Category Archives: Consulting

Do We Really Want Mullets?

Anyone remember the mullet? You know what I’m talking about: the haircut that’s “business in the front, a party in the back.” I think the last time the mullet was popular was when it was sported by members of the Pittsburgh Penguins when they won The Stanley Cup in the early 1990’s. Since then, it’s become more of an object of ridicule than a hairstyle to be admired. I think we’ve come to recognize that we can’t be both businesslike and a party at the same time.

I thought of the mullet the other day when I read that Facebook was testing resume-building features so that users can share their work history with their Facebook friends. They’re obviously trying to hone in on a space dominated by LinkedIn. The curious thing is that your “resume” doesn’t really display. It seems as if Facebook is simply gathering the information which one can assume they’ll use to fuel a service for headhunters and active job seekers. There’s actually a couple of points we can think about here.

The first is that most of the people I know (myself included) use different social sites for different purposes. Many of my Facebook friends are not work-related. We’re not generally connected on LinkedIn. I don’t cross-post (other than the screed) content on the two sites since I don’t especially think my business contacts care about what food I’ve eaten or what concerts I’ve attended or my political views. Conversely, I don’t bore my non-work friends with the three or four business-related articles I might come across that I find interesting.

From what I can tell, most users can distinguish between the appropriate content for the two sites. Frankly, I think Facebook knows way too much about each of us anyway, and I’m not sure that I want them to know much more about my work life, my contacts, or anything else I keep in the workplace. I certainly don’t want potential clients considering anything other than the professional qualifications available to them on LinkedIn – not my musical tastes, not my politics and not my sad attempts at humor with friends.

More importantly, every business needs a focus. Facebook, in particular, seems to have decided that anything is fair game. They’re trying to out video YouTube, to out marketplace Amazon, and to compete in areas such as food delivery. In the meantime, they can’t even decide if they’re a media business (hint: they are).  Each of us needs to figure out what business we’re in so we can channel our resources, focus on our competition, and understand what problems our solutions can solve to serve our customer base. Chasing the next shiny object or growing beyond our core competence generally is more trouble than it’s worth. That’s how we end up with a mullet and is that what we really want?

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Filed under Consulting, digital media

You Can’t Handle The Truth

There has never been a time when it’s been easier to get information. If you don’t believe me, pick up that computer you keep by your side most of the time (that would be your smartphone), push whichever button activates either Siri, Google Assistant, or whatever flavor of virtual assistant you have installed, and ask what the weather will be tomorrow. Ask who the Prime Minister of Denmark is or a few ways you can cook a turnip. We have the world at our fingertips.

That can be true with business information too. Traffic to your media properties, interactions with your content, results of your ad and social media campaigns, and feedback on how your company or brand is interacting with the world at large are all readily available for analysis and action. So is customer data, market predictions, and just about anything else you’d need to know. Pretty awesome, right?

The problem is that not everyone wants to know the truth about these things. Take the manager whose staff is leaving in droves. They “hear” it’s because of a better offer but they don’t take the time to sit down and dig into if there is an underlying problem in their operation. They couldn’t handle it if the problem was really them and their management style so they avoid the question.

Then there is the web person who is under pressure to keep growing traffic and doesn’t bother to exclude the kinds of traffic that inflate the numbers. You know: your own internal use of your website, traffic from places where you don’t do business, referrer spam or other obviously fake traffic. They know the truth but their bosses can’t handle it.

The problem with having information is that it compels you to act. We can always deny there is a problem if we don’t know about it or if we think the information we have is inaccurate. As with the law, ignorance is no excuse in my mind. I’ve been in meetings where some excellent forecasting predicts a downturn in a company’s business but several members of the management team want to expand their spending. The forecasts are subordinated to the feeling that more spending will yield more revenue despite the fact that the company’s share of the market has been steady for years and probably won’t increase in a downturn (which is basically what the managers are predicting). They couldn’t handle the truth: they need to tighten their belts and ride out the next few quarters. They’re no longer in business, by the way.

We hear an awful lot about fake news and there certainly is some out there to be ignored. Your business analytics don’t fall into that category and you ignore them at your own peril. If you can’t handle the truth, you can assume that reality will handle you one way or another. OK?

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Filed under Consulting, Reality checks

Is Crowdfunding A Killer?

One of the ways I’ve been working with startups to raise money is through crowdfunding. You might be most familiar with Kickstarter but there are dozens of other companies that help to fund companies that are too small for VC funding but need capital to grow.

I’ve always thought that this was a good thing. Many entrepreneurs aren’t well-connected to a network of people who can afford to invest. Having entities such as Kickstarter available to raise the startups’ visibility and to grow their investor pool seems valuable. Something I read this morning, however, challenges my thinking.

Crowdsourcing initiatives like Kickstarter are hurting innovation, according to a new study from a business school, INSEAD. Researchers found that the ‘crowd’ appetite for investing in innovative products is startlingly low. Claims of novelty and usefulness are viewed unfavorably and result in lower pledge figures on crowdfunding initiatives. This is significant as the equity crowdfunding industry is set to surpass venture capital as the leading source of startup funding.

Data from Kickstarter from its inception in 2009 to 2017 was interpreted by state-of-the-art machine learning technology that incorporates speech and image recognition, seasonality, perceived risk, etc. to determine the funding success of both ‘novel’ and ‘useful’ products. This is the first time large-scale speech analysis and image recognition has been applied to the study of innovation. You can check out the full research here. What it found was that the Kickstarter community does not view claims of product novelty and product usefulness as congruent. While the total amount pledged is boosted when a product is said to be useful (or alternatively, novel), claiming that it is both reduces the total amount pledged by 26 percent.  In fact, a single claim of novelty increases project funding by about 200 percent, while a single claim of usefulness leads to an increase of about 1200 percent, as compared to projects devoid of any such claim.

I’ll let three academics explain why this might be hurting innovation:

“Prior research has shown that products that are novel and useful typically succeed in the marketplace,” said study co-author Amitava Chattopadhyay, Professor of Marketing and the GlaxoSmithKline Chaired Professor of Corporate Innovation at INSEAD. “But when projects make both claims, backers either assume a product’s benefits are inflated, that it carries a high risk of failure or that it divides the crowd between believers and skeptics, making it hard for backers to pick a side.”

“The higher level of uncertainty in the crowdfunding context drives backers to choose modest innovations and shy away from more extreme innovations,” said Cathy Yang, Assistant Professor of Marketing at HEC Paris.

“This is deeply disappointing as the premise of crowdfunding is to support creativity and innovation”, said Anirban Mukherjee, Assistant Professor of Marketing at Singapore Management University. “Entrepreneurs, therefore, might be advised to frame a project as only novel or only useful, rather than both”, Dr Ping Xiao of the University of Technology Sydney (UTS) added.

Something I’ll be keeping in mind when putting together a crowdfunding campaign. It seems a little sad though, doesn’t it?

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Embracing Change

“The only constant is change” is an old saw, but it got to be so because it’s true. I mean, it was uttered by an ancient Greek philosopher (Heraclitus) and has been repeated for 1,500 years. Change is inevitable yet a lot of us are incredibly resistant to it. We carry that resistance into our business lives as well.

Most businesses are pretty good at living in today. They have a grasp on their current situation and have allocated resources to deal with their daily operations based on that situation. A lot of businesses also have a grasp on what will happen tomorrow. They plan lines of succession within departments and train their staff to move up. They allocate capital to grow strategically based on how they see tomorrow playing out. Generally, the short-term doesn’t portend radical change.

The problem occurs when you ask businesses (and people) to think about the day AFTER tomorrow – the longer term in which change occurs. In some cases, people don’t even recognize that there will be a day after tomorrow. Try to have a chat with a 23-year-old employee about retirement and the need to start saving today for something 50 years down the road if you want proof of that. A lot of managers guide their businesses based on a series of short-term plans and goals without contemplating the sustainability of their plans over long-term. They don’t embrace change because they don’t want to accept that it’s going to happen.

The music business fought change and where are they now? My beloved TV business is going through this now as they continue to deny cord-cutting is a problem and refusing to adjust to this massive change. On the non-business side, I believe that many of the challenges our country faces are due to the refusal to accept how our demographic and economic base has changed. That refusal, both in business and outside of it, sparks fear as the signs of change become more prevalent. It’s really only traumatic, however, if we try to resist rather than accepting change and planning for it.

I believe in controlling your business. That means you need to contemplate change, accept it, and revise your plans before change happens to you and not because of you. Things happening due to circumstances beyond your control should be rare if you look to the day after tomorrow, embrace the inevitable change, and having a clear picture of where you’re going, not clinging to an unreasonable and unsustainable changed past. Make sense?

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Filed under Consulting, Thinking Aloud

Unintended Consequences

It’s Foodie Friday and I have unintended consequences on my mind. What spurred that were a couple of food-related things. I went to do some research about an alcoholic product and of course, I was asked to verify my age before being allowed to read the brand’s website. I assumed that was some sort of regulation imposed on beer, wine, and booze makers since it’s the sort of thing I caution clients about doing all the time: preventing the user from completing their task as seamlessly as possible. As it turns out, there is no rule requiring alcohol brands to do this. What it might do, however, is deter the very people who should have more information about alcohol – young people – from getting educated. This is an unintended consequence. If they lie about their age to gain access, you’ve also caused them to violate the Computer Fraud and Abuse Act, and making them break the law is another unintended consequence.

I also read a piece on the growth of restaurant delivery services:

As mobile food delivery apps like Seamless, UberEats, Caviar, and Postmates steadily expand their delivery zones and their customer bases, many restaurants are increasingly relying on delivery orders as a significant source of revenue — and they’re having to adapt operations accordingly to keep up with demand.

The unintended consequence here is that restaurant personnel are often spending so much time servicing the take-out business that the customers seated in the dining room have a lesser experience. Putting aside the fact that there is the potential for a restaurant’s reputation to suffer when the product delivered is way inferior to the product in the dining room, a failure to properly prioritize the kitchen to service the folks who have journeyed to the dining room could set up a lose-lose situation, with neither the folks eating at home nor the people eating out being satisfied. There is also the stress caused by having to refine the operations plan to support the take-out business.

We see unintended consequences all the time. Kudzu went from being an ornamental plant to a menace. When the British governor of Delhi, India addressed a cobra infestation by putting a bounty on cobras, they got more, not fewer, snakes, as people raised them to collect the bounty. I’m sure you’ve seen examples in your business of this, whether it’s a different response to a price change than what was anticipated or a sudden wave of popularity of a brand or product based on some bit of social media madness.

Whatever it is, it’s incumbent on all of us to think about every decision in the context of what the effects of a course of action might be. Who is affected and how? How will it affect competitors and what might their possible responses be? Do this more each alternative you’re contemplating and your odds of avoiding an unintended consequence will improve. You with me?

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Filed under food, Consulting

Navigating To Success

One of the roles I play along with my regular consulting gig is an advisor. I am what’s call a “Navigator” at one of the oldest incubators in the area. Each month, the Navigators get together and listen to a pitch from a resident company. It’s good practice for them (you can NEVER have enough practice pitching your business) and it’s good for us to become better-versed in what’s going on.

Most of the companies headquartered at the incubator are engaged in scientific research of some sort and there are a lot of Ph.D.’s wandering around the building. They know a phenomenal amount about their fields and about the company they’re germinating. The problem is that they don’t seem to know that they’re building a business and not a science experiment. We had one of these get-togethers yesterday and I was speaking to another Navigator, comparing notes about the companies we’ve seen and the pitches we’ve heard. He had found, as had I, that most of these very smart entrepreneurs had no trouble explaining the nuances of some very complicated science but had massive difficulty in explaining how they were going to make money.

A book from a few years ago wrote up research that found that 87.5% of Millennials disagreed with the statement that “money is the best measure of success.” On a personal level, I couldn’t agree more with their thinking. There ARE many more important things in life that reflect success and failure. On a business level, unfortunately, that’s dead wrong. When you raise capital, your ability to provide a return on that investment – i.e. money – is the measure of success. Otherwise, you’re not a business: you’re a charity. Since these entrepreneurs – almost all of whom are Millennials – claim to be building businesses, part of what I and the other Navigators help them do is to focus on the business of their business and not just on the science and their products.

We ask them the kinds of questions I hope you ask yourself. What problem are you solving? Who else is solving it? Why is your solution better? How much will it cost to build your product at scale? How is it priced? What is the profit margin? What’s the competitive set in how big a market? Pretty basic questions, I know, but these are smart people who have never been asked them before. The ones that can answer them clearly are the ones that will get funded and survive. Do you fall into that group?

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Filed under Consulting, Helpful Hints, Thinking Aloud

I Don’t Need A Hero

If you’ve spent any time reading this drivel, you’ve probably seen my constant nagging to provide value by solving problems. No, I’ve not changed my thinking about that, but I’d like to put one stipulation on the statement: make sure that the problem is real. I’m thinking specifically of those people who have hero syndrome. Not the seriously ill type such as the firefighter who is also an arsonist, lighting fires so they can save the day. I mean the people who are constantly solving problems that don’t exist.

I used to work with someone who would stick their head in my office and report that some client or partner was having an issue. They also told me not to worry – they were on the case and would handle it. Phew! Of course, it was rather odd when I mentioned to one of the “saved” partners that I was happy that my team member was able to solve their issue and the partner had no clue what I meant. Fortunately, the “hero” in question moved on not long afterward.

The other side of the equation is also true. There are people who are the “go-to” people in various areas and who become indispensable, so much so that their mental and physical health can suffer because they don’t want to disappoint anyone. It’s another aspect of hero syndrome. They feel as if they won’t be appreciated if they ask for help. Instead, they often become bitter, burnout, or both.

How do we handle people with hero syndrome? First, make sure the problems they are solving are real and are worth solving. Not everything is a crisis, you know. Second, make sure that they have the resources to solve the problem quickly, efficiently, and completely.  Sometimes for those of us who were higher-ups, it means getting your hands dirtier than usual, often doing work for which you’re overqualified. I always felt as if I was paid to be everyone’s safety net, so if it was a job I could do, I did it. I have plenty of paper cut scars from making last-minute copies and assembling binders when I was needed. Finally, pay attention to the folks who are constantly being heroes. Make sure they’re not lighting the fires they’re busy extinguishing. Make sure no one is constantly backlogged with work and everyone knows it’s OK to just say “no” when they’re overwhelmed. Those times are when those of us in management earn our pay.

Make sense?

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Filed under Reality checks, Helpful Hints, Consulting