food, you won’t notice it as much as someone who does not eat lots of salt.
- Vision- There are several examples of this (like looking at a map that has color and then moving over and looking at a white sheet of paper and seeing an echo of the previous image). Another book I read mentioned that, while it’s almost impossible to do because your eyes make small movements continuously, if you stare at something without moving your eyes, it will slowly become gray.
- Sound- Ever had the electrical power die in your office. The silence following all of the computer fans turning off is shocking. Yet, your probably didn’t realize just how noisy your work environment was.
But it’s more than just our senses, it’s also what we pay attention to. Things that are moving, changing draw us in, things that are static get moved out of our awareness. This is why video is such a compelling media – it draws in our ears and eyes to pay atttention to a nearly continual set of changes. This is also why when your screen saver turns on and you are talking with your collegue, they suddenly look over your shoulder and have a hard time maintaining eye contact.
We can use this to our advantage however. If we want to make sure we pay attention to something, we need to make sure it doesn’t just blend into the background (ever put something by the door so you don’t forget it, you’re already making use of this). If we want our customers to notice our product, it can’t just be the same as something else that we’ve also become accustom to. If you want to have a fresh experience for something that you do all the time, find a way to vary it.
The Sandpaper Effect
Aug 20th
There are many occasions where the first time something mildly annoying happens, we simply let it pass. It might even be novel or amusing, but gets increasingly less so as time passes. A joke that is told once is funny, second time, meh. Third, forth, fifth, sixth times it just gets increasingly annoying.
The same thing can happen in our customer experiences. For example, the first time I called Comcast to cancel service, the automatic phone service hung up on me. (This is a pretty common experience apparently). Anyway, this first response was novel, even amusing, but each subsequent misstep by Comcast (sending me to a building that was having the furniture moved out of, then sending me on a wild goose chase in a strip mall to find the new building, etc, etc. This makes me start using their adjective “Comcastic” as they define it by their actions, “An incredibly frustrating experience”. Oddly though, each of these actions individually is frustrating but manageable, the problem is when they are put together they create some rather irrate customers.
I call this “The Sandpaper Effect”. The first time you rub sandpaper against your skin, it might even feel good. The second time, not so much. By the twentieth time, you cringe at the very thought of it happening again. It’s the same mild frustration in your user experience (someone who calls your office every day and has to listen to a 1 minute speech about your changed menus before they can get where they want to go). Not a problem on day 1, day 10 though they are about to want to start looking for someone else to do business with, all over something as simple as a phone message.
User Interfaces can be the same way. Sometimes a tool behaves in a way that at first seems like, “Wow, that’s a lot of clicks”, but over time, just like sandpaper, it starts to be dreadfully painful. Ironically, often times, these things can be easy to fix if we are in good enough communication with our customers to hear them. But just as often, the customer feels a sense of learned helplessness – there is nothing I can do to change it, so I just endure it (and get more and more upset at the “aggressor” in the process).
In business and in relationships, we need to be aware of things that are initially mildly annoying to our partners and friends before they become such big issues that we are being avoided. Ask your customer if there are things in their user experience that they wish were better, even something small.
If you can resolve their pain (even pain you caused) adding salve to the wound, you’ll have an even more delighted and committed customer.
The Challenges of Growing Big
Aug 19th
How much money did you make for your business last year?
If you are an entrepreneur in a small business (or in sales), the number probably pops in your head right away, or at least a method to get there. If you work in a large organization, you probably don’t know and don’t even know how you could know.
How does this impact what you focus on?
In a large organization, each individual is highly specialized in the task that they are assigned, often with little ability to measure the impact they are having on the entire organization. This lack of connection causes people to seek two things as a measure of their success: management approval and peer approval. If both their management and their peers think they are doing a good job, then they must be doing a good job.
This is maybe a good proxy for whether you genuinely are doing a good job, but it creates several counter productive effects.
First, it becomes inbred. Since everyone is looking only for the approval of those around them, people grant their approval without having a measure of true success. This causes people to focus on the wrong things, or to do what the group seems to be most happy with.
Second, blame avoidance becomes king. This causes large organizations to be inherently less risk taking and as a result, less innovative. People aren’t rewarded or encouraged to step out and do something that might pay off big, because if it doesn’t they earn disapproval, and if it does, there is not a commisurate payoff for the risk that one takes.
Third, silos are created. Since your peers and management tend to define the reference group for success, the result is that there is little to no incentive to help other organizations outside of that group out. Generally, kudos are given for the work in your reference group. This can be so much the case, that at one large company I was working for, people wouldn’t ask me directly for help, they would ask my management to ask me to help (which always frustrated me as I would have been more than willing to help them, but I digress).
There are those that don’t buy into the above logic and really do strive to do what is best for the business as a whole rather than focusing on only what benefits them most in the immediate term.
If you are working in a large organization, you’ll find you get much further by trying to see beyond your reference group and work toward the company good (in part because so few others are).
If you are managing a large organization, recognize and reward those who are doing what’s right for the business and taking risks.