Think before you send out that survey

What matters?  What you say?  or What you do?

Can we learn from a binary answer? There’s a lot of clarity when given a simple Yes or No,  or asking if we do or don’t, differentiating something  good from  bad. Sure the world and people’s sentiments are often less definitive or clear. The world is full of gray and people tend to shy away from declaring something absolutely black or white.  It’s why metrics include scales.  It’s been hot, but if I want to know just how hot, I need to measure it.

Similarly, if I want to know more about how you feel, introducing a graded scale allows you to tell me something differently than forcing you to choose between extremes. The challenge is whether survey questions really get me there.

Surveys are fine instruments, when the universe of responses are “known,”  or the scale of measurement standard. For example the difference between below 32F and above differentiates freezing. Or 3 inches is one inch more than 2 inches. Measures of sentiment, belief or attitude are very difficult to standardize.

I began my career forecasting elections for CBS News.  The survey questions were very direct as shown here.  The tabulations were equally direct. Not only were the samples very carefully drawn but the population was also carefully estimated and provided a very solid denominator.  Survey responses were voluntary but  deliberately framed whether the pollster asked questions over the telephone or in person interview. The results predicted with great accuracy final election results and helped CBS and the other news outlets advantage to call winners before the real poll results were officially tabulated.  It was the point of their surveys, right? Both candidates and news outlets conduct surveys to get an accurate handle on which way voter sentiments are going.  The information is doable, insightful and thus useful.

OK, some questions are worth asking because it helps people warm up and get them to tell you what they really think or what really matters. But too often we want to know about sentiment and are not very good at framing the question.  It’s in these cases that the scale matters.  Frankly I’m tired of sifting through survey results that don’t deliver. Surveys by themselves don’t engage someone and the results often reflect their level of engagement as opposed to their true sentiment on the subject. The more concrete the option the more valid the results.

I admit I’m a sucker for information, especially when the promise of learning about my prospects’ their attitudes, desires, interests, needs and concerns is freely available.  But in the end I get what I pay for, yep, absolutely nothing.

Asking gets you where exactly?

Surveys, we hope, allow us simple, objective, opportunities to ask what we want to know.  The large sample surveys that characterize much of the information being gathered by large consulting firms, and in which I’ve been a participant, don’t live up to their promise of cultivating knowledge or insight about their customers.  In my view the approach is old school. Their ubiquity signals the ease with which surveys can be constructed, distributed and analyzed.  We can get more for less; and at the end of the day, very little of it is truly useful or provides real insights.

I wonder why C-Suite executives take part? What’s really in it for them? Do the questions draw them in and increase their attention to the topic? The receipt of results serve as quid pro quo for their input and clue them in on the feelings of their peers. That’s worth something, but again old school traditional competitive behavior doesn’t allow you to formulate strategies that deliver economic advantage.

Here are two examples of survey findings, you tell me if I’m off base.

CASE #1

The Wall Street Journal’s CIO blog last week  referenced a new study from McKinsey & Company.

  Roughly 49% of those surveyed said they are currently using Big Data to understand their customers better, while a combined 32% said they are currently using social media to interact with customers or promote their brands.

 

The survey asked 1,500 CEOs, CFOs and CIOs, in the first two weeks of April 2012, about three key business technology trends: Big data and analytics; Digital marketing and social tools; and flexible delivery platforms. More than half of the respondents  reported that the first two had made it to corporate strategy agenda’s  top-ten priority.  “In fact, for each of the three trends, between 6 and 9 percent say it is their organization’s top corporate priority.”

HMMM …wonder what that really means?  The report went on to say that ~1/3 of the executives reported their organizations looking to these trends to build a new business or tap into new profit pools.  The kicker for me about the survey and its limited use hit home when McKinsey turned to ask whether their budgets included support for these priorities. I  encourage you to take a look if you’re questioning my thesis. McKinsey notes interesting differences emerged in the findings “the discrepancy suggests the management team may lack clarity or a consistent concept about the investments needed to support digital business.”

CASE #2

The IBM 2010 Global CEO study discovered that CEOs cited creativity as the most important leadership quality over the next five years.

Further IBM’s  report stated innovation needs to be CORPORATE activity, not just an R&D activity.

Are your answers to these questions any different?  What would you say is the most important leadership quality for business leaders over the next five years? How do your rankings compare to the ones shown in the graph?  I suspect, but don’t know as I didn’t actually test this, average citizens might respond similarly to CEOs because the question is so general.  Why?

Improving your information relevance quotient

Have you ever asked a question when you knew the answer?  As in “Isn’t Coke the best drink on the planet?” I don’t mean to disparage the authors’ and analysts’ objectivity in creating and conducting these surveys, or criticize the soundness of their methods. These survey results represent sentiment when the value I’m seeking comes from behavioral insights best obtained from other methods.  In the end, the survey results merely add to the growing pile of information that has limited direct use and grows stale quickly,  but cost time and energy to collect, tabulate, analyze and distribute.

What other evidence would corroborate findings around important CEO qualities?  The available data would have to be public and somehow connect to actions undertaken by CEOs.  Where do you look?  You could mine their public statements or interviews, and you could look for supporting documents such as investments, resource allocations, new initiatives and the percentage of funding.  The good news? Gathering, sifting, reviewing, compiling and delivery the infomration with or with some analysis is easier than ever.  I’m just surprised that IBM, a very savvy research firm hasn’t begun to compare the two and shared its findings. Watson is good for more than winning at Jeopardy right?

In the next few weeks, I hope to try out a series of tools myself.   For example, I learned this morning about  Attensity. Text analytics systems are the plow horses that increase big data’s yield,  put to work by none other than Google to enhance their search algorithm. Do you remember when Google used to share the liklihood that their results matched your search?

I’m a big believer in skipping reinventing the wheel, so if you have done this analysis or know of any,  send them my way. I’ll keep you posted on things I find.

Are you tired of reading or even seeing trending information that lacks clarification or proper weighting?  If so, I’d love to hear about your experiences and any solutions you are finding promising.

Alternatively if you do find the survey results meaningful or actionable please share what makes these types of reports valuable to your work , or improve the outcomes of your tasks?

Social Media great for insights not prediction

An example of the share buttons common to many social web pages. Thanks to http://www.nouveller.com for the free icon pack image. The author (Benjamin Reid) releases the image into the public domain, with the following text available at the source page: “You can use them anywhere you like, absolutely anywhere, anything. No attribution, 100% free.”. (Photo credit: Wikipedia)

Is it really surprising that on social media, generally speaking, people share more emotionally linked thoughts?

What People Really Want vs. What They Share on Social Media.

For my money this is not much of an insight.  After all, humans, like many other animals, are social creatures. From birth, our lives depend on others. In time, those who bring us along and introduce us to the ways of the world nurture specific beliefs and frame our understanding of the world.  Our connections to others are vital to our survival, happiness and success.

Social media simplifies our ability to share and connect. The social impulse that compels us to take part naturally mirrors underlying, maybe even unconscious emotions. The result is a natural  association between content and intention rooted in sentiment. Following the tradition of anthropology, or design research, self-reported assertions such as our tweets or Facebook updates can prove revealing. Tracking and tallying these qualitative data crumbs outline a wider system of association linkages and are wonderful additions to descriptive analysis. Whether linked specifically to more traditional demographic variables or not, they show characteristics,  detect relationships about something or someone; but are no proportional in their representation.

Infographic on how Social Media are being used, and how everything is changed by them. (Photo credit: Wikipedia)

So what’s the problem? Insights don’t scale. The accompanying graphics suggests that there’s added value, and maybe there is for the casual observer, but at the moment I’m not convinced.

Problem Re-framed

Last week, I shared lunch with a group of people familiar with both quantitative and qualitative research methods to talk about big data.  Design, or anthropology, research methods focus on observing very small groups of subjects in natural conditions.  Watching people as they shop, work, make dinner, go to work etc. The data and analysis skews to the qualitative. Watching what people do has always proved to be more reliable a predictor than asking what they think. Researchers long ago discovered the knowing vs. doing gap.

For the less statistically inclined, probability sampling is necessary but not itself sufficient to make claims about a larger population group.  Exercising diligence in selecting a random sample to ask a series of questions, or observe them can still produce bias or large errors in the results if input from those who respond or were readily available are included.  All surveys include a margin of error due to sampling. National voter exit polls, for example, carefully sample to keep their  margin of error for a 95% confidence interval low, e.g. about +/- 3% . ( For further information check out: Edison research on exit polls)  The margin of error on public opinion polls asking what people believe and for whom they plan to vote is wider than the post voting survey results taken at the polls.

Diary studies illustrate the value in subjective research. Sure, the results are challenging to extend and difficult to scale as the richness of this data does not easily lend to classic systems analysis.  Often in the hands of the experienced researcher, the subtle presence or absence of contextual cues lead to new insights, or deeper understanding of the situation, or present circumstances responsible for a behavior.  Researchers isolating the specific cues come closer to understanding our inner nature and then developing insights into cause and effect.

Build it and….

The inspiration implied in the phrase if you build it they will come, suggests knowledge of what and how to build, this intuition may come from subjective research.  Note, the phrase is neither strategic or predictive of the number or timing of visitors.  Contrast anecdotal indicators to an algorithm churning through significant quantities of transactions to find common elements, the co-related information.  Observational data offer context, while the algorithm provides the measure of total significance.

Cover via Amazon

If we’ve learned anything from the work of the behavioral economists, humans are predictably irrational.  Why?  The relative strength of an emotion can but doesn’t necessarily overcome reason.  The contextual elements trigger both specific behaviors, as well as unexpected associations and very different behaviors.

We are far from understanding how to successfully integrate expressed wants social media provides with analysis of objective, aggregate data.

As Steve Smith, of Pegasus Capital Advisors suggests, there is great power in pushing the economics analysis up the value chain.  Social media doesn’t create the transaction, the risks focus on reputation which has implications but has yet to disrupt the flow or more accurately allocation of capital.

I’m looking forward to seeing the continuing evolution of social media and the teams of marketing analysts familiar with statistical sampling to help chart a new course. It would be

great if they can help lead the charge toward a more robust metric of success.  One that favors the quadruple bottom line and thus captures Environmental, Social, Cultural (including governance) and. Economic factors.

Growth doesn’t elude those who connect to customers

Jeff Bezos and anyone else holding Amazon stock must be pretty happy this past week after seeing the stock shoot up 15 % as the last quarter revenue was up 34%.  Grwoth and performance are the cats’s meow in capital markets!  But Amazon is afterall just an internet company, right?  Steve Henn of NPR interviewed Ben Rose, president of Battle Road Research who offered a little perspective. 

 while Amazon made $190 million dollars in profits last quarter – McDonald’s, which is now worth less on the stock market, earned more than 1.2 billion. .. the reason so many investors are excited about Amazon is that it is growing – fast.

 

Fast growth means a lot to the street, investors as well as senior managegment.  The double hockey stick, or ability to repeat performance over time before hitting the point of stagnation sounds precisely in keeping with our expectation of CEOs and yet their inability to knock them out of the park consistently puts Bezos into a very exclusive class.  

The difference in earnings for  Amazon and McDonalds illustrate that there’s a lot more to the picture. Rapid growth requires more than stepped up demand, but an ability to also step up quality, supply and  delivery efficiency, generate positive experiences while sustaining your reputation increasingly matters.  

For years, McDonald’s strategy for growth emphasized opening more restaurants to reach more customers. The problem was that as the efficiencies from scale began to stagnate , flattening the upward  trajectory of the growth curve.  As masters of scale and efficiency and even quality, the price advantage certainly helped them during the recession but by their own standards of success they recognized they needed to do more.  They turned to their innovation team and began to set in motion a series of tests that not only allowed them to upp sales per customer but returned their growth rates to an upward trajectory.  Design helped them completely shift their thinking and relinquish some of the central control and dictates allowing the individual outlets flexibility to satisfy the local tastes and prefrences from menu items to the restaurant design itself. 

 

The shift from central to decentralized control  is not merely the return of the pendulum swing. 

 John Kotter, writing for Forbes,  observing the ever-increasing rate of change and the inability of many organizations to thrive, also observed that static management principles stymie timely transformations.  What stops organizations from adapting or flexibly responding to the larger dynamics at work in the market?  

20th-century, capital “H” Hierarchy (a sort of hardware) and the managerial processes that run on it (a sort of software) do not handle transformation well.

I read this comment and immediately began to understand something I had failed to grasp.  It’s easy as an outsider to recognize and empathize with the challenges of an organization whose leadership voice the words and know deeply they they need some of that innovation. I thought it was thier lack of vision, or their inability to appreciate and value the customer experience or a series of solutions that have been echoed in innovation circles by business strategy, design thinking  and change management professionals.  What I missed was a lesson I had learned and quickly forgotten because it was a painful chapter when I worked for Fortune 50 banks and found myslef the change agent.  Most managemetn teams are responsive up the chain, and in my experience the marching orders they followed were reinforced with clear rewards for delivering performance. 

Getting to the C Suite requires making all the right moves, delivering the results that were expected and that’s the system you know. The trend to outsource was an innovation to cost reductions and creating efficienciey when what mattered was being lean and oil was bad for your diet.  Consumers adapted becasue they never did know the difference between a local company paid customer service rep who spoke english and seemed to know the score and one paid by an outsource firm and could repeat the tasks for multiple companies.  

The price for that efficiency is the loss of control, the ability to truly be agile, nimble and responsive to shifts in the market. You may have surrendered to the forces that Joe Pine describes commodotized your business, swapping out tasks to experts while stepping up the your investment in the new new thing.  

The entrepreneurs who are running circles around the larger providers can do it becasue either they control every inch of their value chain, or the are able to begin by leveraging technology that is fully integrated, seamless and allows for transparency across the system. 

Its unclear how long Amazon will be able to keep up their growth rates by challenging new business sectors failing to make the transition.  Revisiting your structure and decision-making hierarchy certainly helps ….

Help others tell your story

Every time we open our mouths words come out. But people listen and naturally attend to stories. Really,  they do, they are far more effective, persuasive and enjoyable. let me explain. There is a pattern and a sequence that is far more subtle than merely having a beginning, middle and end. A story is a summary of an experience.

If you are lucky enough to spend time with three-year old children, you will notice that they typically don’t bother with  pretense, they go straight for the action.  They don’t care who as much as what someone else is doing, and then they pretty quickly want to do it themselves. We begin to mimic others as babies and by the time we push past toddling, we have enough language and ability to connect our movements to get what we want or more specifically compels us to do, to take, to grab and engage.

Direct experience in my mind remains  the best way to learn; but it’s also what gives voice to the stories we share. It’s exactly why if you’re not telling stories that your customers, clients and friends can repeat about you, then you are missing opportunities.

I know, because my story is malleable, liquid. It took me a long time to suppress my enthusiasm and obsession with detail to notice that I was losing my audience. Then again, we often are quick to qualify if not underestimate our audience as well by not giving them a clear handle on our interests, capabilities.  A one word label isn’t a story, but a simple gesture generates responses that put you on a path to a shared story.

Map of Chicago's community areas, grouped by color by "side" (Photo credit: Wikipedia)

A neutral simple question such as where do you live can open or close the conversation.  When people ask me, I try to honor their knowledge by asking a question that helps me formulate a meaningful response.  I could simply answer with the name of my neighborhood, or even the town where I grew up, but very few people find them familiar.  I offer them a couple of larger landmarks or reference points and then lead them to my place.  But I don’t stop there.  Because I want to share a little of how it feels to live with south and east facing windows a mile or so from the center and magnificent skyline that characterizes Chicago,  I paint that picture.  Then I add in something about the diverse ethnicity and history of my neighborhood.  How the first time I stepped out on my balcony, the building was still under construction missing interior walls, and I discovered it was my destiny to live here.  That day in February was typically cold and overcast.  My eyes took in the panorama and tracked past the major intersection, gravitating east and focusing on the storefronts until in the middle of my frame, a billboard separated the street and the dramatic skyline.  For me an iconic image came into focus on this west-facing wall.  The bold black letters read Kaplan’s against a fading wash of yellow.  I suspected it was my great-uncle Dave’s store , which I instantly confirmed with a phone call to one of my older brothers.  I looked to live in this neighborhood because it was near where my mother had grown up, and the coincident discovery that I was between my parents childhood travels I realized I found my new home.

Were you listening? or was your mind painting some pictures?  The brain, cognitive psychologists explain, backed up by work in neuroscience, psychology and economic research, loves stories.  Rather than demanding attention or confronting people with facts and figures to present your case, tell a story.

Help your customers, clients feel at home with you, your products and services by taking them there.  Are you telling them the what, or the hows without the why?  In an era of information and sensory overload, consumers are finding it simpler to control, filter or ignore your message.  The brain’s two systems–the limbic and neo-cortex (or the sensory and thought processors) naturally filter input based on prior experience and novelty .

Think of the limbic system as the bouncer, it only allows the sensory data that passes muster to get through tho the neocortex for further processing.  In those moments where you can’t think straight?  Paradoxically, you must be pretty “safe” or the limbic system‘s antennae would shut down access.  Conversely, our multitasking abilities  support several functions at once, and make it possible for us to daydream while driving, walking, reading , cooking etc.  Data is instantly routed and cues up behavior that after the first experience quickly  reverts to routine processing. Uncannily, we can simultaneously breathe, walk with great coordination, even whistle, listen to birds, notice the flyers and traffic as we gently negotiate our surroundings, think about a novel we are reading,  or dinner scheduled later with friends while half listening to the chatter of a child who is holding our hand.  That is until you’re confronted, disrupted or challenged.  “Are you listening to me?”

The challenges are ever-present. Each of us want our own messages to be heard, our presence known, fully considered; yet we also want some natural escape and respite from the omnipresent sensory assault on our bearings. Story, regardless of the subject or language, our brain finds them comforting.  We relax and naturally attenuate to stories.

More often it’s the emotions not the facts and figures that sway our conscious brain to check in. Few stories in our lives begin with once upon a time or end in happily ever after sentiments.  They don’t need a formula, yet there is a pattern.

This week, Northwestern University’s Kellogg school of Business and Segal Institute of Design hosted a conference.  Academics and business minded professional came to hear about the ROI of Design.  The accomplished presenters demonstrated how their focus on bettering experiential elements created comfortable contexts and reference points of customers and the financial performance gains that followed.  Each presenter shared stories of the transformations in their respective businesses, from the perspective of their customers.

Sure, there is much more to storytelling than discerning a beginning, middle and end. The more we appreciate and acknowledge the value of the experiential elements on our customer and audience, the more stories become the byproduct.  Your customers will be telling and sharing stories about you–what are you doing to help them tell good, if not great ones?

I promise I won’t leave you hanging wondering how to be better at story making, but in the interim go test this hypothesis.  Take some time to be a better listener and surprisingly you’ll discover how you will naturally find a story that matches what you are hearing, but the story will be yours, authentic to you…not because you lived it but you own it.

Taking the jump

Kansas' Thomas Robinson (0) fights for a rebound with Ohio State's Deshaun Thomas (1)

It’s hard not to be swept up in the enthusiasm and excitement of the NCAA basketball tournament finals.  In the men’s final, Kansas Thomas Davis and Kentucky Anthony Robinson may be taking the lions share of the attention, but this is basketball, a team sport.

March madness,  aptly named doesn’t merely test the NCAA players’ individual strengths and abilities, it also tests the players’ resilience in the face of intense competition.  The tournament teams demonstrate performance derived from a highly orchestrated and elaborate combination of planning, coordination and engagement, all of which  makes the games so watchable.

Recruiting the talent, the vision and leadership of the coach, the  mechanics of the practice regiment, codes of conduct, the branding of both the tournament and the individual teams and the general environment converge to attract the network contracts and endorsements that all create the frenzy atmosphere of the tournament.

The value of Together, or Team

March Madness may be about college basketball but it’s also a lesson about  performance which if extended into other domains could change the reverence for the power of the individual,  the dominating paradigm in American culture.  Let me explain.

Vision, inspiration is often associated with individuals, especially those who take on leadership roles.  In any sport or any physically demanding activity, an individual earns recognition based on their level of play,  raw ability and talent. In American culture our heroes are largely sports figures because they illustrate the best of what’s possible. Independent of their ethnicity, their socioeconomic status or native environment, their natural talents catapult them to success.  This is the idea behind the phrase picking ourselves up by our own bootstraps.  Sure, ability plays a role, but there’s far more at work and if we don’t recognize it and help others understand it, Americans will fail to get the success that follows when we take the jump  whether we make or miss the shot.

Reflection and broadened horizons

One crucial piece of vision includes the coach, an individual who  receives significant credit for the player’s realized success.  The strength of a coach, who may or may not have been a former player or performer, recognizes that the vision of victory must be shared.  Sure, the one player who may see they have a shot needs to consider whether someone else may have a better chance of success.  The collective, or how one player’s strengths can play off  another, requires a collective vision of victory, that relies on more than a single player’s ability. Successful coaches promote the best of the abilities in all their players, not just the stars. In basketball, the unparalleled success of Phil Jackson extends from what he gives. As one of his players explained, he learned how to give themselves to something they never thought of before. The Washington Post in 2009 suggested Jackson’s success extended from his willingness to broaden his player’s horizons to try things  and challenges beyond basketball.

Unlike school, the NBA is not the place for unproven or untested stars, so Jackson started with a great talent pool.  But few players who ever played under Jackson’s leadership will deny how much greater he made them.  He takes individual stars, and teaches them to be great leaders and confident thinkers and not just executors.

Performance is an art form 

Performance is an art form. No results are certain, no matter how well a team practices, rehearses and plans. Basketball players recognize no matter how great their individual contribution,  the game depends on coordinating their actions to seize the opportunities as they present on the court.  They have to look beyond themselves, learn to help their team mates move and position themselves in response to the events as they unfold.The only way to gain that trust is by working with each other on and off the court. After all, success is determined by the number of games the team wins and loses which includes not only the combined tally of every player’s winning shots, but their assists and passes and blocks.

In school, children are taught to work in teams too, a transfer of the successful team approach. Evaluation however remains stuck on measuring how well an individual performs and largely ignores the impact of the collective effort.  We judge schools and teachers by individual performance scores on standardized tests and miss the value of assists, passes and knowledge sharing.  Missing the parallel to “the game”, or the tournament, limits the validity of students’ ability to apply and execute what they have learned in more natural environments.

OK what about in your organization, what parallels to “the game” do you use to measure the interdependency of the combined abilities that  you’ve hired?  How often does the hiring plan take on a balanced approach? Who is the coach that goes out of their way to help individuals work and play with each other better?

Performance in the mix not the individual

American organizations need to learn and replicate more of  what Phil Jackson does, maximize potential in everyone. Scott Williams blog suggests “He creates a culture of focused chemistry.  The number one priority in coaching and leading is to create a strong culture by developing leadership, empowerment, communication, authentic care for others, relationships, trust, and motivation.”

Much to the benefit of every American, it’s not just successful basketball coaches who recognize that helping individuals persevere, and self-correct during times of challenge and crisis is a critical skill set.  HBR blog on leadership recounts how the US army, includes resiliency as part of its overall leadership training. The curriculum’s success depends on getting people to think about their thinking, or what psychologists call meta-cognition. Beginning in 2009, the Comprehensive Soldier Fitness program draws on many of the same principles that Jackson uses to differentiate both his approach and the teams he has coached.  For example CSF teaches individuals

“To identify and leverage their own strengths and the strengths of others to overcome challenges. People are on a team for a reason, so figure out why and let them use their potential to accomplish the mission.”

Self-reliance, deeply embedded in the American character shaped the philosophy of the school system and the character of many of our entrepreneurial heroes.  The inventors that idled alone, the industrialists who knew how to make prudent investments and the more recent code jocks who have helped create the future.  They all find the area that maximized their particular abilities and strengths, right?  They took the jump shot and it paid off handsomely for all of them.  They didn’t make every shot, but their own persistence and resilience helped them win as they battled against the tide. They fundamentally believed they could make the shot they did and just as importantly they kept trying, they didn’t give up they didn’t let the system define them, or limit their talents.

I’ll close with some perspectives from Sir Ken Robinson who advocates for an end to the linear thinking and persistence of knowledge frames that don’t enable different strokes for different folks. If you haven’t heard this talk, I highly recommend it.  The hallmarks of standardization and consistency for efficiency characteristic of the American school system that measured personal merit quite narrowly, contributed to pyramid style organizations that excluded creativity.  We need to regain the ability to value an array of different types of performance, to measure performance based on the cumulative interactions of multiple strengths and abilities. I’m not advocating for more variance on the indicators or standards we have, but more variety in what we recognize as performance that counts.

We have made college too big a prize, in spite of the most famous college dropouts business success. Like the army, other organizations need to help people develop the strengths and confidence at every stage to keep working at learning and to keep practicing, the very qualities that make high performance and resiliency possible.  We need more leaders, like Phil Jackson who are willing to prove the clear value of every member of their teams contribution but works with each to develop their skills and abilities.

Realized opportunity, value of real customer conversations

Stuart Elliot writing on advertising for  New York Times described the purpose behind Omnicom Group’s launch of a new ad agency, sparks & honey.  The Agency seeks to capitalize on the latest evolutionary shift in the relationship between consumers and marketers, “from a monologue to a conversation.”

Customer services (Photo credit: gordon2208)

Really? Brands have accepted that talking with customers no longer means talking at.  But are they really ready for interactive conversation?  Don’t get me wrong, I applaud the move to a higher level of engagement.  I merely wonder how the brands benefit from advertising agencies occupying this intermediary ground, especially when the brands livelihoods increasingly depend on their ability to respond immediately.

Implicit in a conversation is receiving, or listening made clear in non-verbal posture and behavior as much as  words.

As Dave Carroll’s viral video demonstrated, brand reputation can suffer when listening isn’t followed by appropriate responses.  Brand management teams everywhere noticed how translating a bad customer service experience into song  boosted Taylor guitars‘ reputation while tarnishing that of United Airlines . What got Carroll’s goat was the lack of response by airline employees watching other employees  manhandle his precious guitar.  The colorful story in the hands of a capable songwriter also boosted, if not fired up, Carroll’s brand.

To relegate the story as an abject lesson in Customer services misses the wider opportunity listening to your customers affords.  Either way, how will hiring a savvy intermediary help resolve issues, deliver authentic feedback to product development or spawn key insights into the changing behavior of customers for helping a company adapt and ultimately survive?

Why would a company want to pass on the opportunities listening and responsive internal systems can foster?  There’s great value in using smart analytic systems to mine the exchange of key word morsels caught in dialogues with customer service, sales or technical support.

As Peter Shankman, steak lover, discovered one day last year when he had no time or energy to grab dinner out,  but longed for the simplicity and consistency of Morton’s reliably delicious meals. As he describes it, one tongue in cheek tweet before taking off for home resulted in the surprise service of a lifetime. One only Morton’s could coördinate and deliver because they were listening to one of their most loyal customers far from home!

So, yes it matters, what conversations you are trying to make happen.  Increasingly you need to collect the data.  This requires that you will need intelligence gathering or listening posts everywhere your customers are talking about you, including  the virtual conversations. Just because they seem less critical  than face to face exchanges, especially since the nature of the medium is slightly off sync, today no conversation can can be ignored. What customers say, how each of you share it,  and with whom makes them both dangerous and advantageous.  Machine learning systems, algorithms and human insights can  track ”the emerging cultural waves”  and that’s how sparks and honey plans to find and then leverage them.  Their business model relies on  their ” proprietary next generation, real-time engagement engine to distribute culturally relevant brand content.”

In the era of big data, business intelligence software has been actively integrating the new feeds and applying similar processes.  The merging of collaboration, productivity  and newer intelligence tools that digest  input from a variety of listening posts shows great promise and opportunity. I haven’t seen Cognistreamer, one of a number of  collaborative and innovation platforms; but I understand it combines feeds from social media, customer service and internal correspondence to allow more fluid interaction across sources operating within and outside the enterprise. I’m sure IBM and Microsoft are busy at work bringing these capabilities to their platform suites as well, I’m just not sufficiently in the loop to know.

I applaud the move toward authentic conversation that can displace the reign of the focus group or on the spot pop-up survey whether it’s at the mall or online. But I’m not sure I buy that ad agencies, or even Dave Carroll’s newly launched Gripevine service, and clever communications can effectively close  the natural gap between producer and consumer.   If I’m looking for a custom fit, or personal response how can any agency deliver,  no matter how clever or deft at communications they may be, the goods and or service I’m seeking?

I wish sparks & honey luck, but I do hope that brands looking to capitalize on the rising consciousness of consumers are also thinking a little more about finding ways to share the responsibilities for insight and innovation across their enterprise.  Giving everyone equal opportunity to engage with customers and share insights that wider conversations make possible, is certainly a great start to creating an innovation pipeline.

ROA- getting the most out of your assets

Interest in Generating Earnings?  why wouldn’t you be?

Image via Wikipedia

Measuring hope

If your business found 2011 challenging, the business press heralding the boom in 4Q sales may restore your faith and hope that 2012 may prove to be a better year.  I know the President remains hopeful, as his re-election may depend on it.

More than an uptick in sales is needed to support your growing confidence in a brighter future.  Political, environmental and ongoing commodity pricing volatility marked 2011 to a degree that challenged the most sophisticated analysts and their understanding  of cause and effect relationships.  It’s time to re-assess fundamental management behaviors, expectations and adapt better to more recent technology enabled connectivity.

I’m not a finance person but too often the media and an organization’s management  focuses on driving revenue and overlooks the extent a firm’s existing resources or assets contributes to earnings –though they don’t miss noticing  when the resources drain earnings.

In every business, management recognizes the value in  measuring investment or competitive business activity and computing ratios to test relative performance. Peripheral, or more likely excluded from the mix is some clear trends that differentiate high performing organizations.  What am I talking about?

I’m proposing broadening the  strategic applications of  ROA and ROE, or Return on Assets and Equity respectively, as well as ROI-Return on Investment.

Scale and Efficiency

Technical management consultants for decades leveraged their understanding of growth based on efficiency or the inter-relationship between cost, time and output. Popularized by the likes of BCG, this experience curve framework demonstrated the value, as in competitive cost advantage that accrues in time with capability to achieve scale.

The predictive power of these curves, fairly easy to derive, and thanks to champions like Jack Welch, spawned an entire subcultures obsessed with perfecting scalable efficiency.  Though powerful, six sigma is not a sustainable strategy.  In 2011, innovation consistently appeared at the top of many a CEOs wish list ; with the challenge being organizational transformation to help them realize this new agenda in an uncertain economy.  Profits were falling, investment capital was shrinking with stock prices, so where or how could a new initiative find finding?  Plus the crazy nature of innovation was very hard to plug the expected payoffs into a P&L model let alone calculate an acceptable ROI.

The answer offered by John Seeley Brown, John Hagel at Deloitte and Peter Senge, among others, identifies an alternative  that growing connectivity technology is making ever more possible.  (see http://www.businessweek.com/managing/content/apr2009/ca2009043_775383.htm)

Unlike the efficiency framework where learning curves flatten or plateau over time (because production and training costs fall off proportionally as total volume accumulates), a collaborative environment conducive to increased connectivity helps the learning curve grow.  In this latter environment innovation occurs organically and correspondingly so will returns on your existing assets with little or no additional investment required.  For too long the focus has been to build process around efficiency of scale.  Don’t get stuck in the realm that Dan Pink describes as the mismatch between what science knows and what business does.

Appreciating value

Traditionally returns, like savings arise from the appreciation in value from the underlying investment or typically from under spent budgets when real costs come in below expectation.    How often are you measuring the former?    If you motivate or design your measurements and corresponding rewards too narrowly, the quality and impact achieved will be equally narrow.

Recently, I sat in on a conference call  while being logged into an interactive collaboration platform called think-tank by Group Systems.  The other participants, primarily  video conferencing system consultants, presented the financial case for these systems using ROI.  The C-Suite teams, always looking for bankable savings, could easily cut  travel budgets  and self fund  a state of the art Video conference system.   Old story perhaps,  but the consultants surprised me.  They weren’t talking about new installations, but about upping the usage of the pre-existing systems, already installed and, sometimes, fully depreciated.  In other words, their challenge was to help firms to realize the appreciation in value from their underlying investment, or calculate the Return on their existing assets.  For fully depreciated assets, even higher earnings can be realized  merely by changing internal operating behaviors.

In an environment where investment capital is scarcely flowing, the need to understand ROA  and raise its profile among all levels of management offers some interesting opportunities.  The number of desktops with intranet access within your organization offers the best start.  Chances are your IT department has plenty of tools at its disposal that with  support from training , leadership and example from senior management, together could release a sea change in communications, boost productivity, generate measurable return on human capital and offer additional cost benefits.

A lesson in Magnitude

Beyond your IT department who is looking at the volume of internet related activity or even monitoring the communications activities within your organization?  Perhaps your administrator or facilities staff track the usage rates of your conference rooms.  What do either of these volume metrics offer by way of generating insights  to your organization on how work gets done, or the efficiency and effectiveness of internal communications?

The Following statistics are offered as a  perspective frame for  technology enabled changes in communications.

• There are close to    1.97 billion – Internet users worldwide and 1.88 billion email users (June 2010).
•  25% of all email accounts are business accounts and
• Corporate users typically send and receive about 110 messages daily—18% comprising both real spam and “graymail” (i.e. unwanted newsletters, alerts, etc.).  (see  The Radicati Group, Inc  reportas of April 2010)
• 73 percent of Americans use their mobile handsets for both text messaging and picture taking. (see The Pew center for internet research report).

Note that in the wider world,  people are communicating in greater numbers on platforms other than email.

175 mill	600 mill	1.88 bill	1.97 Bill
Twitter	Facebook	Email users	Internet users
Sep-10	end of 2010	end of 2010	Jun-10

I’m betting that your communications behavior is one sure source of inefficiencies in your organization.  Try studying the electronic trail of decision-making, project management and progress reporting that transpires on redundant email threads and see for yourself.  Alternatively, if your office inbox has any message threads in which you are one of a series of recipients…chances are great that you’ve identified a large source of communications inefficiency, confusion and  redundancy.

Communicate to further learning

How many conference rooms or meetings, principally focus on getting work done vs. updating project or activity status? Cristobal Conde, CEO of Sungard in a New York Times interview articulates not only how to reap the time-saving benefits  micro-blogging offers, but  how deploying Yammer  (an enterprise social network like Twitter) across his organization was a boon to overall performance.  (http://www.nytimes.com/2010/01/17/business/17corner.html) He gladly swapped the hours on his schedule tied up in meetings to review results for time spent in the field talking directly to customers and clients, or helping teams solve problems.  How did he do it?  Leading by example–using SMS and the open accountability from shared, real-time BI.  Meetings were now always working sessions, never updates on project status.   The phrase Time is money takes on new meaning when considering people’s  time as a valuable asset and as such should waste it with activities or behaviors that fail to offer measurable returns.

Now,  I’m not suggesting a return to the days of time and motion studies to extract every ounce of productivity.  Rather I am suggesting that injecting some new discipline will generate returns and rewards that don’t all directly hit the bottom line.  How much continuous learning is going on in your organization?  I’d love to learn how others are acknowledging or even tracking that learning.  Impersonal  communications  or skipping direct interpersonal engagement deprives people and organizations  alternative perspectives and perceptions–the critical catalysts that lead to innovation.  Unlocking the thoughts and migrating the energy expended on routine note-taking, or email dialogues into a think-tank, such as group systems virtual collaborative platform  guarantees to accelerate results.

I’ve had the pleasure of collaborating informally with several different professionals who all understand the value of experience to differentiate and rank preferences.  One of the  more valuable insights helped me to understand that when we share news, we often intend to increase our knowledge or further our learning.  The more we all know that more likely we are to make use of that knowledge to mutual benefit.

Try focusing on optimizing learning efficiently  and you may surprise yourself with the value add that results.

American Airlines- power to return to the black

Image by millerm217 via Flickr

I’m saddened by the inevitability of American Airline’s (AMR) decision to file bankruptcy. In the last few years, the world has watched one industry leader after another lose its footing leading the pack.  Is the phenomenon  inevitable of the product life cycle curve at work?  My fear is the more we attribute this news as another sign of the structural weakness in the global economy, we may overlook an underlying ailment– withering resilience.

Leaders inspire followers

The recent move by American Airlines’ board signals the loss of faith in the capability of corporate leadership to restructure without the benefits bankruptcy protection affords. The boards’ decision places hope for the company’s future in what Stephen Lubben describes as the ability to restructure with speed.  (see American Won’t Be the Last Airline Bankruptcy).  Bankruptcy laws allow every contract to be opened for renegotiation.  Certainly in competition, speed matters. No one with fiduciary responsibilities should turn a blind eye to mounting losses or the clear discrepancy in the balance sheet between debt and assets plus cash–$.8billion in the case of American Airlines.  A comparison of financial results to forecast, or the simulations of alternative assumptions must have been clear earlier and should have raised questions, or at least challenged the executive team’s belief that the commitments they made would prove viable, right?

I urge readers to review either Sunday’s  New York Times   At American Airlines, a Departing C.E.O.’s Moral Stand – NYTimes.com.  The author, D. Michael Lindsay, and other sources continue to cite  competitive pressures that forced the board to succumb and  points out Gerald Arpey’s values commitment was distinct among a larger sample of CEOs.  His story may be noble, but I fail to see how his leadership echoed these values; and I am reluctant to herald him as a positive exemplar.

“It is not good thinking — either at the corporate level or at the personal level — to believe you can simply walk away from your circumstances.” 

In 2010 he held a similar position:

Gerald R. Arpey

“The path we have taken has created cost challenges for us. But I believe there is something misguided about how we measure success, if success is bankruptcy, giving pension obligations to taxpayers and not paying back creditors. By that measure, we have failed.”  (see Thestreet.com interview Sept 2010).

Arpey’s quotes ring  hollow in the face of his years at the helm. As CEO, he could have led the charge to measure success in an alternative way.  Should we blame the board for the AMR structure , its inherent decisions and commitments? Similarly, decisions that impact the company should rely less on competitors’ values, assumptions and next moves.  Instead the strategy should  show  a keen commitment and understanding of value creation, not ongoing obligations as Arpey argued.  Did Arpey lack audacity, proper advisors and/or the  market intelligence necessary to lay out a plan that would have positioned AMR   uniquely  in the marketplace? Sadly, being the last legacy airline to file bankruptcy, even if he disagreed, suggests a lack of leadership, and specifically a lack of followship.

Sharing Values delivers $Value

Heroes are often industry disrupters.  They buck the trend and prove their firm’s value in the marketplace by brandishing an alternative paradigm.  When the value created extends from shared values, consumers, employees and the firm are mutually engaged in a win- win- win strategy.

In 2008,   Joe Nocera, writing for the New York Times The Sinatra of Southwest Feels the Love  contrasted Aprey to  Ken Kelleher, upon the latter’s  retirement as CEO from Southwest Airlines.  Clearly strategic choices, when rooted in shared principles that link to planning can and do lead to higher performance. Aprey had faith but offered little or no inspiration. Kelleher built Southwest, and in doing so, he created and fostered its culture.  AMR’s Arpey, the most recent CEO  was a product,not a force for change within American Airlines culture.  At the shareholder meeting in 2008, he acknowledged  both necessary and inevitable changes for  the airline industry; yet chose to renew his commitment to shareholders and asked that employees and customers lower their expectations.  In so doing, Wall Street pounded the stock, resulting in a significant loss of value.

Aprey’s  demonstration of  differentiated principles in the face of deteriorating conditions seems to have laid the course for American Airlines subsequent decline.  The labor negotiations for pilots was on both their minds.  Aprey failed to lay a course  or inspire his team to re-invent and ultimately lay the foundation for another, more promising alternative.  By contrast, Kelleher renewed his commitment to his people without guaranteeing anything  to the pilots.

The idea of Shared Values is often confused with value sharing. The former a more universal presumption about a set of beliefs and the latter a calculated measure of utility. In a service industry, delivering value to customers demands a highly evolved understanding of meeting needs and desires. For example, how well does an airline deliver on an individual’s hope to be with family on the holidays?  Can that same airline deliver on another individual’s hope to get to a distant meeting and back for another commitment?  Calculating the costs of delivering value is trivial by comparison, in that the components are concrete, not fuzzy. Southwest was able to gain market share over competitors  focusing on being the low-cost airline provider and inspiring employees to deliver on that shared value.  Every decision made at the corporate level hinges on that principle and the results are clear in their resilience in spite of the hostile economic climate and changing regulatory environment that daily challenges their operating costs

Power in creativity

Mavericks like Richard Branson, another airline mogul and Ken Kelleher place their faith in people to be naturally creative. They consistently live up to simple principles and obligations they make to  employees, create a culture and foster ideals for employees rooted in a higher sense of value that is also shared by customers.  Their sense of economy, scale and flexibility extend to people at every juncture in their process.  Rather than take or assume full control they partner with their customers to share responsibility.  No advance seating, no meals just on time service at a low price. The company takes action, by helping employees focus on the goal that propels their entire business.  In other words they deliver customers safely and reliably from one destination to another and executive management puts  complete faith and trust in all their employees to do what makes sense to best deliver on that simple goal.

By contrast, Aprey did not have that working on his side, the culture at American and  the board’s action focused on their obligations to investors and put the source of their revenue, customers needs and desires second with  employees taking the last position.

Aprey seemed to have a clear understanding of the  principles behind product cycles, and production experience costs showing the predictable relationships between unit costs and cumulative output.  Increasingly it’s not technical prowess, intelligence or even relationships that differentiate successful leaders and resilient companies, but their ability to inspire.  The problems in the airline industry are not unique. The path to restoring profitability has always depended on operating flexibility and financial strength,  and Aprey was right to believe that it  doesn’t have to come at the cost of reneging on earlier commitments.  Decisions to speed up the restructuring by reopening every contract for negotiation suggests leadership who lost their way in the face of unexpected forces or circumstances.  It also is evidence of an inability to inspire, believe and uphold universal shared values.

I’m betting there are plenty of unsung heroes inspiring creativity and bringing about change at speeds that don’t require bankruptcy.  If you know the story, please help me share and build the faith by posting them here.

Related articles

• Taking A Moral Stand, American Airlines CEO Retires With No Severance Package As Company Goes Bankrupt (thinkprogress.org)

Finding hidden treasure in plain sight.

Prospecting, mining both are familiars metaphors describing the activities associated with finding and developing  resource rich opportunities.  Rarely  in plain sight for any passerby  to scoop up and gain advantage, prospecting for Gold, other metals or precious gems like diamonds require active and often deep digging capabilities.

Like precious metals or gems, the secret to good business is creating precious assets of intrinsic value. The attributes to value when known for durability and uniqueness, such as a brand, retain  value over time,  predictably generate  cash flow and  become  difficult for competitors to acquire. But the uncertainty of today’s markets and the disruptive threat of new technologies can quickly erode the value of any asset and so growth is essential.  Whether your strategy calls for acquisition or organic growth, either way, the underlying development and prospecting costs need to be contained.

In stories and legends, merely having a treasure map and knowing where to dig doesn’t always lead to happy endings. Technology has certainly helped to mitigate the risks or advance probabilities of success.  Ground and water penetrating radar and detectors   discriminate ferrous and non-ferrous metals pinpoint the site to begin mining and improves the probabilities of a fruitful yield.  The challenges in any mining activity depend not on the power of the technology or in making the dig profitable. Today’s WSJ headline reads Gold hits $1,700.  Absent reliable, hidden treasure maps knowing where to look is an advantage. Returns depend on offsetting the difficulty and risks associated with its extraction and the quality or grade found. Forbes recently summed this up  USAGX’s Denbow: Gold-Mining Companies Face Challenges Finding New Supply.

Prospecting is a perennial challenge for any and every business, and managing the costs is the key to delivering returns.  The current market turmoil has done more than merely  increase investors uncertainty.  for the Risk averse, who have shied away from innovation  or the adventurous  business who has wisely taken pause, I suggest this is a great time to revisit your strategies.  Standing still can prove surprisingly  advantageous if in the process of cleaning house you discover  undervalued or even overlooked assets.  What value does an earlier project, research or failed product launch buried for any number of reasons offer? Lance and Scott Bettencourt of Strategyn write in Harvard Business Review in June 2011 Innovating on the cheap  a series of suggestions on how you can  leverage your existing assets, or rediscover value in surprising places.

Mining existing assets

I suggest a process that may take you a little further.  Consider Google’s Search business and the  underlying value of its algorithms and index.  Maintaining these assets is of critical importance but so too is the value of constant improvement.  Daily, new content and pages added to the internet require Google’s index continuous update.  Including  rich and diverse content such as images, video and sound  files on the internet challenges Google’s index  and algorithm update to accurately rank and deliver the results.  Realized innovations  continuously contribute  to Google’s financial performance and persistent high  market valuation. Even Google however has failures. Research,  experiences of both internal and external users generate additional  assets hidden in plain sight. Actively sharing and reflecting on the meaning of both successes and failures  allow new project teams ready access to key insights that otherwise would be left to lie fallow collecting dust.  If Google continues to draw value  or benefit from their latent assets, can you?

Identifying data or purpose

Frequently, environmental conditions change a variable’s significance.  Strategyn authors talk about unrealized value in products that may have been premature for the market,  experienced formidable technical difficulties or their launch prevented  by high manufacturing costs . Nothing stays constant anymore.  Consumers are always adapting  their preferences to changing circumstances and environmental conditions, and  business are equally forced to adapt.  A variable’s significance in your business model  in one moment may prove insignificant later. Persistently changing conditions is  why its’ important to frequently revisit your tactical plan and forecast models; and occasionally revisit your business model/strategy.

In 1984, Jesse Jackson was the first Black American to run for President.  I was an assistant statistician working for CBS News assigned  to use the exit poll and early returns to create prediction models to track trends in voters behavior. Race became a significant variable , where as before it had not been much of a determinant factor.  To increase accuracy, the forecast model needed to adjust to accommodate and recognize this historic precedent.  Likewise, when I joined Citibank in 1985, the business needed a P &L model for an innovative new offering in four test markets that linked savings and credit products in a relationship.  No one had looked at  interactive product performance before and the experience was a revelation.  The adaptation to existing analysis and risk management tools were instrumental contributors to the explosive growth of Citibank’s  credit card business. The original business proposition  failed to consider that the risk in a bundled loan or relationship,  product was not merely additive but interactive.  Early, controlled testing allowed them to go back to the drawing board armed with new insights and better understanding of the boundaries.

New data is rarely the culprit in a failure; but as things change,  more data enhances interpretation and  provides insights to re-imagine your business.  When you are the largest issuer of credit cards in the world,  accurate risk models  can be built using available billing histories.  In the 1990′s  mountains of itemized purchase or transaction level was left untouched, though its potential value was clear,  there were no clear benefits to justify the monumental costs of analysis. This was a treasure waiting to be mined.  Lacking urgency or absent a competitive threat also minimized the value of uncovering additional insights into consumer’s behavior.

Fast forward just under 25 years and the costs of time and computing resources to sort high volumes of transaction data is trivial and the returns from real-time processing lucrative. Mined transaction data triggers fraud alerts and delivers additional purchase suggestions based on comparison to  individual consumer history and that associated with cohorts, peers or “friends.”  Amazon  demonstrates   mastery in mining  typical  point of sale enhancements and redeems enormous  value from its dual function processing.

Opportunities and technology capable of mining even richer, more complex data eclipses  the significant value accrued from mining transactions.  The potential  value is driving the collection and complex tagging and sorting  of recorded customer service conversations, video capture of consumers shopping or following their daily routine at work or at home or all the places they go  online, key strokes, eye tracking, written comments.  It appears that there are very few domains of human experience and activity that remain a hold out from data capture.  The number of matching and sorting tools, the algorithms and systems also are getting simpler and more widely accessible.  Today, the speed and volume of results Google returns in a general search is far more advanced than credit card billing records I analyzed.  When was the last time you checked out Google’s  specialized search tools or the technology  coming out of their labs?

Returning Power to the People

The  insurmountable challenges are no longer in finding available data, or even privacy. Its ubiquity and increasing open source availability creates an even bigger challenge,  turning the vast amount of real-time data into a durable advantage.  Sunday’s New York Times (August 7, 2011) reported the unusual establishment in Chicago of a team of specialists tasked to help Chicago harness the technology and gamut of rich data the city collects.  Not alone in its efforts, Chicago is  farther ahead of other governments in creating easy interfaces that contribute to the public’s use of  its treasures of recorded and collected data.  Transparency adds more value by increasing the number of analyst reviewing the information, spotting trends or creating applications that simplify the lives of residents.  For example, the free Bus tracker application to let riders and plan their trip better.  It also holds his office more accountable  and increases the opportunity for activism by city residents.

There’s no doubt that power accrues to those who can imaginatively convert  data into both meaningful and doable innovation.

Finding treasures by leveraging connections

Today’s data mining technologies facilitates more than  accountability and activism.  Beyond knowledge of the type and place of available data,  a dedicated commitment to sift and mine the growing mountains of data requires critical analysis and matching skills.  Google does not stand alone in its specialized capabilities, numerous competitors offer diverse and specialized alternative search tools.  Numerous open source tools  make it easy to sort and manipulate any of the open data made available online.  As in prospecting, the tools and ability may narrow the competition and may advance the process. But those systems capable of exploiting and  enhancing anomalies  with supplementary information increase their chances  to uncover intrinsic value and thus create durable advantage .

Innovation results from capabilities to invent but can equally result from abstraction and adaptation.  Most of us at one time or another have come across a person who managed to re-purpose or refashion an object for an alternative use.   For example, the flower bed below.

eclectic landscape design by Atlanta media and blogs Between Naps on the Porch

Don’t merely consider looking at your existing data in its current form, but revisit it with newer analytic capabilities made possible from the numerous open source and proprietary data mining tools rich in functionality.  Consider supplementing your understanding of your assets from the perspective of your final judge, the consumer.  Also consider these sources:

1. If images are worth a thousand words, spying consumers who refashion or use products for purposes beyond the manufacturer’s original conception can prove inspiring.
2. Conversations and story are at the core of social media’s power.  The words of mouth, or stories  associated with transmitting and  promoting your business also motivate, inspire and compel employees to higher performance and deliver insights into how your product can be improved.  How often are you  using these to find products  in your inventory or services, that you may over overlooked or underestimated, but  are important to a group of consumers?
3. Sales Data–Data mining tools can be used to find surprising blips, if you look beyond the blip.  Focus your analysis on the less understood context such as coincident placements or other variables that may not have made it into your database but none the less explain the anomaly.  They may very well be the source of an unrealized opportunity to refashion and reposition products that have trailed in sales.
4. Last, perhaps you need to apply data mining tools  on your own data collections. The files of failures, tucked into drawers or file cabinets, the product research and or launches that never saw the light of day may call for another look.  After all, consumer preferences are always evolving, but so are your competitors, as well technology that may allow you to overcome previous cost barriers.  For example, oil and gold extraction from very difficult places is now proving economically viable as both these commodities benefit from high market prices.

More reason to harness data mining technologies to jump-start innovation in product marketing, reuse or refashion your assets to generate additional cash flow.

I’d love to hear of your experiences recapturing value in your business by any other routes as well as  suggestions for good tools or tips to improve your data mining or prospecting success.

Employers getting Hip to Corporate Culture?

If you think the unemployment numbers are high, take a look at the compliment employee engagement, which by all accounts seems to be relatively low.

Blessing White , Leadership IQ and Kenexa Research Institute in Minneapolis all report low levels of motivation among US workers.    Approximately 60-70% are disengaged OR under engaged? These were the figures reported in the  GFK US employee benchmark 2011 survey of organizations with more 5,000 employees.  Kinexa  shows a slightly lower rate of 42% vs. the global average of 47% disengaged.  Of course there is variance by sector, age and  role as well as natural variation due to alternative definitions of engagement.

In a worsening economy, triggered by layoffs, naturally employees begin to despair or experience burnout as they raises or either non-existent or minimal in spite of  increases in their workloads.   Furthering the malaise, Hay group survey results, as recently reported in the WSJ, expect lower median pay increases  in 2012 , or about 3%, which is below the 3.5% annual rate of inflation.  The Labor department survey shows voluntary resignations have dropped to 1.4%, lower than in April 2007 pre-recession levels of 2.2%.  Executive pay however, has increased more sharply due to bonuses and other performance-based pay.

As the seeds of greater income disparities continue to grow, and the economy sputters, without a motivated, fully engaged workforce how will executive management deliver  healthier and consistent corporate performance?

More powerful than the prospect of gain is the fear of loss.  As long as employees continue to fear that the grass isn’t greener elsewhere, many of these survey companies predict that voluntary turnover will  remain low.  Then again, it has always been true that compensation is not the only variable that affects employee attitude, motivation or performance.

High performance companies tend to also been a culture of high performing, and presumably engaged employees.  The  June 2011 report by Kenexa found that firms that rank in the top 25 percent in employee engagement achieve earnings per share almost 2.5 times higher than average.  The variation in engagement definitions even among such leaders as Gallup who seek to align the attributes of behavior and company performance, likely correlate with other strategy initiatives or internal operating factors.

Social Capital and Social Media

Michael Porter has has been aggressively advocating  Shared Value, a new business model that emphasizes long-term sustainable strategy. This work encourages firms to pursue a different agenda, focus on the  need to find common goals and shared values as a basis of  meaningful social change. By focusing on a wider coordination and cooperation of resources, to look  beyond the near term profits, firms can deliver  sustainable returns.  The growth of Corporate Social Responsibility initiatives in many organizations, and the emerging role of outside voluntary compliance metrics are providing new opportunities for firms to distinguish themselves in the minds of a variety of stakeholders in spite of accelerating pressure from existing and new competitors.

Investing in Social Capital improvements , or encouraging the development of ties, networks, norms and trust across an organization not only delivers  higher employee engagement , but can be a winning performance strategy too.  Robert Putnam’s pioneering work on civic communities,  emphasized how the creation of norms around generalized reciprocity delivers higher economic and institutional performance.  Particularly true when the ties facilitate coordination and communication which amplify trust in each other.    Ron Alsop, in Workforce Management current editorial mentions the  pay off and importance of cultural and value alignment that has helped transform Cleveland Clinic and re-positioned Starbuck’s.

The Gallup organization is not alone in its creation of a feedback system for employers that identifies and measures elements of worker engagement most associated to key indicators that result in financial performance –things such as sales growth, productivity and customer loyalty.

If Values define culture and Culture drives values, then the shared value that comes from facilitated coordination and communication across your organization will be a powerful positive force.

Any stories you wish to share about the links between culture and performance in your organization? We’d love to hear about your experiences.