Wednesday, April 19, 2017

Demotivating Creative Workers

“Motivation” is often spoken of as if it is something that one person can do for another – to inject other people with a will to succeed and excel.   It is this sense that the football fan, shouting at the television from his living room chair, feels that he has contributed to the game – that his favorite team would have lost the game, or sat sleepily on the bench, if it weren’t for all his cheering.   In a similar manner, a boss who feels he has “motivated” his people by barking orders at them, telling them to do what they already know how to do, and nagging them to do it better and faster without providing any means of practical support erroneously feels that he has practiced leadership and caused his employees to perform better.

Browbeating people can “motivate” them to do something they are not interested in doing, but only to the degree that is necessary for them to escape nagging.   People who are truly motivated to excel do not need a cheerleader or slave-driver, and in fact such people often distract them from their goal and detract from their performance.    You can direct a person’s enthusiasm to a specific course of action (only if they had none in mind), you can clear barriers to their success, and you can provide them with the resources they need to succeed – but you cannot make them want to succeed if they are not already motivated from within.

Ironically, most methods for motivating people tend to demotivate them instead: telling them to do things that they already know that they need to do, giving vague encouragement (or threats) to do things “better” or “faster” without specific guidance or additional resources, and otherwise interfering with and distracting from their ability to do the good work they might have done if they were left alone to do it.

Consider that the things that people do in their leisure time is not so different from the things that people do for a living – the difference between a gardener and a farmer, between a woodworking enthusiast and a carpenter, between a home cook and a restaurant chef, between an amateur golfer and a professional athlete is negligible.   

Some highly motivated employees have chosen a profession that matches their interests, but more often the motivated employee has taken an interest in what they happen to do for a paycheck.   There are many people who are quite happy working as janitors, a job that is often regarded as low-paying, tedious, and unpleasant – but a janitor who takes interest in the work, who finds  mopping a floor an engaging challenge and believes he has served others by doing the work, can happily carry on for years.

Creative people are drawn to professions because they love the activity, but lose their passion because of the lack of autonomy: they cannot create at their leisure, and cannot create work that is “good” by their own standards.  Instead, they must work to deadlines and satisfy specifications, and are often beset by meddlers who have less knowledge or expertise – yet who still feel that it is their role to tell the creative worker how to do his job. 

This is where a domineering manager or a toxic work environment can drain the enthusiasm of creative workers.   Many people bounce out of “creative” jobs quickly.   Others persevere for a number of years but are worn down and burned out over time – they attempt to contribute but are unable to do so, they hold out hope that the next project will be better, and over time they realize that they will never be able to contribute in a meaningful way and resign themselves to becoming hacks.   And by so doing, the overbearing manager can drive performance metrics (which have more to do with quantity than quality) while undermining the morale of his employees and the quality of the work of his department.

Wednesday, April 12, 2017

Managing for Reputation

Not only does a firm need to put out a good product to be successful in the long run, it must also:
  • Be efficient in its operations
  • Attract and retain quality employees by providing adequate compensation and a good work environment
  • Serve its clients well in all regards
  • Invest in long-term initiatives
  • Foster stable relations with reliable suppliers
  • Consider its impact in a broader societal context 

A good manager or regulator must integrate these objectives, and prioritize where contradictions and conflicts arise.   Ultimately, the firm that is able to set long-term goals and achieve them will enjoy stability and financial success.

Pursuing the same things will also transform the firm into a more respected institution.  A corporate brand is not respected in and of itself, but follows the respect people have for the organization on account of its behavior.   Largely, this is dependent on the quality of the firm’s product, but it also derives from the experiences that people have interacting with the firm outside their role as a consumer.

This can readily be witnessed in proactive: observe that the most respected firms are those whose chief concern is not generating short-term returns for shareholders, but long-term benefit to customers, employers, investors, and the public.  Financial success is the result, not the objective, of good governance and management.

Wednesday, April 5, 2017

Personalization to Mass Production to Customization

On its most fundamental level, design is about fashioning something (vehicle) to deliver a benefit to a person (beneficiary).   The more specific the benefit and person, the better a designer is able to tailor the vehicle to serve the beneficiary.   Where the designer does not know much about his beneficiary or the benefit that is being sought, he can at best design a general-purpose vehicle that delivers a weak benefit to a broad audience, and at worst he will design a useless vehicle that delivers no benefit to anyone.  And this is the problem of customization.

Before the advent of mass-production, personalization was the natural way of things.   Each maker designed each object for a specific use by a specific person.   Mass-production required compromise: to be efficient, a machine must make perfectly identical products regardless of the specific needs of the people who will buy them.   And this was a compromise people were willing to accept for the sake of having goods available and affordable.

The next phase in evolution was a step backward toward personalization, but not quite achieving it perfectly: the notion of customization meant some combination of mass-production and personalization, generally favoring the former: mass-produced objects had the same basic qualities, but certain of these qualities could be altered to suit the needs or tastes of the individual customer.  But the customizable features were defined by the maker, and the customization options were held to a very narrow range.   This represents a better compromise, but is still a compromise.

And this compromise describes the present state of design, as it has for the past hundred years or so.   The degree of customization varies by product and maker, but is still constrained to specific features and specific variations that the maker selects.   Consumer satisfaction with this compromise seems to wax and wane: there is always the demand for products to be better suited to the needs of the customer, but an unwillingness to compromise on the price and immediacy of possession.

So in the present time, the majority of personalized products are only affordable to the wealthy, and the demand for personalization by the less affluent is both inconstant and inconsistent.  There is some interest, but not the willingness to pay to achieve it.   Makers attempt to better understand these demands, and are in some instances willing to serve them if there is sufficient interest that is supported by a willingness to pay and to wait.

For the most part, we remain stuck in the era of customization, flirting with the notion of personalization in a superficial way.

Wednesday, March 29, 2017

Assessment of Interest and Engagement

It’s generally believed that a consumer will become interested in a proposal and remain engaged in the sales process if he perceives that the benefit he will receive is worth the cost of obtaining it.   This premise seems plausible, but it often leads to an assessment that fails to consider the breadth of costs involved, or at best a superficial monetization of benefit and cost that seems mathematically sound but still fails to explain or predict consumer behavior.

So while it is plausible that an opportunity in which benefit exceeds cost has the potential to be interesting and engaging to a prospect, benefit and cost are only two factors and are often considered superficially and out of context of the prospect’s entire portfolio of needs and resources.  A broader, deeper, and less quantifiable assessment is necessary to improve the accuracy of prediction and of strategy development.


The benefit is the total motivation of the prospect to obtain and use a product (good or service), which itself has a number of factors:

  • Functional Benefit – The practical results of using the product. 
  • Psychological Benefit – The feelings that are generated by the use of the product.
  • Esteem Benefit – The way that others will perceive the person who uses the product.
  • The Benefactor – The value of the relationship between the purchaser and the user of the product.

Each of these dimensions of benefit is imaginary and subjective.   They are imaginary because the benefits have not been experienced yet and may not be what the prospect imagines (even if it is a repurchase, he imagines the benefits will be the same as before.   They are subjective because each person places a different value on the same benefit, e.g. esteem is more important (hence valuable) to some than others.


The benefits that the prospect predicts are first assessed against the cost of obtaining them, but this is often considered in a superficial and limited manner.  The seller may consider the money-price as his revenue, but the prospect considers the full scope of costs:

  • Money Price – The amount the buyer expects to pay the seller, plus any additional money costs that the prospect will incur (taxes, delivery fees, etc.) that require an expenditure of cash.
  • Method and Terms of Payment – In some instances, the prospect may consider the methods and terms of payment unacceptable or inconvenient, particularly when hey violate expectations.
  • Time Required – This includes both the time required to make the purchase and the time required to use the product to obtain the benefit.
  • Effort Required – Likewise, this includes the effort required to make the purchase and that required to use the product to obtain the benefit.

Of all these costs, only the money-price is quantifiable: the rest remain subjective and tend to be of much greater importance to the buyer than to the seller, who is prone to be dismissive of them.   Hence, the most common mistake made by those who wish to compete on price is figuring that the money price is the only element that will be considered by the buyer.


Most experienced customers have been disappointed in one way or another by a purchase they have made in the past, and are likely to be leery of future purchases.   Specifically, they are likely to consider the possibility that the deal will not work out as expected.   Factors of risk include:

  • Certainty of Benefits – The assessment of whether the functional, psychological, and esteem benefits of the purchase will be satisfactory to both the purchaser and the benefactor
  • Certainly of Costs – The prediction of whether the expected costs (price, terms, time, and effort) are accurate, and the fear that there will be additional costs involved.
  • Certainty of Abilities – The consideration of whether the purchaser and benefactor have the ability to obtain the product and derive the desired benefits from it

All risks are imaginary and subjective.   The prospect imagines what might go wrong and performs an assessment of whether they will be encountered.   Where the prospect has experience with both vendor and product, the fear of risk is mitigated, but uncertainty still remains because past performance is not a guarantee of future results.

Opportunity Costs

External to the purchase, but implicit in the buying situation, is the consideration of opportunity costs:  the money, time, and effort that is required to obtain and use a product is deducted from the total budget of the purchaser, user, and beneficiary of the product.   An assessment of opportunity cost should consider these factors:

  • Competing Needs – The estimation of the value of the fulfillment of one need is seen in the context of all needs that the prospect has.  The benefit of this purchase may be relatively unimportant.
  • Competing Costs – The money, time, and effort of obtaining a product are considered in terms of the overall impact to the prospect’s budget.   Even if the need is important, the cost may represent too great a sacrifice.
  • Proportion of Resources – In some instances, a prospect may consider the proportion of his available resources that must be devoted to a given need.  To spend a significant portion of one’s budget on one purchase creates a heightened level of anxiety about the purchase.

In all instances, opportunity costs involve the assessment of sacrifice, which is defined as the loss of a greater value for the sake of a lesser one.   Rational individuals do not make sacrifices, but instead seek to pursue the greatest value even if it means foregoing lesser values (which is not by definition a sacrifice).  The opportunity must therefore be seen in the context of other values.

Interest and Engagement

Each of the factors above have largely been considered in the process of obtaining a product – but the purchase of the product is not the end a buyer seeks to achieve.   The buyer’s need is satisfied when the product is purchased and used, and only then is the value delivered.  Much can go wrong along the way.

Neglecting the totality of the experience is a very common mistake, made by buyers and sellers alike.   For the seller, neglecting engagement leads to dissatisfied customers and loss of repeat business.  For the buyer, neglecting engagement leads to wasted money, disused products, and a general sense of dissatisfaction.

Engagement is maintained by reinforcement of the assessment of the factors that led to interest: whether the prospect still believes the benefits will be received as expected, that only the costs expected will actually be incurred, that the risk remains moderate, and that the opportunity costs are acceptable.  If this fails at any point, the result will be abandonment: the customer will “drop out” of the sales funnel, or he will discontinue use of the product before receiving the benefits.

Conclusion and Caveat

The application of a broader and more detailed assessment of cost, benefits, risks, and opportunity costs can serve to improve marketing strategies: consider each of the factors and subfactors listed above from the perspective of the prospect (or prospects, where buyer and user are separate).

At the same time, this is a work in progress: what is presented here is the result of some research and meditation on the topic, and may not be comprehensive: additional factors will be identified and more granular details will arise.  This is not the ultimate answer, but merely a better one for the time being.

Wednesday, March 22, 2017

Experiential Competition

In an environment of intense competition, customers flock to providers who offer the best value proposition.  For manufacturers, the means of competition is a choice between offering better quality and lower price to tailor the features to the needs of a given market segment and provide a desirable solution at an affordable or advantageous price.   For retailers, the means of competition is a selection of product offerings that appeal to their chosen segment.

The constraints of reality, however, lead to commoditization where customer needs are similar.  Manufacturers will produce and retailers will offer a product with the same features and qualities at roughly the same price as their competitors.   The variations will be eroded by competitive pressure to gain market share by imitating the choices made by other vendors.

As a result, both quality and price gravitate toward commoditization and competitors must find more subjective an idiosyncratic means of competing for their desired market segments.  In practice, the means of competition become aligned with customer and consumer experience.

The term “experience” bas become nebulous, but is understandable in the reductive sense: it is about reducing the friction of interactions surrounding the product (obtaining and using it) while increasing the non-functional benefits of consumption (psychological and social factors).   Distinction is easy, but distinction in a manner that is relevant to the interests of a specific market is exceedingly difficult.  It requires more speculation, and is more difficult to address – because while it is simple to observe where customers are experiencing pain, it is difficult to imagine opportunities that might delight them.

Where experience becomes the distinguishing factor, the features and price of the product seem irrelevant – though in truth they are highly relevant to the market and compromising upon them will have disastrous consequences.   If the core value proposition is neglected or violated, the experiential components will be deemed irrelevant and the product will not succeed.   But so long as they can be preserved to the standard defined by the commodity, they are of little importance in winning consumer preference.

This shift toward experience-driven competition has been disconcerting to suppliers because it implicitly shifts control of the market from the producer to the consumer in a far more obvious way.  That is, consumers were always in control, as the ability to “vote” with their buying dollars is the measurement of the success to any decisions made internally within the supplier.   Hence the ability to “sell” is gained from proactive control, but from reactive accommodation.

In that sense, the notion of experience can be recognized as an opportunity for suppliers to engage in a more passive and receptive manner with their buyers, which reflects the manner in which this engagement should have been considered all along.   But the relevance of these decisions to the success of the firm has become more explicit and distinct.