Friday, May 29, 2015

Needs Precede Technology

I stumbled across an interesting idea that was written down in 1832: a network of posts and pulleys driven by steam engines that would deliver bags of messages among cities.   It was a slightly preposterous idea even at the time, and totally unnecessary in the modern world - but I was stuck by the notion that the author recognized a need and conceived of an idea to address it.

This stands in contrast to the practice of dreaming up some new technology and attempting to convince people that they need it.   I see this all the time in television infomercials (Have you ever wanted a square hard-boiled egg? What if there were a way to polish your doorstops?  That kind of thing.) It's also common among promoters of zany website and mobile applications.   They all offer a new way to do something that nobody wants to do in the first place - and most of them fail to have sustained success as a result.

Products that find sustainable markets generally serve existing human needs, and typically needs that are already being fulfilled by inferior methods.   The mailbag network described was certainly an improvement over human couriers ... though it would have been commercially unfeasible and made obsolete a few decades later by the telegraph.   But at the time it would have been a faster way to do what was already being done.

It goes back to the notion that human needs have been about the same since the species evolved - it's just that the means by which we fulfill these needs is constantly improving.   There are very few technologies that enable people to do things they had never been able to do before - the vast majority enable us to do it faster, better, or with less cost and effort.  Those are the innovations that thrive, survive, and make their inventors rich until someone builds a better mousetrap.

In the end, this leads to a critical questions for any new technology:  What does it help people to do better than their current solution?    If it's not better than their current solution, it's not going to take.  And if it is proposing to do something that people don't want done badly enough to have already figured out a way to do it, it's likely to be a failure as well.

Friday, May 22, 2015

Admitting You Have a Problem

I have a problem with people who have problems admitting that there is a problem.  Specifically, these sorts attempt to foster false optimism by reframing every problem as an opportunity.   I have some understanding of the psychologyof self-deception, and can appreciate that fear and panic can be paralytic, but thinking clearly requires seeing things as they are.  The practice of reframing every problem as an opportunity is dysfunctional, as it leads to clouded judgment, misguided thinking, and ultimately to poor performance.

The litmus test for whether something is a problem or an opportunity is simply this: is the situation acceptable as it is?    If the situation is acceptable, then there is an opportunity for improvement.    If the situation is unacceptable, then you have a problem and solving it is critical.   A company that is taking a loss on its daily operations does not have an opportunity to improve its profitability – it has a problem that, if left unchecked, will lead inexorably to bankruptcy.

Another dysfunction of the “everything is an opportunity” mindset is that opportunities do not have a specific solution.  A company with an opportunity to improve profitability may pursue this goal in many ways: expand markets to gain economies of scale, increase the price of its products, automate to decrease labor costs, and so on.   A problem can be diagnosed more specifically, to discover that the reason the company is not profitable is because of the high volume of returns due to product defects – and the cause of those defects can be investigated to discover a specific course of action that can be taken to remedy the problem.

If the problem is reframed as an opportunity and another course of action is undertaken, the problem does not go away – and it may in fact become worse.  If there is a problem with product defects, then expanding markets is not going to solve it: the number of returns will scale in proportion to the volume of sales, and the losses will increase.  The only way to solve the problem is to attack its cause, and so long as the cause is ignored it will remain.   In this sense, doing the wrong thing is even worse than doing nothing at all.

That’s not to say that this misidentification is always optimistic.  Manipulative people often portray opportunities as problems to panic others to take action where no action is necessary, or to make their desires seem more critical than they are.   In the same example, a company that is operating profitably, or even at break-even, does not have a problem because it can persist indefinitely with its present practices – so any change with the potential to improve profitability is an opportunity, not a problem, and may be pursued at leisure in any number of ways.

So in the end, whether it’s misidentifying problems as opportunities or opportunities as problems, the remedy is to know the difference and act accordingly.

Monday, May 18, 2015

Burnout and Knowledge Workers

Frederick Taylor, the godfather of scientific management, recognized the problem of physical fatigue among laborers.   He was able to demonstrate that laborers are most productive when they work at a steady and comfortable pace, take a break from physical activity about every two hours, and work no more than eight or ten hours a day.  Pushing laborers harder than this causes a permanent depletion of their reserves and, ultimately, lower productivity.

However, the same principles have not been applied to knowledge workers – those whose work is intangible and often defies quantification because their work product is entirely mental.   It may take hours of thought to discover a solution, solve a problem, or create a plan – but the only evidence of this work occurs when the thinking is done and documentation takes place.   That is, the results of many hours of thinking may be expressed in a diagram or report that takes fifteen minutes to execute.

Just as physical exertion fatigues the muscles, so does mental exertion fatigue the mind.  This is most often in work that requires close attention, as errors are evident in the work that are blamed on carelessness, but are actually the result of mental exhaustion.

The evidence of mental fatigue is unnoticed because it is largely unnoticeable.   A physically exhausted person movers more slowly, breathes harder, and shows other visible signs of being overtaxed.   A mentally exhausted person may give no external signs, other than seeming a bit distracted or inattentive.

Meanwhile, the effects of mental exhaustion are far more devastating: a person who is physically tired may still be able to work at 80% of their capacity.  A person who is mentally tired may be unable to work at all – though again, because knowledge work defies quantification, it may not be easy to observe that a solution is only 80% as effective as one that might have been created if the worker was rested.   The most common symptoms – absenteeism and attrition – are usually unnoticed until they have come to crisis.

My personal experience with manual labor (working my way through school) was that management was very attentive to physical exhaustion.  Breaks and lunch were mandatory, and anyone caught working through them would be reprimanded.   The shift went no longer than twelve hours (multiple shifts ensured this).  If a worker handled heavy cargo such as salt or bleach on the first half of his shift, he was moved to handle light cargo such as foam trays or paper towels for the last half.   And if someone showed signs of severe fatigue, they were put on light duty immediately.

I have seen no such vigilance in the white-collar world.   Workers are informally discouraged from taking breaks, meetings and work sessions are scheduled through the lunch hour, and people are encouraged and praised for spending long hours at the office and taking lunch at their desks.    Taking a scheduled break, an hour for lunch, or leaving at a reasonable hour have become so rare as to seem ludicrous.  

And at times I wonder if the performance of companies is quite what it should be, or could be, if the issue of mental fatigue were more thoroughly studied and considered.   Though it is impossible to measure the results that are not being achieved because of it – and what cannot be quantified is very often ignored.

Wednesday, May 13, 2015

Strategy and Tactics

In casual speech, the terms "strategy" and "tactics" are used almost interchangeably - but the two concepts must remain distinct and well separated in the minds of those who do strategic work.  Too often, they are not, and the consequences are disastrous.

The similarity between the two terms is that the both have to do with planning.   They define a desired outcome and a plan of action that is believed to be likely to achieve it.   When properly conceived, each defines a desired state and suggests what actions will be taken in order to achieve that state.

The difference between the two is in their scale.  A strategy paints in very broad strokes - "we will become the industry leader by underpricing our competition" - and it seems a very good idea, but lacks sufficient detail to suggest a specific course of action.   Tactics derive from the strategy and suggest more specific activities:  "in order to underprice our competition, we must reduce our cost of manufacturing by automating our assembly line."

Both strategy and tactics are necessary for success.   A strategy without tactics is merely a daydream.   We know what we want but have only a vague sense of how we're going to achieve it.   Meanwhile, tactics without a strategy can be very successful in accomplishing objectives that do not support any goal.   We will substitute aluminum for wood in all of our products is a tactic - but what does this achieve?

A disjunction between strategy and tactics naturally leads to failure.   To declare that "in order to underprice our competition we will use the most expensive materials available" is clearly not viable because the two statements are at odds.   However, the more common problem is that tactics are non sequiturs. "In order to underprice our competition we will improve our customer service" is not obviously flawed, but the connection between the activity and the objective is vague.   (It could be that better service reduces returns, and the reduction in expenses enables the firm to lower its prices, thereby underpricing the competition - but the connection is not made in the tactical statement.)

On the lowest levels of an organization, you will find people who are very good at sticking to a plan.   They do what they are told, heedless of whether the outcome of their actions will be supportive of the organization's goals.   It's not usually their fault - the management style and organizational culture strongly discourage doing anything else.  The only way that they will help the organization succeed is if the tactics are flawless and clearly communicated (which is the presumption of management who provided them) or they must have the latitude to deviate from procedures in order to support the strategic goals of the organization (a notion that receives a lot of verbal agreement, but very little implementation in practice).

In the present day, with complex markets and constant change, rigid tactics cannot be maintained.   Situations change rapidly, and continuing to implement a tactic designed for success in specific conditions leads to failure when the conditions change.  That is not to say that the strategy is no longer valid, but the tactics must adjust.  Properly executing a doomed tactic is not a path to success on the strategic level.

Ultimately, this goes back to the struggle between the tower and the trenches - those who devise tactics are out of touch with the front lines, yet still wish to exert granular control.  Or in the terms of the present meditation, those who devise strategy also presume to dictate tactics, which is exceedingly unwise.

Friday, May 8, 2015

Foundations of Trust

In attempting to win the loyalty and advocacy of customers, many firms focus on offering a cheap price, a quality product, and a fast-and-simple acquisition process.   All of these things are important to some degree – but none of them are as important as earning the trust of the customer.   Customers can routinely be seen to pay a high price, accept a mediocre product, and suffer through a difficult and time consuming process to obtain products from companies they trust – and recommend these brands to others.

Trust, however, is difficult to pin down.  What makes a customer trust a brand?   There’s a great deal of literature on the topic of trustworthiness, from Aristotle’s virtues to the Scout Oath, but it doesn’t seem sufficient.   In many instances, it is entirely tautological – being trustworthy means deserving trust.    In other instances, it seems to identify peripheral characteristics like honesty – which contributes to trust, but a person can be honest and still not be trusted.

I’ve spent some time pondering the matter, reviewing the literature that suggests which values cause a person to be trusted, and considering whether they really work in practice.   Much of what I found was “useful but not essential” – but there are three basic qualities that I was unable to eliminate: beneficence, competence, and reliability.  And while it’s an ongoing study, I feel confident enough in my progress to share what I’ve come to realize about these three foundational qualities for earning trust.

1. Beneficence

The importance of beneficence is, ironically enough, that people are interested primarily in themselves – and so they look to engage with others (people, organizations, brands) who are likely to give them something that will benefit them personally.   A good company that does nothing for me, personally, is not one in which I seek to engage, or in which I place much trust when they insist I ought to pay them for doing their work.

That is not to say people are entirely one-sided and selfish – they are generally willing to give something of fair value in exchange for what they get (cost for benefit), but only if they trust that the other party will indeed render them some benefit – or to render a benefit for another person for whom the product is being purchased.   They expect that the others with whom they deal are also self-interested, and recognize that striking a deal means that the outcome will be mutually beneficial.

As such, they are wary of deceitful individuals – those who do not intend to give the promised or intimated benefit in exchange for what they ask in return.   There are many individuals and companies that seek their own profit and to escape the responsibility of giving anything in return.   And the expense-reduction approach to business seems to encourage charging as much as possible while doing as little as possible in return.  Great for shareholders, horrible for customers.

To be perceived as beneficent, a provider must be trusted to deliver the benefit that has been promised, and not all are.   Many companies are quick to process payment but slow to process shipment and utterly inaccessible to resolve problems after the sale, and earn the poor reputations that they have.  Meanwhile, companies that are known for going the extra mile to ensure that the customer gets the benefit he paid for will earn loyalty and recommendations.

Customers’ primary motivation in purchasing products is to receive the benefit, so being able to trust that the benefit they are paying for will be delivered, and that the provider is earnestly interested in ensuring that the benefit is delivered, is the first and most critical element of earning trust.

2. Competence

Competence pertains to the technical capability to deliver the benefit as promised.   It is not enough for a firm to wish to deliver a benefit, or even earnestly intend to do so – it must actually be done, and to be trusted, a firm must create the perception that it is competent to do so (and to get the second sale, it must actually demonstrate this competence in delivery).

This component likely needs little elaboration – firms are well aware that customers value competence, and current marketing shows no deficiency in making claims and offering proof of a firm’s competence.  And it is very important to establish competence, though it should not be done so emphatically as to exclude any other consideration. However, there are at least three significant areas in which competence remains a serious issue:

1.     Services.   There is far more trust in physical goods than in services – whether service is the entire product or merely essential support for a good.   People trust that one toaster is as good as the next, but not that one repairman is as good as the next.
2.     Customer Competence.  Many firms still take the attitude that the customer is sole to blame if he fails to gain the benefit promised because he configures or uses a product incorrectly.  The need to provide guidance and support is still great, and is greatly neglected.
3.     Relevance.  Very often, the things at which a firm is most competent are irrelevant to the customer – but firms brag about them anyway, pointedly neglecting (or hoping to distract from) areas in which a relevant competence is sorely lacking.

Ultimately, satisfying this criterion means that there is competence in delivering the benefit – and one’s intentions, skills, and capabilities are meaningful only if they are instrumental in doing so.

3. Reliability

A reliable provider is one who can be counted on to do what they have promised.   There are many instances in which a person or firm is genuinely interested in doing something and has the capability to do it, but simply does not – whether they encounter an obstacle or simply lack the integrity to follow through on their commitments.

As with other qualities, it is largely the perception of reliability that leads prospects to engage in their first transaction – they believe, based on claims or secondary evidence, that a firm can be counted on to deliver the value it promises.   Reliability is a particular problem for firms that are engaged only once, or once in a great while.  Unreliable firms can fake evidence of reliability, and reliable firms have a difficult time getting prospects to believe in their reliability.  It’s largely a matter of faith.

But for the second and subsequent transactions, the perception of reliability is based on each customer’s individual experience with the brand.   If a transaction is satisfactory, the customer will return to re-engage and will likely encourage others to do the same; if it is not satisfactory, the customer will seek a different solution and may discourage others from engaging with a brand.

Companies speak of their desire to have “loyalty” and “advocacy” from their customers – and much of the literature suggests that they believe that there is something wrong with customers who are not loyal and do not advocate for their brands.   But from the perspective of customers and prospects, it is the brand’s own reliability that is the issue.   The high level of interest in earning loyalty/advocacy is testament to the high level of problems with reliability – companies that routinely deliver on their promises have no such issues, and have a substantial number of repeat buyers and advocates.

All or Nothing

The three foundations of trust are all critical, and it’s insufficient to satisfy only one or two of them.   Consider this …

·      Competent and reliable, but not beneficent – Is the firm that delivers a product that provides no value to the customer.   This wins admiration from non-customers, who admire the brand but feel no need to buy the product.
·      Beneficent and reliable, but not competent – Is the firm that genuinely means to do well and will be responsive when called upon, but simply cannot seem to deliver on their promises for lack of technical skills.   This wins sympathy, but not repeat business.
·      Beneficent and competent, but not reliable – Is a firm that is willing and able to deliver value, but doesn’t take an interest in actually doing so.   This wins a lot of one-time customers who never come back and discourage others from engaging with the firm.

Simply stated, trust is all-or-nothing.   While people will express that they “kind of trust” a brand or “trust it a little bit” that is not sufficient to secure their patronage.   They may reluctantly engage, half expecting to be disappointed, and give a firm the chance to earn their trust based on their beliefs – but it is their experience that will get them to close the deal, come back again, and refer others.


Again, trust is a difficult and nebulous issue, so I will concede that this may not be comprehensive – but after much thought I do feel confident in the belief that any firm that convinces the customer that it is beneficent, competent, and reliable will win their business, and a firm that demonstrates these qualities in action will win a loyal and vocal following.

To put this information to practical use, I suggest considering the verbatim remarks of customers who have switched providers or who have chosen not to engage in the first place.   There will be complaints that the price is too high, that the product doesn’t have certain features they want, or that it’s inconvenient to shop – and these should certainly be considered.  But pay specific attention to the remarks that indicate problems of trust.   These are more subtle, and far more insidious, than the more common and obvious problems that non-customers or ex-customers will identify.

Ultimately, price, quality and ease are less important.  Again, people can routinely be seen to give their business to providers who are lacking in all three of those areas.

Having attempted to remedy them for so many years I have come to the sense that the complaints will never go away – no matter what you do, people will always want cheaper, better, and easier.      But if you get trust right, people will do business with you and advocate for your brand in spite of deficiencies in these areas.

Monday, May 4, 2015

Nine Qualities of Optimal Experience

Positive psychologist Mihaly Csikszentmihalyi has explored the various qualities of “optimal” experience by interviewing individuals about activities they find to be engaging, and provides a list of nine common factors:

  1. A clear sense of purpose.  In contrast to daily activities, in which we do many things in a ritual manner, flow activities involve a clear sense of purpose and the actor knows exactly what he needs to be doing at each step of the way to progress toward his goal.
  2. Immediate feedback.  Enjoyment occurs in activities where the actor knows right away that what they have done is correct.
  3. Challenges are balanced to skills.   We enjoy activities that are not easy, but are not beyond our capabilities.  To simple a task results in boredom, and too difficult a task results in frustration.
  4. The mind is focused on action.  In most everyday activities, we are thinking of one thing while doing another.  In a flow activity, the mind is focused on the task.
  5. Distractions are excluded.   Likewise, distraction is detrimental to the work – if a person who is attempting to do something is even momentarily distracted, he will be unable to succeed.   Flow often exists in individuals who are not troubled or anxious about other things.
  6. Failure is an option.   When we are too obsessed with achieving a specific outcome, our focus is on the product and not the task and there is constant fear and worry of not achieving the desired outcome, which itself becomes a distraction.
  7. Self-consciousness disappears.   The person may become a distraction to his own work, as acute self-awareness is a burden.  There is often the expression that a man merges with the tools he uses to do the work, and the object he is acting upon fills  his whole consciousness.
  8. Time distorts.  During a flow activity, the actor loses the sense of time.  Hours may pass, but to the actor feels that it has been only minutes.  In some instances, the opposite occurs: a person may be so intent on the granular details of a specific action that time seems distended.
  9. Activities become autotelic (an end in themselves).   The actor enjoys doing the activity, rather than being motivated by the desire to achieve some extrinsic goal, even the one resulting directly to his activity.

I have the sense that much of this work is applicable to customer experience.   Though commercial site operators may balk at some of them (“failure is an option” means accepting some interested prospects may fail to purchase – which is entirely unacceptable, though likely quite true) and others may be beyond our control (the notion of time distortion is likely dependent on the subject’s intensity of interest), there’s a lot here to work with.