one basic tenant of business success

Technology should simplify and make things easier for the customer/end user. There’s really no other purpose. Technology for the sake of technology is, well, annoying at best. But then anything for the sake of itself is inefficient, ineffective, and dumb. Case in point: my  local newspaper recently ran an article on a program to encourage shopping at local businesses.  It sounded like a cool program, but if I wanted to find out more about how to participate or which businesses were involved I had to either go to a website or use my smartphone to scan a QR code. Dumb, dumber, and desperate. Too much, too late.

I get that this is a multimedia world, but there is one basic tenant of business success that should never be overlooked: make it as easy and simple as possible for customers to give you their money. Amazon, Apple, etc. are all great businesses, but their genius is (say it with me) making it as easy and simple as possible for their customers to give them their money. It’s not the books that set Amazon apart, and I’d argue that it’s not even really the prices (although those help), it’s that they make it really freakin’ easy to buy a book. Ditto iTunes. This is really what innovation is all about – making it easier for people to solve their problems (even the problems they didn’t know they had).

There is a minimart/gas station near my house that I buy 80% of my gas from even though it is 1) out of my way; and 2) more expensive. So what’s their competitive advantage? I don’t have to pre-pay. I can pull up to the pump, fill my tank, grab my favorite source of carbonated caffeine, pay all at once, and leave. Every other place makes me pay first, which means that I either have to do two transactions, and, if I’m paying cash, walk back and forth to the cashier a couple of times. I will pay more because they have made it as easy and simple as possible for me to give them my money.

So the newspaper, in a very misguided effort to be relevant, has made it more difficult for me to get the information I need. I instantly stopped caring about a program I’d otherwise be curious about. Them forcing me to go to my phone is just as silly as, say, Amazon’s Kindle telling me to go find a dictionary when I ask it to look up a word. But we can learn from this editor’s mistakes. In an ideal world, everyone would be forced to  voluntarily use their own products and services to experience it from the customer/end users point of view.

If you’re in HR, just how easy is it to apply for a job at your company? Are there any hoops you’re making folks jump through that could be put off until later? (For example, do you really, truly need to get everyone’s SSN on their initial application? Here’s a hint – the answer is no and you’re driving away top candidates if your automated process insists on it.) Do you actively seek ways to make it easier for candidates? Do you explain the process to them up front? Do you keep them informed and regularly updated on their status or do you force them to waste their (and your) time by initiating all communication with you?

If you’re a small business, do you accept all forms of payment? If you can’t process credit and debit cards, you’re not really serious about being in business. (No, seriously, these businesses exist.)

If someone calls your business, do they talk to a person who can actually resolve their problem/concern/request/order/desperate attempt to buy something from you? Or, and I’m thinking about the freight company that made a concerted effort to not deliver my new bicycle, do you have an automated voice “recognition” system that doesn’t actually recognize voice commands and eventually connects you with a minimally trained and hard to understand person who insists on reading the script even when the script doesn’t apply?

Does your website load superfast and is it easy to navigate? No matter how cool the graphics are, many of your potential customers have about a 1.6 second attention span. Too slow? Too hard to figure out how to get the right info? Good bye.

Examples go on and on. The principle is simple, but easy to get wrong when we think about what would make the shopping/buying/applying/etc. process most easiest for the company instead of what would make it most useful to the customer.

 

 

innovation leads to failure leads to innovation

People tell you that you should be creative and innovate to get ahead of the competition. What they don’t tell you is that creativity and innovation lead to failure. That’s right failure.

Whenever we try something different it is probably not going to work, particularly the first (few) times. It will fail. True innovation comes from learning from that failure and tweaking and experimenting and playing with it until it works.

When developing training programs, the bulk of the work is done in the back office. But the magic happens in front of a group of participants. I rarely have an insight on how to improve wording or flow when sitting at my desk. Some of my biggest breakthroughs have been from failing in the field – forgetting what I was going to say, getting ahead of myself and presenting the sequence out of order, or getting a question that I didn’t anticipate. Getting it wrong, recovering, and seeing how it can be even better leads to huge gains.

Thomas Leonard, considered by many to be the father of personal coaching, used to intentionally overload systems and processes to see what would break first. Then he’d correct that and overload it again. This allowed him to quickly understand what worked, what didn’t, and to create airtight processes.

In the mid 1980’s Suzuki developed a groundbreaking sportbike – the GSX-R. To make the engine lighter than many thought was possible, the engineers would shave weight from a part, test, and shave more weight until it failed. Doing this over and over with each component taught them the lightest reliable weight each part could be.

The problem is that we usually try something new and when it doesn’t work we deem it failure and give up. But each failure holds a lesson that we can use for improvement.

If we’re willing to learn.

how to instantly create buyer’s remorse

Last night I spent (way too much) time looking for a set of pedals for my new mountain bike. I finally tracked down a brand new set I wanted on ebay in a color that was ok and at the cheapest price I’d found anywhere. I could “Buy It Now” and get free priority shipping. Awesome. Yeah, ebay!

Then, right after I completed the transaction, the bottom of the page filled up with suggested items. I forget the heading, but it was something like, “You might also be interested in…” The VERY first thing shown was the same brand and model of pedal, in the color scheme I really wanted, for less. Three seconds ago I was happy and satisfied. Now, I’m irritated and kicking myself for not finding it in the search. Too late. Instant buyer’s remorse.

why are your employees leaving you?

A friend posted this on Facebook recently: “People don’t leave because things are hard. They leave because it’s no longer worth it.”

I tried unsuccessfully for three or four seconds to track down the source, but it seemed to be anonymous. Most of the places I found it were using it as relationship advice, but the first thing I thought of was leadership and employee turnover.

It’s not hard work or tough situations that causes good people to quit. It’s rare that people find easy, simple work satisfying or fulfilling. Think back to the times when you were most satisfied and fulfilled at work. Chances are you had recently earned a hard fought success, pressed hard, stretched your abilities, and just generally kicked booty. Think back to the times when you were just coasting along – how satisfied were you? People don’t leave because work is tough. People leave because the upsides don’t balance the downsides.

They leave because of fire drills, knee jerk reactions, lack of appreciation (or even acknowledgement), thankless efforts, frustrating co-workers, stifling bureaucracy, arbitrary decisions, favoritism, patronizing attitudes, harassment, and even apathy. When people leave because of “more money” it is often not about the money. The extra dollars are nice, but what they’re really saying is, “I don’t get rewarded enough to put up with this job (and/or my manager). This new job looks like it won’t have these headaches and, even if it does, I’ll at least be paid more to deal with it.”

If you’re experiencing unwanted turnover, the question to be asking is: “What would make it worth it for people to stay?”

 

 

but does it work in your world?

We human types like to evaluate, compare, analyze, and decide in order to have the very best. This, by the way, is a good thing. Except when the data doesn’t reflect reality. After all, even most exacting logic fails us when a base assumption is incorrect.

Comparison tests for whatever you’re interested in are fun to read and give you a starting point when determining what’s “best”, but are not in any way an absolute indicator of “bestness” (no matter what the magazine wants you to think). A skilled rider on the worst motorcycle in a comparison would slaughter a mediocre rider on the best motorcycle. Every time. Ditto for bicycles, cars, etc. Engineering and manufacturing have gotten to the point where there are truly few lemons and magazines are forced to pick winners based on relatively irrelevant data.

Case in point for results not reflecting reality. In a recent comparison in a popular mountain bike magazine, five bikes were evaluated and a definitive rank order given. Except that, based on the comments, #3 would have leapt past #2 with different tires. Additionally, #4 was hurt by grips, seat, and other minor items. These were $3,000 bicycles and no one willing to drop that much cash on a bike is going to leave it stock. So 4th place (loser!) could be fixed for a relatively small amount by replacing or adding parts that are 1) relatively inexpensive; 2) often replaced anyway based on personal preferences; and 3) would still give the bike a total out-the-door price that’s less than 1st-3rd place. These results are meaningless! [Fourth place bike? Wouldn’t touch it. What? I can make it comparable to the top bikes and it still costs less – done!]

So what’s that mean in business? A few examples, though you can probably think of many more.

  • Personality assessments used in hiring are generally highly overvalued. Whereas they are very useful for development, they rarely provide much useful information for hiring. Sure there’re pretty graphs a and comparison ratings that make us feel like we are really comparing hard data. Just like with magazine comparisons though, they are pretty good at identifying the outliers to avoid, but just don’t give any definitive answers to compare normal folks. [This person is a “7” on sociability versus this other candidate’s “6.5”. But which can do the job better? How much sociability is required? How much is too much? What other personality traits would balance a low or high score? How do you know? How do you really know?”]
  • Turnover rates. We want those as low as possible right? Um, maybe. Some turnover is actually good. You obviously want to retain the high-performers, but do you really want the dead weight sticking around. Low turnover might be a sign of awe-inspiring leadership. Or maybe it’s a sign of a very weak leader not holding people accountable for performance.
  • Expenses – cut those down to the minimum. Well, that doesn’t work as a singular measure. Salary and benefits are a huge expense, but if we lay all the employees off no work will get done and no money will be made. Don’t want excessive inventory, but get rid of all inventory and it’s a little difficult to satisfy customers. Even looking at equipment: is the cheapest the least expensive? Probably not if we factor in maintenance and downtime costs. Same thing but back to employees: the cheapest employee may not be the least expensive when we factor in productivity and ease of managing.

Are any of these bad measures? Nope. It’s just crucial to remember that they aren’t definitive or absolute measures. They provide some, but not all, data. The risk is to draw too firm of conclusion from them, especially when they don’t capture real world use. Although all pieces are necessary to make the puzzle, you can’t make the puzzle from just one piece. The all time classic example of this is the “11 is one louder” scene from “This is Spinal Tap”.

Most decisions are not cut and dried. What works really well for someone else may not work for us at all. Everyone’s situation is different; their needs unique. “More” is not always better and “most” can be counterproductive. Rather we must balance out a number of factors to decide which option best fits our specific individual needs.

do you have a job or a career?

I was watching Chris Rock’s “Kill the Messenger” the other night and was really struck by one of his comments. I’m paraphrasing, but he basically said that you know you have a career when there’s never enough time. You look at your watch and it’s already after 5pm so you plan on coming in early the next day. With a job, there’s too much time. You look at your watch and it’s just after 9am and the day stretches out ahead.

Absolutely brilliant! It doesn’t matter if you’re overpaid or underpaid, hourly or salaried, educated or uneducated, or what field you’re in or company you work for: if there’s never enough time to accomplish all that you’re excited about getting done, you have a career; if time is your enemy, you have a job. There’s a lot of people with college degrees in high paying jobs and there’s a lot of people just getting by (for now) who are forging their career.

So, what’s the scoop. Do you have a job or a career? If you have a job, what would it take to get a career?

too safe is too dangerous

Ok, back from vacation. I’ve returned from visiting family and friends with a strong desire for a rat rod T-bucket, an AR-15, and a new mountain bike. I’m not sure what this says about me (or my friends, for that matter). Fortunately, I’m going to use the time proven method of combining a complete lack of introspection with denial and not think about too much. Beats Prozac.

Speaking of mountain bikes. I decided it was time to expose my bike to sunlight and try out some trails I’ve been hearing about. (Hang in there, this is going to connect to business sooner or later). There was one easy section of trail where the left side was a rock wall and the right side was a steep descent into the river. Nothing life threatening, but it would certainly inconvenience the morning to somersault into the murky water. My first instinct was to head to safety by veering away from the edge leading to the water. That’s a rookie move. The rock wall is no safer. Getting close to the wall risks catching the handlebar on the wall and pinballing over in slow motion. Move away from the edge, clip the wall, and fall in anyway.

The safest way to ride that stretch of trail is to stay in the middle and look at where I want to go. Just like business and life.

Although I don’t advocate unnecessary risk, how often do we create more problems for ourselves by lunging for safety? We avoid, we choose to not take action on the iffy belief that it’s safer than taking action. We sit still when we should be moving or if we do move, it’s backwards at full speed. Our peers, our competition, the world passes us by when we insist on trying to create absolute safety.

Where are you trying to be too safe?

 

your job is to maximize profits… sorta

Leaders talk about their fiduciary responsibility to maximize profits for the business owners (shareholders). This is largely true, but in my opinion, incorrect.

From my point of view, their fiduciary responsibility is to maximize profits based on their clearly defined business strategy. This sounds the same but it isn’t. Not even close. Let’s consider some examples. (But before we do, I need to offer the full disclosure that my understanding of general business strategy far exceeds my specific investment knowledge. I’m approaching this from a business philosophy perspective NOT a business law perspective.)

A conservative investment company with a strategy that prizes long-term soundness above rapid growth has a responsibility to make different decisions and take different actions than an investment company that is trying to grow as fast as possible. I’m not suggesting that one strategy is better than the other – both have their place – but a leader that went for the quick buck at the expense of the long-term for the company seeking soundness would be just as remiss as a leader at the high-growth company who delayed growth when there were still funds available for expansion.

It was years before Amazon.com made a profit because they were aggressively seeking market share to position themselves for maximum profits in the future. Does this mean that top leadership was liable to shareholders. No. They had a clearly defined strategy and aggressively pursued it. In the early days, no one bought shares because of the steady consistent profits Amazon was making (it wasn’t). Rather, they invested voluntarily and eagerly because of the company’s future profit potential based on their strategy.

Some people invest in utility companies. It’s an unsexy, flannel nightgown of investments, BUT people do it because utilities tend to turn consistent and stable profits year after year. Investors aren’t expecting (or even wanting) maximum profits this quarter. They are seeking reasonable profits from now through eternity.

Again, companies have a fiduciary responsibility to maximize profits based on their clearly defined business strategy. The problems come when they: 1) don’t have a well-defined strategy; or 2) try to maximize both short and long term profits. Without a well-defined strategy they will just do a bunch of stuff and hope they are profitable. This is like trying to lose weight without any particular ideas about, say, nutrition and exercise.  Trying to maximize both short and long term profits is like going on a crash diet for the rest of your life.

Different investors have different investment strategies (gasp!) and are investing for different outcomes (double gasp!). No company has the responsibility to be all things to all investors – it’s folly to attempt it. Every company has the responsibility to be clear about their strategy and stick to it so that investors can choose and invest in the companies that best fit their needs.

what your business can learn from a 30 year old metal band

When is the last time that you – as a customer – were completely blown away by the unexpected value a business provided? I don’t mean that you were happy with the service or product. I mean that you were so delighted that you wouldn’t shut up about it. You told everyone in earshot, called up friends, emailed, posted it on Facebook. You went in expecting X and got X+10.

Now the tough question: when was the last time that you delivered that level of unexpected value to your customers?

Last week I came across a video on YouTube that caught me so off guard I’ve been annoying my friends with it, spending money on iTunes, and it has caused me to rethink my day job. I hesitate to share it because I realize that not everyone will, um, appreciate it as much as me, but even if you hate the video, the idea holds true.

Here’s the backstory: Grave Digger is a metal band from Germany founded in the early ‘80s. They never made it big in the US but were very successful in Europe. They were invited to play the 2010 Wacken Open Air Festival – an enormous 4-day event with 80,000 attendees, over 120 bands, and 6 stages. It’s kind of a big deal. They played on the main stage and chose to play their most popular album in its entirety.

That’s huge, but how do you stand out further? There’re a lot of other and bigger name bands, so what do you do to please your customer? You close with a crowd-favorite anthem about the Scottish rebellion (think Braveheart) AND you invite Van Canto, an A cappella metal band (don’t ask – it works for them) to open the song AND you invite the singer for Blind Guardian (another band barely known in the US and legendary in Europe) to sing with you AND you bring bagpipers on stage. It is so amazingly over the top, but I’m afraid that if, for some strange reason, one wasn’t into German heavy metal , the impact of it would be lost. The video link is at the bottom. Watch and enjoy if you want, but my point isn’t about music at all.

Maybe this will capture the impact: Imagine that you were a huge tech conference and excited about hearing Bill Gates speak. As he nears the end he surprises the crowd by bringing Steve Jobs and Mark Zuckerberg out to offer their thoughts on the topic. That’s the kind of value it is for the customers. Would it have been a good show without all the others? Sure. But it wouldn’t have been you-must-see-this amazing.

My point? If you’re not surprising your customers, leaving them dumfounded, amazed, and dying to tell their friends about your products or services, you’re a commodity. I can get Italian food from dozens of restaurants; what makes your restaurant better? Realtor? Hundreds to choose from, why do I care about you? Car dealer? Yawn – there’re 17 others lined up right next to you. Competing on price? I’m a loyal customer until your competitor has a sale. C’mon. Do better.

What? The music festival story doesn’t work for your business. You’re lying to yourself. Try harder. It doesn’t have to be festival big. Little things make a huge difference. Do you greet every customer? Not the, “WelcometoblahblahblahI’monlysayingthisbecausemyjerkfacebossisforcingmeto.” that even mini-marts are doing. I mean a look-you-in-the-eye-shake-your-hand-sincerely-I’m-pleased-you’re-here hello. There are businesses that do it; a few of them. They really, really stand out. And it costs them NOTHING.

My favorite  Realtor in the whole world consistently amazed me with his uncanny in-depth knowledge of the market and area, connections to very high quality repairmen, and tons of little touches. After we sold our house he gave us a $50 gift card to our favorite restaurant. Pleased? Surprised? Thrilled? Absolutely. Small touch, big impact, class act.

My favorite motorcycle jacket is an Aerostitch. I didn’t know I was going to buy one, but I happened to see their shop from the highway one day when I happened to be in Duluth (who happens to be in Duluth?). I went in on a whim and after chatting for a few minutes with the clerk, he INSISTED that we take a tour of the factory. The jackets were assembled on-site and I got to see crashed jackets that were being repaired, meet the people sewing them together, and yes, I bought a jacket. And for days after I purchased it I kept finding new pockets and features that only a very serious motorcyclist would have thought to include. There are a lot of ways they could have cheaped out, but that wouldn’t have inspired me to make a $400 impulse purpose at a time when I was making about $7 an hour. And it wouldn’t have inspired me to brag on the company 15 years later.

This is a long post, but an important one. Are you offering as much delight and value as your competition? Yes? Then you are instantly replaceable. Do better.