If you invest in Value, do your savings grow?


BLS stats thru May 2018

This past week, the U.S. Department of Labor (DOL) issued its May unemployment report of 3.8%, the lowest since April 2000. Yesterday, DOL announced the productivity of nonfarm workers, measured as the output of goods and services for each hour on the job, increased at a 0.4% seasonally adjusted annual rate in the first quarter.

Allegedly, this healthy gain in jobs and the modest gain in wages inspires investors who turn around and buy technology companies. Its why Wall Street Journal writer Michael Wurshoffer, describes technology investments as  “a popular trade that contributed to much of the nine-year stock rally’s gains.”

Like any pendulum that swings too far in one direction, eventually, it will reach its limit and then swing back.  That’s what typically worries economists and should make others wary too. if you care to think aloud with me, keep reading.

Faster, better, cheaper—increased availability and access to automation achieve all three. These attributes are also shorthand for the means that different business products and services.  The challenge is whether automation and digital technology both hybrid proxies also deliver positive business outcomes.

Personally, I’m not so sure and I’m not alone in my doubts.

There are a few wrinkles in this logical string of associations.

Productivity gains are key to companies’ profit margins, and also the key to wider economic growth which is why DOL tracks and reports the statistic. Without margin, business cash flow suffers and investments necessary to build and sustain a business shrink.

This is where hard costs, context, constraints separate the ability of different businesses not just the means of product/service delivery, sales effectiveness but also end-user satisfaction.

Generally, hard or concrete financial measures reflect the relative success of a business.  It’s why many businesses evaluate potential opportunity in terms of the potential for return.  Will spending on that make us richer?  The faster, better, cheaper paradigm is more familiar and the benefits easier to understand than hybrid automation. Technology too often takes special abilities that exceed the internal know-how or resource capabilities.

Opportunity is often in the eye of the beholder, it’s somewhat serendipitous, right?  A discovery at the right time, at the right place by capable parties who take and then make an opportunity real and tangible, is rare in the business world, but not in life.

In life, what do you do when you find an object of value lying on the street?  Ok, maybe you wonder why it is there; but I’m guessing you feel lucky to find it.  In this case, someone else’s loss establishes your opportunity.

In my consulting practice, I am fully conscious and frequently point out to entrepreneurs their strength and unique value proposition derives from their distinct vision. Everyone sees and interprets the world a little differently which is why it’s difficult for others to steal and realize a concept as you envision it.

In business, there’s only a handful of leaders respected for their visions: Steve Jobs and Warren Buffet.

Steve Jobs stands out for his ability to both spot and transform opportunity into tangible value for himself and all of us too.  After he spotted the Xerox Parc Graphical User Interface, he managed to shape the ability of others to share his vision, and ultimately create his interpretation.

Note, for him better translated into visual and thus simpler. His legacy company produces products that sustain a loyal fan base willing to pay a premium…so no, not cheaper. Speed? The design and internal integration of functions in all Apple designs make them both easier for users to get what they want, wherever they are and often as they want it.  His holistic approach triggered a revolution that we associate with mobility.  That combination lifts Apple stock valuations too.

What about Warren Buffet?

Between DOL announcements this week, Wall Street Journal’s Michael Wursthorn reported on value investors–of which Warren Buffet may be the most famous. Wursthorn reported some strategy shifts among value investors as their portfolio performance trails that of growth investors.Comparing Russell 1000 indices - May 11, 2011 Thru June 1 2018

Strategically,  I too was intrigued by his observation. Not for the reasons other WSJ readers’ comments pointed out –that value investors buy and hold, which meant several value stocks of yesterday are the growth stocks of today.  Apple is one of them.

The definitional debate aside, I focused on the comparative analyses Wursthorn shared and deeper questions than those probed in the article.  It seems that the nine-year rally in US stocks excludes Value stocks –a distinction traditionally linked to shares of consumer-staples companies, basic materials firms, and big manufacturers, among others.

Again, this week’s market rally, as Wursthorn mentions seems to favor “asset-light technology” companies.

I wondered, why doesn’t the automation we associate with advancing tools and systems for data processing match the impact of automation we associate with the aforementioned value companies?  

My ongoing research on advancing technology and automation made me aware that unlike start-ups, established firms are much slower to invest in advancing digital connectivity especially internally across functions.  Is that dragging down their growth relative to other firms more nimbly enabled?

The value sectors historically associated with leveraging hard assets benefit from financial levers that data-rich firms and their soft assets can’t utilize, e.g. securitization. So why are technology firms experiencing dramatic growth and advancing capabilities managing those soft assets by creating more convenient access and delivery of information to their users.

Notice I didn’t mention productivity, and I don’t know how worker productivity between the two types of firms compare.

I do know that digital transformations are closing lots of process gaps. They accelerate both the review and interpretation of data and advance the flow of information to reach the right party in real time.

There’s an art to understanding “use” timetables for different information requests. Just as there’s an art to differentiating wanted from needed information, and the degree price, trust, and safety factor into a buyer’s value equation.

Does the artistry translate into an intrinsic value that an investor would be able to recognize and leverage?

I read with great interest a piece by Chad Syverson, an economist at University of Chicago’s Booth School of business entitled  Why hasn’t technology sped productivity? His analysis challenges the traditional constructs and associations that drive value and growth. He writes:

“Making better things using the same amount of resources, or making the same things using fewer resources, is, in the end, where economic growth comes from. If this phenomenon is taking place, you should see it in the data reflected as productivity growth. The problem is, if you go look for it in the United States, you don’t find it.” 

His analysis also points out how productivity growth has been elusive for considerably longer than the observation window Wursthorn shared in the Wall Street Journal this past week.  Instead, Syverson notes the role played by the diffusion of technology I mentioned earlier. Geoffrey Moore’s Crossing the Chasm differentiates the phases of adoption and their effects on invested capital returns too.

smithhouse-design-digital-marketing-consulting-phoenix-crossing-the-chasm

Now, you can appreciate how Warren Buffet, the quintessential value investor didn’t see any signs of value he would recognize.  His cash pile estimated to be about $110 billion gives him greater flexibility to put the money to work but only if he and his partner spot it. For example, fundamental investor theory doesn’t value Amazon’s capabilities to disrupt the wider retail market. So this company escaped his notice, to which he explained: “I was too dumb to realize what was going to happen,” he said.

It’s actually understandable for a traditional investor using accounting principles to evaluate an opportunity to overlook the newer forms in which value is created. Until recently, few companies data assets were capable of driving outsized growth. And don’t forget, data holdings remain footnotes not assets on balance sheets.

As a researcher and advisor, my job is to find opportunity but also justify its investment value. It’s why I encourage you to notice the methods and sources of data that academics and journalists evaluate, and what is possible for you to collect, acquire and combine.  These methods of analysis,  interconnected automation processes, and sources of data also differentiate digital economy leaders from laggards.

Businessman having a coffee break

Take a moment to picture decision-makers assembled in a board room.  The data generated, repackaged as information and presented likely resembles the charts printed in the WSJ and the Chicago Booth Magazine.  It also varies dramatically from what a retail sales associate needs to process, or an executive landing at the airport in a city they’ve never been where the language and customs are completely foreign.

Oddly, the unity of experience and shared behaviors of each of these individuals when they touch and access the most ubiquitous automation assistant prejudices each of their expectations.  Apple’s recent announcement of the FALL iOS release focuses on enhancing the personal experience and further adoption of productivity applications that compress steps and further simplify adoption and use.  Are these same journeys part of the strategic vision or neglected by CEOs.

The separation of technology to support functional activities in an organization competes with the personal behaviors enabled by mobile technologies.  As Syverson points out the diffusion of new technology within an enterprise slows productivity and its benefits come in multiple waves.

He hopes to see another retrenchment. I’m hopeful too, that organizational productivity will follow the behaviors and experiences using consumer technologies begin to spread across multiple functions at work.  Remember the difference between the specific and deep domain knowledge of these technologies doesn’t come close to the rapidity humans adapt and more importantly learn.

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Thinking aloud or stealing the show?


all-the-eye-rolls-to-the-princeton-mom-who-says-single-women-over-30-are-desperate-man-repellers1

I blew it. I broke my first rule and failed to control my ego.

Not sure what the lovely woman I met at my 35th graduate school class reunion felt, but I’m certain she hadn’t expected the slight and unfiltered commentary that poured out of my mouth.

In my haste to catch up with my classmates, I spotted one across the room standing in a small circle.  Had I interrupted an earlier conversation? I’m guessing that’s why this stranger to me raised the topic, that brought out my less admirable qualities.

This very poised and polished woman expressed her enthusiasm for a storytelling webinar she had heard.  Coincidentally, I too had participated in the same webinar.

The mistake was my response to her comments in which I undid any credibility I hoped or once had.  I blundered in,  may have even tossed my head and rolled my eyes expressing annoyance.  of course, I can’t really explain what happened or why.  For example, I’m guessing that I behaved and acted badly to someone’s eagerness to “learn” how to tell stories–the most natural of human behaviors.

Now in the quiet of my home, the emotions calm, the memory distant, the source of my annoyance is clearer to me.

I’ll admit, I’m lazy when it comes to learning. It’s considerably less work, requires less effort when I ask someone else to tell me the key ideas that will make me successful.

It’s probably why I had bothered to sign up for the storytelling webinar IDEO offered.  And it’s probably why I was so bothered that IDEO had attracted an even wider audience of participants.

When we ask someone else to give us the gist or spare us from sifting, sorting and working out what’s important, we take the magic beans approach to learning. i-072

The magic beans reference is to a fairy tale in which Jack, the main character, is framed as a fool.  Why would I mention a fool’s tale?

Don’t worry if you don’t recall the fairy tale, because the story is only a device to help you remember the message.  I assume, like me, you too take pride in what you know.

Take a moment. Think about the effort, time and attempts you spend acquiring knowledge that pleases you and makes you proud.

By chance, if you’ve got a recorder nearby play along for a moment. Or open the audio or video application on your phone and hit record.

“Repeat after me.”

“Do what I do.”

Let me be clear, I’ve given you an instruction and now your ability plus your will needs to work out a response.  That last bit, the work out? It mixes conscious and unconscious processes.  It coordinates the central nervous system receptors and transmitters that pass on the fight/flight triggers that route, interpret, select and cue whatever you do.

Your decision, answer or activity turns out to be a reactive bundle that rapidly assembled in response to my instructions.

STOP RECORDING

Watch/and or listen to your recording.

Were the phrases the same? what differences, if any did you notice?

I presume that you too are calm reading what I’ve written.  Do you know the reason I asked you to record this little activity and ask you to compare them?  I’m guessing you are also still wondering how any of this relates to magic beans, bonus points if you are beginning to connect all these little messages together.

Congratulations if you are aware of the following:

  1.  The power to learn and adapt is innate in all of us.
  2. Reflection and replay increase our understanding as it invites us to turn our focusing lens on ourselves and notice what we do as well as what we don’t do.
  3. Deeper learning occurs when we expend time and dedicate effort to learning any task or understanding someone or something.
  4. Thinking releases other chemicals and changes how we feel.  Circumstances dictate whether we feel drowsy or anxious and the extent of triggered connections.

Back to the real world

with respect to my own failure, and the story I mentioned at the onset of this post, I now get to the purpose and intention behind this posting.

Personally, I spend more time thinking and less time doing. To think through a problem or even identify its root cause requires different skills than applying the fresh thinking or even deeper understanding.  True, situations and circumstances vary. Social factors, in particular, affect our behavior often ahead of our awareness.

In my social scenario, I reacted emotionally with little or no thought, intention or consideration for others in my presence.  When this happens, I’m less clear and much less effective as I’m reacting to a narrow set of cues.  Of course, this is a considerable improvement over my previous habit of interrupting people before they finished telling me anything.

When does my intention to know differ from my hunger for magic beans? Our behaviors give us away.  What blew my ego’s cover, was my belief that I knew more than what was being said and I was impatient enough to prove it.

What I didn’t do was practice active listening, use my knowledge to ask questions and honor what others may or may not know.  Magic beans are always worth less than you pay for them unless you exercise a little critical thinking.

Earlier I gave you some simple instructions and then used more than the three instructional words to explain what I was doing.  What informed my purpose, my intention and lent credibility to make you consent and participate?

The only way to test what you know is to repeat it, think and then write it out.  It’s why the teacher in me knows that I’ll be better after I’ve had the chance to think things through.  When I just start talking I’m thinking outloud.  In some situations that’s appropriate, as in when you want to collaborate. But if people cut you off, then chances are your learning or recitation isn’t worth much.

The best way to apply what I know is to practice and test it, not by giving a lecture but by applying the learning in a demonstration of its meaning.

What about you, do you have any suggestions or ideas for how I can get out of my own way, be open to more possibilities?

When measuring effort, are you supporting competency and excellence?


focus_knob

How am I doing? That nagging question arises only in very limited situations where our performance means something personally.

Randall Munroe’s XKCD humor aside, when it comes to focus point of view matters.

People don’t always consciously choose, or control the quantity of effort and attention they willingly apply to a task. The results consequently vary in quality, elapsed clock-time and obviously cost.  If you’ve ever lost time and perspective and found yourself completely absorbed and intently focused on a task, use that as one reference point.

Did you work at it? Does measuring your performance on the task matter, or just the results and the experience?

Task managers may activate someone to work but few engage the individual’s energy and commitment to quality acheieved by successful game makers and psychologists who study motivation. Dan Pink in his book Drive, explains why differentiating the task is as important as differentiating the incentives. He goes on to explain that hgh performance connects to something other than rewards which proves difficult for organizations who need to harness individual’s efforts in service of its goals.

Thankfully it’s 2018, and the opportunities for businesses who spend the time and effort to reorganize and separate the meaningless from the meaningful tasks gain considerable advantage.

These organizations harness technology  to speed and standardize processes while being mindful of people’s desire to do well. In Manufacturing, Toyota Production Systems and Lean Methods  proven adaptability led many industries to embrace this management philosophy, and miss its strategic imperatives that require three to five years in order to produce the lifestyle change that deliver results.

It’s not enough to merely measure performance and seek improvement, both must also  represent tangible, meaningful values.

Feeding the desire of individuals to do well unfortunately competes with a firm’s desire to be efficient and effective.  It’s easy to confuse the meaning behind psychologist, and pioneer in organizational development Kurt Lewin’s suggestion.

“If you want people to do something, make it easy for them to achieve their goals….”

Management workflow designs that narrow the set of tasks, or reduce the steps do minimize errors and promote consistency.  Add in  “idiot proof” design of automation and interconnected technologies  will make tasks more convenient and tools easy to use–the digital tools include just in time support pop-ups.  The efficiency gains acheived by eliminating choices and inadvertently spare people’s attention to the task and thus rob people of finding meaning in their effort.

Meaningful Work

Pals sudden servicePal’s a fast food company founded in 1956 in northeastern Tennessee does this too but with the employee’s point of view and objectives in mind.  Unlike their quick service peers, Pal’s generates $1,800 in sales-per-square foot annually, versus McDonald’s which typically generates less than $650 of annual sales per square foot. These are the figures and full story that William Taylor tells in  Simply Brilliant (2016).

Taylor describes the Pal’s management choices through the lens of experience.  I sense that  Pal’s leadership team interpretation of Lewin’s message as harnessing the contagion power of experience. Walt Disney translated the message at another level that focused on the reason we repeat any experience.

Experiences range in quality and quantity, which is what makes Pal’s remarkable and its success a positive outlier.  Pal’s intrigues Taylor not because of its impressive bottom line results, but for “the level of intelligence and intensity with which it approaches everything it does—how it hires, how it trains, how it shares its ideas with other companies eager to learn from its success.”

There’s nothing unusual in that description. Special hiring, training processes, or sharing their approach with other companies sounds just like the other successful high experience focused firms– McDonald’s, Zappos, Disney.

The Pal’s difference is their high bar, the “Triple 100—100 percent execution 100 percent of the time, even when restaurants are operating at 100 percent of capacity.” The point of view built into their mindsight focuses on making employees successful, by holding the leaders and managers who trained them accountable. Pal’s teaches and coaches every day because growth isn’t just about market it’s about people and leadership development.

They hire and guarantee the success of people who want to learn, and employees stick around.  They don’t stick around for the high wages or a pension. They stick around for the shared learning, opportunities for personal growth and the pride in being consistently excellent.

Organizations, after all are made up of people. For the near future their success will depend on their ability tap the human need to do well,  and offer individuals personal room to grow, continuous support to learn and power to create.  Competency depends on circumstance as much as attitude.  Ask any high performer and you’ll dscover they still practice and find ways to improve.  So why don’t more organizations invest for that level of success?

Curious Times and Curious corporate bedfellows


Dear Jeff, Jamie and Warren

We haven’t met, but each of you express a candor that suggests you are open to informal input.

Image result for Dimon bezos buffett

Naturally, I was not alone in my surprise over  your companies- JPMorgan Chase, Berkshire Hathaway and Amazon announced plan to enter the healthcare marketplace.  The cover story I saw, explained your unified commitment to contain, if not reduce employee healthcare costs, without mentioning  any specifics.

My first thought was perhaps this was a prelude to a presidential bid.  The announcement’s bold leadership play has garnered great public enthusiasm.  My second thought recognized  the power vacuum that followed the failure of the national government to make change. Your united commitment, and unspoken appeal for other CEOs to join you could create further momentum for market driven change.

These thoughts still didn’t feel quite right. I remain optimistic and root loudly for other change agents to shift the tide.  As we all know, the challenge to deliver healthy outcomes and affordable healthcare for all are not one dimensional. The complicated systems presently in place fail to address the larger complex inter-relationships between community and individual health.

Have you read David Freedman’s recent assessment of US healthcare system conundrum?  It’s not that long, and should be a required read for every team  contemplating entering this space. He writes

“It’s easy to think of “health” as just another category of social-service spending. But a great deal of modern research suggests that it might be more accurate to think of it as the payoff of all the other services put together.

Are you Seizing advantage or opportunity?

I do hope this announcement, in spite of subsequent commentary suggesting otherwise, that your three musketeer esprit de corp adds up to more than a pure group purchase power play. Elizabeth Rosenthal commentary in the NYTimes explains

“Together, these three behemoth corporations will be able to wrest great deals and discounts in their negotiations from hospital systems, drug manufacturers, medical device makers and doctors’ groups.”

OK, it’s why I’m asking you to widen your goal. Don’t  settle for negotiating a better deal than what  present healthcare arrangements are able to wrangle.

To Jeff, I wondered why you sought out Jamie and Warren to play in an arena internally Amazon team’s have been working, and compromise your reputation and general industry slaying capacity? Amazon’s platform successfully  delivers efficiency and value to end users. Are you suddenly squeamish about squeezing healthcare providers and yes, your employees too?  Scott Galloway, the NYU Stern faculty describes in The Four  your outsized vision has long exceeded the pure e-commerce play that is Amazon today.  Galloway further empathizes your tireless advocacy for technology  touched by realism about automation’s impact and downstream effect on wages.

These last points makes Jamie a strange bedfellow, as the banking business depends on individuals’ with incomes.  But that’s a different letter and article.  Jamie, under your leadership JP Morgan Chase offers expertise in compliance, as well as payments and savings that can create some cost saving synergies in Healthcare.  More importantly, both industries service and needs are intensely local and subject to state regulations.  The consolidations in both banking and healthcare had to rethink bricks and mortar location and staffing. Increasingly, financial services delivery via un-staffed, self-standing kiosks/ATMs and/or rely on mobile enabled applications. Banks, relative to healthcare, historically leveraged technology savvy to fuel growth balance risk and reward effectively and efficiently.  Jamie your investments and innovation, though slow starting, and less evenly distributed across the investment, consumer and commercial bank–they do suggest you can leverage the to deliver greater opportunities and create value in  Healthcare.

Warren,  I’m also hoping these are a few of the elements of value you spotted too.  Again, several closer observers of your group planning reiterate that limiting your collective primary intention to lowering employee healthcare costs, reduces the life value of the proposal. That shortsighted objective is certainly not likely to deliver the return on investment necessary to make a dent.  I’m counting on you Warren, and your experiences creating larger and profitable opportunities from reorganization.

The flaws in a hasty solution

I’m equally certain you all noticed the dramatic rise of Net Income among healthcare insurers.  If you haven’t finished a deeper analysis, start with this one by the Leavitt group that reveals a more complex picture.  “[I]nsurers made money in the Medicare, Medicaid and group health insurance markets and lost money in the individual market, which is why some of them exited the individual market in many states.” 

As early as 2006, Michael Porter summarizes the strategic dynamics and cost challenges associated with creating quality healthcare outcomes in   Redefining Health Care: Creating Value-Based Competition on Results.  The environment he  describes of dysfunctional competition leads  players to “strive not to create value, but to capture more revenue, shift costs, and restrict services.” Porter felt that healthcare lacked discipline and a management and business focus.

Jeff, Jamie and Warren is that your take too?

I don’t know if it was conversations at Davos and chats with deeply knowledgeable wranglers of this problem that inspired you to act.

I’m inspired by data. As the Affordable Care Act continues to make available additional data, it’s possible to learn more about what works.

Since 2006, researchers in both social and medical science enable more models of service and extends understanding of human health at the individual and population level. Much of healthcare activities used population data to allocate resources. Efforts to reduce costs associated with an individual can now take into consideration individuals’ behaviors.  Continued use of aggregate process and success measures mask the affects of too many associated care conditions and reactive activities.

There’s a complex relationship among these issues, and how they are translated into interventions and dosage appear to prevent rather than deliver consistent beneficial outcomes. Hilary Hatch the CEO of Vital sign offered this explanation:

“Population health puts people into categories by conditions (diabetes, hypertension, depression), age, lab results and medical billing data. These categories presume their own importance. When in fact, psychosocial, behavioral and environmental factors determine individual health far more.  Patient goals, preferences and barriers to care tell us what stands between that patient and better health. Without this data, population health efforts are undermined.

The explosion of personal health monitoring devices correspond with more data that contribute to advancing understanding of the workings of the human body.  Another entrepreneur, Mario Schlosser recognized that “no entity in healthcare  has enough data visibility to help you[individuals] navigate the system.”

Is this your collective aspiration too?

Why not just partner with Success?

A few weeks ago, I attended a presentation at Chicago Booth’s Rustandy Center by the Chief Medical officer for Oak Street Health, Griffin Myers  This new medical group does not serve everyone, but the patient population they do serve have consistently better outcomes.  The business model that Oak Street Health adopted throws out the traditional fee for service model insurers favor. Instead they get paid when they deliver services that work, the successful outcomes embodied by Accountable Care Organizations as specified in the Affordable Care Act.   Oak Street established a value-based care delivery model exclusively serving  Medicare (and Medicaid dual-eligible) patients in low income areas. They presently operate 24 clinics across Illinois, Indiana, and Michigan.

This intereview with Griffin Myers on Tasty Trade gives a great overview

Another alternative model of care that should inspire the three of you is Oscar Health, whose estimated valuation of $2.7billion, and claims to be the first technology-based insurance company. Mario Schlosser, an immigrant from Germany realized before the birth of his first child an opportunity to put his own special skills as a data scientist to work.  His first hand experience navigating the complexity of  the healthcare system led him create Oscar Health in 2012. The company “uses data and product design to guide you through your health care and get you healthy.” As of Oct 2017, he has raised over $720 million and  delivers over 100,000 patients  concierge style team care in New York, New Jersey, San Francisco, Cleveland, Nashville, Austin, San Antonio, LA and Orange County.  Note, many of these cities feature innovative health care service providers but  boast a volume of technology talent too.

This interview with Mario on Techcrunch Disrupt in 2017 is a good overview.

 

Both these approaches recognize that healthcare requires high touch, and a constellation of services to produce the desired outcome.  Both of these innovative for profit companies are heavily invested in use of  data and  technology.

So Jeff, Jamie and Warren under your leadership, will you be equally committed to  facilitating connections between traditional care givers, services and systems or just cut out the human to human touch?

Whatever you do, it will be interesting and I’d be happy to help.

Focus on the clarity


Whenever I push or pull too hard, move too fast, or pour out too much of something, I recall my mother cautioning “that’s enough.”  Her words remind me “a little goes a long way.”

The reminder, you can imagine, wasn’t always welcome though it was often needed and useful. It’s easy to find ourselves overdoing something, and that includes overthinking too.

Few people relish the experience of others questioning their judgment, or their competency challenged.

Oddly, very successful people do.   Bby soliciting helpful input frequently, they gain new perspectives and often advantage. Their success reflects efficiency and effectiveness made possible from others’ perceptions, understanding and experience in precision and quality .

Ever find yourself picking up the wrong impression,mis-understanding directions, or losing valuable time and energy believing you discovered a shortcut others missed for good reasons?  Worse, ever find yourself having to redo something because the task was poorly defined, or inappropriate for the situation?

Getting clarity

It’s simple to turn a reactive approach into a proactive plan.

Taking a moment to repeat what you heard, request and then follow up with a statement of the steps you intend to take  often spares everyone  disappointment.  Replace the knee jerk why questions in your head with clear, positively  stated responses both convey what you understand and assure the requester satisfaction of their needs.

It’s simple, and yet the extra moments to pause, don’t trigger an active assumption check. In thinking  through what’s next we too often skip over the evidence or clarify our own understanding.  

“Did I get that right?” 

Successful people ask questions with confidence because they value their time, and also believe others do too! 

Why remember Columbus?


300px-atlantic_ocean_toscanelli_1474

Paolo dal Pozzo Toscanelli, Florentine astronomer 1474 projection of the Atlantic Ocean geography (shown superimposed on a modern map), which directly influenced Columbus’s plans.

I’m happy it’s Columbus Day, not because I’m a believer in the myths surrounding Columbus, rather because the results he achieved remain impressive on a global scale.  If you take the perspective of 1st mover, as in 1st to arrive you miss the point. Likewise, unlike discoverers who know what they have discovered, Columbus up until his death argued with navigators over the identity of the lands he found.

Columbus is a story of failure due to incomplete as well as misinterpreted information, dissipated urgency that only political prudence and luck turned around.

Columbus’ “successful”  1492 voyage, opened the door to Europe’s active exploration to the west, but not for the reasons Columbus claimed. He failed in his prime objective- securing a shortcut to the Far East.

Luckily, the Americas were rich in other resources, which other explorers with political allegiances to countries other than Spain soon claimed.  In 1497, flying England’  flag,  Newfoundland was “discovered”.  This paved the way for England’s extensive colonization of North America, while Spain continued explorations and claims to  Central and South America.

Yes, history is rewritten by the victors and the district of Columbia bears the mark of anti English sentiment and ,   part of his myth……..

Learning from Failure

Everyone experiences failure in one way or another. Recently, I read a wonderful blog post why projects fail by Tom Toohey and Mike Kellim of Envision-Business Consulting. They go beyond the  general takes by the business community, to describe why it’s difficult to face up to project failure. The post lays out the general variations, quotes a Harvard Business Review study, Gallup data and then does something wonderful. It makes clear why projects are difficult. This isn’t a simple lesson in dealing with uncertainty, the authors leverage the reality of elapsing time and situations between when initiating project decisions are made and completing the work necessary to move the project forward.

In the days of Columbus, geographic distances were impossible to traverse quickly and safely, whether it was news or goods. Everyone suffered the same constraints and information varied in quality and authority. To be a mariner or a trader uncertainty was perhaps attributed to natural law—if you remember your history, these events predate Copernicus and Kepler,  and centuries before Darwin upsets the notion of natural order.

According to historian Edmund Morgan, in Wikipedia

Columbus was not a scholarly man. Yet he studied astronomy, geography, and history books, made hundreds of marginal notations in them and came out with ideas about the world that were characteristically simple and strong and sometimes wrong, …[23]

 

Columbus and his self guided studies left his knowledge unchecked and the urgency to find an alternative safe, and speedy sea passage to the Far East fueled his overconfidence. Project management works the same way with many estimations left unchecked, and unchallenged in spite of considerably greater access to information and in a more timely manner.

So what does Toohey and Kellim say and recommend organizations do to avert inevitable failures?  They don’t just advocate for better Leadership, or better Project Management methodology or reduce excuses to my personal favorite, the unforeseen circumstances. Their experiences recognize these are merely substitutes for poor communications. They suggest a closer inspection will turn up another common cause—one or more gaps between what people know and their skills/experiences doing that same thing.  Just like Columbus, competency appears to be grossly underrepresented, while confidence remains  greatly overstated.

Depending on whether organizations make use of post or pre-mortem analysis of the project, several support mechanisms will increase the chance of project’s success. Face it, circumstances and situations don’t always remain in sync with what you know, or your experience making uncertainty about the future ever present and luck will always be a factor in meeting future expectations.  The question is what else are you relying upon to make your investment generate value?

If you want to learn more about Columbus, Wikipedia is pretty good. I also recommend that you retell his story to your team and find parallels to test your own assumptions, of course, I’m happy to facilitate.  Either way let me know what you learned, or better yet changed to improve your odds of success.

Are we there yet?


This morning the fresh thoughts in my head needed to get out. Rather than pick up my phone where plant where automated notifications lay in wait, I found myself the reliable pen and empty pad.

Why reliable? Because my hand scribbles could keep up with my thoughts, and nothing interrupted the  flow of idea from head to its external representation. 

Don’t get me wrong, I like and I use technology and find it are in credibly effective. I also am aware that both its utility and benefits remain on evenly distributed. It’s because the intention of makers have yet to work out the options that please permit users and receivers to choose and prioritize their needs. 

For example when I want to write, I have a choice of software. Each application has it’s merits and there are some standard features among them. Each application however remains subordinate to an operating system of the device. Each application has to specify rules of its use. Yes these include the terms of service but they also include a default that integrates with other software and plays well on different hardware. These defaults preserve the integrity of the users work, make it safe from unauthorized editors or readers, and store the bits as they appear. Some of these settings can be dictated and controlled by the user and some not. 

Makers of software have learned to pay attention to how their creation gets used. In addition to the functionality they make digitally possible, great care is given to optimize the users experience. The less steps between a users intentional use and actual engagement, the better. The hardware and its operating system improves its value to end users with every new feature and application. 

Software vendors who play well with multiple applications may improve user experience and vice versa. my problem is the operating system that allows other applications to distilupt my experience. This is especially painful when I’m focusing and the last thing I need is an interruption. For example in writing this post, not only did I get a notification about a news event, but a text from a friend and a bill payment interrupted me and so did my calendar. 

When I write on paper that doesn’t happen. The ambient environment can influence and distract if I let it however it doesn’t pop up in the center of my attention. 

We’re still making lots of trade-offs when it comes to working smarter. When I use technology, wider distribution becomes effortless, but it cost me attention and focus. 

Not every request for my attention deserves immediacy. And simple on or off options don’t help. I definitely don’t open my settings to turn off notifications before starting a focused task and when I don’t it’s as if I’m working in Grand central station where any and every interruption as possible. 

So no I’m not fully using technology as well as I could. I’m still using old-fashioned tools non-digital devices when I need to focus. what solutions have you found work to keep you focused when you need?

Changes we notice and changes we choose 


I suspect you are a mobile addict. You don’t have to be obsessed and have the device in arms reach at every moment to qualify. You merely have to rely on its always connected capabilities to keep you “plugged” in to your connections, and by default the world. 

The speed at which mobile technologies have been adopted has been unprecedented, and I am less interested in its occurrence, and more interested in unraveling its meaning and understanding what changes will unfold next. This post invites you to consciously evaluate the range of activities that tether you to this device, and the choices you can make next.

An overwhelming number of people check their device for “messages” within their first waking moments. In the not-too-distant past, messages waited to be picked up in the variety of places where they were left.

A missed caller could leave messages on answering systems, that replaced secretaries who made and pass a note. This task was automated by machines who accurately recorded the caller, and refrained from edits or shorthands. The machines soon became embedded into answering systems with retrieval now possible remotely.  You could call in to learn who had called.

Email, a desktop computer application, was faster than the post office, and quickly displaced the fax machines for sharing documents or lengthier detailed messages.  Cheaper computing, networks expanded Email from an office communications system to personal. Not only was it faster than regular mail, it was significantly cheaper than calling and more convenient. 

Now, all messaging systems are neatly available in your single mobile device, and your messaging interests and practices routine, if not obsessive.

How does this capability to be more on top of your communications make you feel?

Does this combination of access make you feel more effective, responsible, efficient  or something else? Are the experiences and emotions associated with interaction or the anticipation of the interaction? when and why does the experience become distracting or chaotic? 

Workflow

I’m asking this questions, because I have a hypothesis that needs testing. I believe it’s the small stuff we change that leads us astray from our original purpose or focused intent.

Distractions come in many forms and largely occur when our attention wanders. Driving for example, our focus should be on the road, the vehicles and conditions. Instead , we’re typically multitasking while driving, Whether the division of our attention happens by listening to the radio, engaging in conversation with a passenger, or on the phone ,  or just the flow of other thoughts.

Diversion is candy to the brain. It’s how small stuff easily adds up. The sideways glance that misses what’s ahead robs our attention,  scatters our focus, can delay our progress and mar our effectiveness.

Any efficiency we built in to our process are quickly filled by the abundance of new opportunities, the change in process enables.

Here’s the rub, it’s at the moment of learned efficiency that we choose either to keep learning or we move on to a new domain.  In both cases, we have reached a level of effectiveness and masters keep moving up while the rest of us begin a steady ascent of decline.  This has been documented as the learning curve aka the efficiency curve, and it’s that pivot moment that interest me.

My hypothesis is that it’s in those moments of awareness of the pivot point that innovation begins.

Process changes: Innovation, Invention or Improvisation

I invite you to consider the value of anticipation, or the expected emotions that flow in a particular situation. For example, we want a celebration event to end on a happy note.  Likewise we want our decisions to also produce positive outcomes, but that’s the problem, not all of our behaviors result from conscious decisions.  When driven by habit, the small stuff that changes escapes our notice. That’s both good and bad.

For example,  no matter where you live on the planet, the time of sunrise and sunset changes daily and we generally don’t notice or feel those effects. We do experience the differences relatively over long periods of time, such as the longer days of one season vs. shorter days in another.

The same is true over the little changes we make every day in the use of our mobile device. Perhaps you have grown aware that you are using it differently than you did a year ago, but you don’t know exactly why or what you are doing differently.  Of course some of the changes have been controlled by the businesses who are using agile methodologies to constantly release improvements in the look, speed and functions available on the screen.  The more these businesses issue changes, so does your behavior.

So, have you taken the time to reflect and assess your own set of personal habits and processes?  Have you considered the cumulative effect on your employees of these external changes and its effect on their productivity, their effectiveness and your overall efficiency?

I did, and reflect on my processes pretty regularly. It’s the bane of being a consultant, I need to understand and tinker with things in order to keep up to date and provide relevant information to solve client’s business problems.

I always asked lots of questions, the biggest difference in my process happens to be the research process.  In the past, I was a very avid reader of the New York Times and dutifully ventured to my front door half asleep to pick up the paper and begin scanning the headlines.  Later I went to the Wall Street Journal and slowly opted to skip the chore of recycling the old newsprint, and read the headlines on my phone through the convenience of their respective apps, or use my desktop.  The thing is, the biggest change? Neither one of these newspapers remains my #one information source or morning view.  In fact, I stopped reading the New York Times entirely for a while, because as email habits led me to click open the inbox, other publications had more interesting headlines and their content became a more interesting set of sources.

Better still, the minute I opt to share an article with a colleague, I’m no longer in email but a new application that the team chose to use less to keep our inbox clear, but to insure we were finding and able to keep and organize the messages.  Naturally some of our remote global team members would notice I was online and would shout out to me via Google Chat.  Those who were using the proprietary platform we built, would post and the site would automatically trigger an email notification to encourage other members to respond.

I discovered that my own process, work habits and overall effectiveness ebbs and flows with the connected capabilities of the underlying platforms I find myself using.  I’m not suggesting that having one is a good idea, but I also know that it’s valuable to impose some discipline and standards for the teams in which I work.  It’s way too easy to be online, for example this post began as a voice transcription using my phone.  The longer it got, the sooner I had to move to a bigger screen and so I jumped to my desktop to continue.  Inevitably, there was a sync delay. Later, I  had to reconcile the two versions on the two separate devices.

I would welcome thoughts on if and when you personally, or your team revisits your work processes and to what extent efficiency or effectiveness plays a role.  Please share, and if you would be willing to be part of larger research drop me a line.

 

Retail impacted by digital finally changing business models


Supply chain software, and a minority stake at that, wrote Loretta Chao to WSJ readers made it clear that Nordstrom definitely is intent on preserving their advantages.  As a retailer, they definitely get what digital business means–they are actively engaged in shifting distribution and inventory control, not merely adding data points to track, but redirecting their fulfillment.

Yesterday, the Wall Street Journal also reported shifting focus by big mall developers, who have leveled the mall spots once anchored by top retailers to make room for a new wave of experience magnet attractions. Fewer and fewer people respond to traditional retailer marketing and sales cycles.  Ron Johnson’s early insight that shoppers were ready for greater transparency was ineffectively translated and instead of turning JCPenny’s into a winner, he managed to accelerate its decline.

In a 2013 blog post following a peer discussion of this strategic failure, I wrote:

“The days in which stores stood between buyers and consumer good manufacturers are dwindling. Location or proximity to the consumer may still have an edge but your competition’s ability  to insert themselves into the face to face transaction has dramatically altered the sales dynamic. Mobile communication devices  make it easy for sellers to find buyers anywhere anytime; and yet, the playbook  for many stores , from department stores to specialty retailers,  fail to keep pace with the change in buyer behavior, perception and thus fail to live up to  increased expectations.”

(Click the link for the full post:  For JC Penney and Ron Johnson experience counts, but which one will deliver growth? )

The realization of end-to-end digital retailing has been slow to arrive. True to form, it has not materialized evenly. The latency, or the time interval that separates store buyers’ pre-order of seasonal merchandise, and its staged manufacture, delivery to warehouses and distribution centers before making it to the store created more than one headache for retailer. In a stable environment, where information was as limited as resources , retailers may have been better at holding customer’s captive and thus been more effective in their ability to  forecast, price, track and sell in keeping with customer demand.  The once innovation of a sale to prime the pump, by Ron Johnson’s time had become a fixture in the sales cycle.

Was it really Amazon who introduced the idea of “Drop shipping?” No, as far as I know, Amazon merely managed to take advantage of Chris Anderson‘s description of Long tail distributions as it applies to supply and demand on the internet.  Amazon’s platform that made it easier for interested buyers to find a supplier no matter how rare or plentiful the good. In other words, Amazon freed consumers from the restraints of retailers merchandising and elaborate distribution schemes.

clip_image002Drop Shipping Loretta Chao explains doesn’t merely reduce retailer’s inventory storage and management costs.  Instead it enables retailers to reinvent their old process for securing product and putting it in the hands of consumers. This lets them compete directly with e-commerce players like Amazon and gain the same, if not greater advantage than Amazon’s platform provides.

Personally, I’m just really excited about what else will emerge, and realizing that DropShipping is just one element of the changes that are here but just not evenly distributed. For example, remember why Kickstarter exists? On one hand it represents the unshackling of constraints forced by manufacturers who limited what designs made it to the mass market.  New designers share their idea and get people to pre-pay and pre-order which makes it possible for more alternative goods making it into production.  The presumption of scale still embedded into the calculations that the manufacturers would need a minimum order to make production worthwhile.

Democratizing design is one thing, but imagine a non-inventory business model, one that puts goods in the hands of consumers faster with more control and choice.I recently heard a panel entitled Rethinking the Design Process at a thoght leader summit sponsored by soho house, Samsung and surface magazine, entitled Intersection 2016. Scott Wilson , original maker of MNML design, spoke with Charles Adler (founder of Kickstarter), Jesse Harrington , designer at Autodesk and Dean DiSimone , creator of Othr dedicated to minimizing the environmental footprint of remote manufacturing.

Direct to consumer, suggests that retail as it has existed for the last few centuries is finally catching up to technology, are at least some retailers. If you want to see who, check the panelists recommended you look at the following: Rapha –a completely different sales model; Tesla back to the pre-order and customize and personalized delivery; and finally Story–who boasts “Point of view of a Magazine,Changes like a Gallery, Sells things like a Store.”

If you have any other evidence of the shift, I’d love to hear about them.

 

Insight, the counter factual to what we know


dot dot dot

A belated response to a package I unexpectedly left for a friend who apologized for not acknowledging its arrival sooner. ended with

” more importantly , I am at a loss for words.  Truly I don’t know what to say . ”

My return reply was this:

Its ok,

“it’s possible to talk about something and have the words themselves not be very telling”

associations ..the dog that didn’t bark?
I stole the quote, but it’s applicable
We live in strange times, and life is strange.
Obviously i was feeling a bit spunky…just looking at the word, makes me laugh.

to exchanges robbed of words but positive sentiments
you are very welcome.

His response:

“Riddle me this.”

I share this as example of human to human conversations.
There’s no chance that a cheeky chatbot would have written such a response. It’s why people are less predictable, making their every move less certain and the exciting part–capable of learning–both to be good or to be bad.

This was my reply.

riddle suggests you want an answer,
don’t have a personal one,
here’s what I’ve been reading and thinking
One. Roger Schank’s latest blasts courtesy reminder from another cognitive scientist acquaintance I made recently:
(Roger writes some great pieces on this…if you find it interesting as I do, here’s another series
Two, the dog that doesn’t bark? Shorthand for a famous turn of the phrase by Conan Doyle ascribed to Sherlock holmes seeking to solve a crime in which it was the absence of information that he cleverly used to solve the crime.  (see the short story  The Adventure of Silver Blaze). He collected the data, framed it in context to get information and then  use the counterfactual to obtain the insight.  What happened, what did you see or hear? When do dogs not bark?  when they recognize someone they know, so obviously it was the trainer….
[note this reference appears in The Big Short  too…great movie!]
Three, Comment I noticed by Leda Glyptis who is now at Sapient…what a great bio!
Extracting value from a wealth of structured and unstructured data, however, is not as much a technical problem, as a business problem. Technical heavy lifting will undeniably be needed to get you from having a ‘data lake’ to being a data-driven organisation but fundamentally: saying ‘there are 10,000 species of snake in the world’ is data; ‘there’s one under your seat’ is information; ‘it is asleep right now, so you can get up and walk away’ is actionable insight.

The whole interview is here:   http://www.femtechleaders.com/europe/leda-glyptis/

My point –make the time to be human, take the time to notice and connect to more of what you know.  The payoff? Surprising insights will be yours