Wednesday, March 30, 2011

Ethical Marketing 2

In an earlier post, I suggested that marketers lose all semblance of ethics when they attempt to offer a product to customer who can derive no benefit from having it - a consequences that can occur when there is a desire to increase sales beyond the point where all people who could benefit from owning a product already have it, and marketing seeks to "expand" into customer segments who have no need, but to whom the company wishes to sell nonetheless.

A comment came in that takes a slightly different approach to the notion, which also bears consideration: that the company makes a bad product. In effect, the product is not effective in addressing the needs it is intended to serve, but is nonetheless sold as an effective means of addressing those needs. This seems entirely plausible, and perhaps even more widespread, than the situation I originally described - and may in part be subjective as it depends on the perception of whether the product addresses the need in a way that is "good enough" to satisfy the customer.

This also seems a potential pitfall for cost leadership strategies: to compete on price, a manufacturer must compromise on quality - and the point at which the balance of cost-versus-quality is acceptable to the majority of the market is again a subjective matter. Doubtless, some customers will find a given ratio to be acceptable, others will not.

As such, my sense is that this may not be a matter of ethics so much as a matter of estimation. While I don't entirely dismiss the notion that there exist companies that seek to profit by pumping out cheap and shoddy merchandise, I think it more likely that there was an intent to provide some level of quality at a given price point, and can accept the notion that it was an earnest estimation on the part of the company to satisfy a given market segment's willingness to compromise on quality for the sake of price.

An ethical pitfall exists, in the potential to misrepresent the quality of the product to make it appealing to a customer who would not have purchased it if the quality had been represented accurately - though it would be difficult to substantiate the claim of an intentional act of deception.

So ultimately, I can accept this suggestion, though my sense is that the ethical shortcomings of marketers are less pronounced, and less distinct, in its regard.

Saturday, March 26, 2011

Infrastructure: Positive and Negative

A pair of contrasting examples on the topic of infrastructure have my mind in motion. This is likely to be more of a ramble than usual, but perhaps it's going somewhere:

The first example is of logistics, specifically package delivery systems. The example was given, in the context of developing sites for an international audience, of locations where package delivery is not reliable or even available. In the US, we are accustomed to relatively fast and reliable delivery via the postal system and private carriers (FedEx, UPS, etc.), but in developing and underdeveloped nations, they lack such facilities, and as such e-commerce is a difficult proposition. In that way, the logistics infrastructure, the old fashioned business of trucks and men to carry things about, is essential to electronic commerce.

A few red herrings:
  • Package delivery is said to have evolved from a local service to more of a national one. Companies would deliver their own goods at first, then evolved to hire private couriers to transport goods in the local market, then courier services formed a large and international network. It's an interesting parallel to the Internet.
  • Infrastructure also includes the notion of free riders. To the shipper, the price of delivering an envelope to the office next door is the same as delivering the same envelope to a location in a remote area of Montana. The cost, per unit, to the shipping company is much greater in the latter case (you may have to have a man drive a vehicle a few hundred miles to deliver one envelope to one person). So in this way, people in remote locations pay less for logistical support than ones in urban areas.
The second example is of landline networks, specifically telephone service. The example in this instance is the high rate of adoption of mobile telephones in developing nations which stands in stark contrast to the low adoption rate of mobile in more economically mature nations. The difference is chiefly in the existence of a telecommunications infrastructure. In the US, the wired network is virtually ubiquitous, highly reliable, and quite cost-efficient, so land-line service is a given; whereas in third-world nations, where there is no wired network, the cost of establishing one would be significant, and it's cheaper and more efficient to simply go wireless. The point is that, in this instance, infrastructure inhibits rather than supports innovation.

And a few more red herrings:
  • Mobile adoption is low in the US, but in other relatively developed areas such as Europe and Japan, mobile has been more readily adopted. In terms of infrastructure, the reason is the same: while these other nations are fairly well industrialized, they lacked a reliable and efficient wired network infrastructure. Given the geography, it simply is not feasible to implement a land-line network on the island of Japan. And as to Europe, I haven't heard a reasonable explanation, but their land-line telephone service remains famously abominable in terms of high cost and low reliability.
  • It would also seem counterintuitive that mobile service is lacking in remote locations of the US, as this would seem to be a natural solution to the difficulty of geography, but I suspect that the reason for this is largely profitability: third-world nations are rather small and densely populated, so the number of people who can afford mobile service within the radius of a transceiver likely make it worthwhile to implement one, whereas the problem with the vast expanses of thinly-populated territory in the US is lack of the same ratio of subscribers to transceivers.

Monday, March 21, 2011

Idiocy and Innovation

A follow-up to my earlier post: I got into the same discussion with an American colleague about the dominance of Indians in the IT industry (a quick summary, because humility is a cultural attribute – particularly the humility to accept they weren’t born experts, and so read the documentation to learn how things work rather than goofing around and hoping that things come out OK), and he offered an interesting rebuttal. More a defense of the arrogance of our own culture, but an interesting point nonetheless:

He admitted that South Asians are moving into the “low level” positions in Information Technology, but the very cultural attributes that make them effective at the hands-on tasks of programming and systems analysis hold them back when it comes to innovation, which is the key to more “high level” positions. His argument was, in effect, that you have to be ignorant in order to be innovative – if your approach to technology is to read the manual, and do only what it says to do, you will never discover the alternative, innovative uses that weren’t intended and haven’t been discovered.

My sense is that his rebuttal suffers from binary thinking, that a person who pays attention to documentation is necessary locked into a mindset that prevents him from being innovative. That aside, I think there is a point to what he's saying: the reason teenaged hackers are always a step ahead of more experienced and educated systems analysts is that they don't limit their thinking to what systems are supposed to be able to do, by the book, but instead experiment and "hack" to see what can actually be done, and discover loopholes and vulnerabilities that aren't documented.

And in the same way, the “technology innovator” can be differentiated from the “technology user” in his willingness to experiment and think in unconventional ways to stumble upon capabilities that were not intended by the creators of the original technology. Said another way, if you stick to doing only those things that you’re supposed to do, you’ll not discover what is truly possible.

But even so, I’m not convinced that the way of the bumbler is a better or superior approach, and I don’t think it’s a particularly good thing when such a person rises to a position of control within an organization – the method of discovery by simply goofing around is extremely wasteful, and a lot of damage is done by the trial and error process before a useful discovery is made … if, ultimately, a discovery is made at all.

I’m reminded of the hackneyed phrase often attributed to one grammar school teacher or another: that you have to demonstrate that you know the rules before you’ll be allowed to break them. I don’t think that “have to” is quite right, but I do see this as a sensible approach. There’s a difference between creative and just doing things in a random and sloppy manner hoping to arrive at a happy accident. To be creative, you have to understand how something works.

So in the end, I don’t think the rebuttal has entirely changed my attitude about the necessity of humility and the value of taking the time to figure out how something works rather than just goofing around and seeing what happens. But I do think that innovation is ultimately a combination of the two, though I do expect that bumbling is still not the best approach, the process of innovation does have certain bumble-like aspects.

Wednesday, March 16, 2011


I had a cultural discussion about the differences between Indian and American programmers, which may to explain the reason that the software industry is becoming dominated by South Asians. Simply stated: they bother to read the manuals.

The take on this was that Americans in general like to play around with things without taking the time to understand them. An Indian will study the documentation intently, studying to learn its every feature and function, even before launching an application. An American doesn’t bother to read the documentation or work through tutorials to learn to operate software – a practice so widespread that most companies don’t bother to provide either for the North American market – but instead, launches the application and fumbles about, trying to learn by trial and error. And as such, he does a lot of things wrong or inefficiently, and seldom discovers the full capabilities of the software.

He felt very strongly about this, as evidenced by the level of emphasis he placed on it and the rhetoric he used. He even went so far as to draw an analogy to giving an iPhone to a monkey, who will try to use it to crack nuts and, when he fails, to proclaim that the iPhone isn’t a very useful device because it won’t do what he wants it to do. Very uncharacteristic for a South Asian to overcome his reticence and propriety, but I think it speaks to his conviction.

Try as I might, I can’t refute his argument: Americans, by and large, really are bumbling idiots when it comes to technology, and design attempts to accommodate this by watering down the capabilities software and making the user interfaces “intuitive” – so in the end, it’s so simple that even an idiot could use it – and the degree to which software companies succeed only further discourages us from bothering to read documentation.

And granted, the argument is based on stereotypes. I’m sure that there are Americans who study the manuals and Indians who leap in headfirst, though it would not be typical of their respective cultures. And I’m also fairly certain that these modes of behavior are evident in other cultures. I expect the Germans are very studious in their approach, whereas the Spaniards perhaps are not. But I do have the sense these assertions are generally true of the respective cultures, and Americans and Indians are likely two cultures that personify the archetypes of the studious user and the bumbler.

I also have the sense that this is something that has evolved in our own culture over time. A person could not achieve much success if they were to merely fumble about with personal computers in the early 1980’s– prior to the Mac/Windows GUI. To do anything at all, you simply had to read the manuals to understand how the device worked. And I suppose this is among the reasons computers didn’t become popular until the knowledge needed to operate one was reduced to primitive point-and-click actions.

And perhaps because I’m old enough to have been a user of the early computers that I remember the transitional period when more people started fumbling about with computers. The IT department at most companies started out with the technicians who installed telephones and replaced the toner in the photocopiers – not the brightest fellows in the world, but very focused in their work, and humble enough to realize that they had to read the manual to figure out how to make things work.

So perhaps the difference between the studious user and the bumbler is simply a matter of humility. Regardless of their experience or intelligence, a person who accepts that there is much they do not know and is willing to invest the time in thinking before he takes action will invariably win out over the person who is arrogant enough to believe they were born with the innate ability to do anything they want without having to ask for directions.

And where humility is concerned, I can think of no two cultures that better embody the extremes of humility than the Indians and the Americans. So all things considered, it does make a lot of sense that the former surpass the latter in having the inclination to be more circumspect and studious, and are steadily gaining control of the information systems profession.

Saturday, March 12, 2011

The Theory of Money and Credit

I've added reading notes on Ludwig Von Mises's The Theory of Money and Credit, a book written in the early twentieth century to examine the nature and value of money at a time at which world currencies were debased, governments engaged in deficit spending, and credit was extended with reckless abandon, all of which paved the way for the Great Depression - and all of which seems to have been repeated in the early twenty-first century, though not as yet to the same degree.

That said, I'm not of the opinion that the book can be dismissed as "dated." While the gold standard of currency was abandoned nearly fifty years ago in favor of fiat currency, it had been in place for millennia before and has been abandoned and re-adpopted multiple times. And it can be argued that the current age of fiat money whose value is wholly imaginary does not represent a permanent shift, but merely another misstep that, in spite of the best efforts of those who wish to preserve it, is ultimately destined to collapse.

The basis of monetary value aside, Von Mises has much to say on the theory of credit, that is of particular interest in the present age, when the world economy suffered an adjustment (and some would argue, remains on the brink of meltdown) precisely due to the misuse of credit, and misconceptions about the nature of credit, on the part of debtor and creditor alike.

It's also worth considering in that, while much has changed in the economic life of the average person since the book was written, many practices remain unchanged, and the fundamental considerations explored by the author nearly a century ago remain entirely valid, and can be expected to remain so for quite some time.

Tuesday, March 8, 2011

Cool is Perishable

I saw a demonstration today of a kinetic user interface - a technology that is presently being used in video games to enable the user to control their in-game character without a physical device, by means of a sensor that detects their body movement. It's an idea that has been around for years, but I'd never seen a demonstration. I was impressed.

Then the question arose of putting this same technology to practical use. Wouldn't it be cool if you could use this kind of interface to buy stocks? The problem-solving part of my brain went to work on it immediately: each of your positions could be represented by an object that you could touch and move, zoom in on, bring up relevant information, all by physical motions that would be entirely natural and intuitive. It could definitely be done, and it would definitely be cool.

But before I had chased the butterfly too far, the analytical part of my brain went to work: what could you do with this new technology that really is new? What can you do with it that can't already be done? Aside of the novelty factor, how could such a thing deliver a unique value that would make it compelling in the long run, after the novelty had worn off?

And at that point, I was stuck for an answer.

Certainly, you could have access to more information - but only by virtue of it being a larger screen. A computer with a large monitor could do the same. And certainly, you could visualize information differently - but the same method of visualization could be presented on a two-dimensional screen regardless of whether you used a kinetic interface or mouse-and-keyboard.

And, as a matter of fact, a keyboard is much more useful for dealing with that kind of data. It takes between two and five keystrokes to enter most exchange symbols and click "enter" - much easier than having to use your whole body to try to spell out the words, or find them in a long list of options, or hunt through a virtual toy box of brightly colored three-dimensional objects. And it likewise takes a few taps to enter a number of shares to buy or sell.

All things considered, the kinetic interface doesn't add anything of value to the transaction. It doesn't make it easier - in fact, it would take a lot more time and physical energy to perform a task that can be done quite simply using the existing keyboard interface. And as to making that same interface accessible to someone in a wheelchair ... probably not going to happen.

I won't discount the possibility that there may be something I'm not seeing - that in a few days or weeks or months, I will be roused from sleep by a "eureka" moment when I realize something that hadn't occurred to me before. But for now, putting my creative and analytical skills to the task, I've come up empty.

At least for this purpose, the kinetic interface offers nothing of value that would make it a better way to do the same task. It would be different, and it would be cool ... but "cool" is quite perishable, and as soon as the novelty wore off, the user would realize that the "old" way of doing things was less difficult and time consuming.

I have the sense that this is a common problem when it comes to new technology, and the very thing that fueled the dot-com boom and led to the subsequent crash. New, different, and cool are certainly wondrous - but in the long run, useful, simple, and straightforward will win out.

Thursday, March 3, 2011

A Good Day for Customer Service

I took a couple of days off to get a few things done - home and automotive maintenance issues that I've been putting off - and had three experiences that may shift my general perspective about the current state of customer service, or perhaps consider the mind-set I've become habituated to.

The first was an exterminator, whom I called to investigate the wasps that keep showing up in the ventilation The company I called (not any of the several who have come around to sell an unneeded "service," which seems a common tactic) sent out a serviceman who did a thorough inspection, inside and out - and told me there wasn't a nest, and the wasps I was seeing were probably foraging (when the weather is dry, they seek any cool, dark place). He could spray the eaves or fumigate the attic, but the chemicals would wear off - but the best thing I could do was just to deal with them using supermarket-brand pesticides when they showed up.

The second was the company that sold me a water softener (lots of limestone in this area means very hard water) that hadn't been using much salt in the past few months, and which I suspected was broken (in a way that might be covered by the warranty, I hoped). Again, the company sent out a serviceman, who looked over the unit, and found nothing wrong with the mechanics - just some salt crystals plugging up the works. Just pour a few gallons of hot water down the intake line, every month, to clear them out.

The third was an auto shop where I went to replace the battery in my car. Another company, which does oil changes for me, mentioned it seemed to be running low and it was probably time to replace it (they don't sell batteries, but recommended a few places). The shop that I went to tested the battery, pulled it out and did a visual inspection, and pronounce that there was nothing wrong with it - and even though it's about five years old, it's in good shape to last a few more years before needing to be replaced.

In all three instances, there was an opportunity for the companies to sell me things I didn't really need, and I likely would have been none the wiser. And in all three instances, they opted not to do so. Instead of paying a few thousand dollars for services, I laid out a few hundred for their service fees (some might complain about paying a fee for no appreciable work, but having an expert take the time to look things over is a service provide at a cost to them, so I've no objection). And as a result, I have three companies that I can trust to serve my future needs, and recommend to others.

If any on these incidents occurred on its own, I would have considered it to be unusual and exceptional - but to have the same thing happen, with three different companies, on the very same day, was a bit of an awakening: maybe the state of customer service isn't as bad as the analysts and critics would have us think?

Of course, critics and analysts (present company included) are inclined to be critical and analytical. It's their job, and I don't think any firm would be happy to pay a salary or a hefty consulting fee to someone whose constant refrain is "everything's fine and there's nothing you could be doing any better than you already are."

In order to make improvements, you must identify problems or at least problem areas where things could be done a bit better. But I think I could take a cue from these companies who've served me well to reflect on the service I provide to others: there comes a time at which you've done as thorough an inspection as you can, and must accept that your failure to find a problem might mean that there isn't one.