Category Archives: Consulting

The Wisdom Of The Crowd

We’ve all been there. A group gathers to discuss an idea or to brainstorm. Inevitably, the session drags on as we all try to gather people’s divergent views into a coherent whole. It’s the old expression about a camel being a horse designed by committee. What often emerges from this group-think is a solution that makes everyone equally unhappy but often doesn’t represent the best solution to a question.

If you’ve spent any time here on the screed you know that I think it’s critically important to gather as many facts and opposing points of view as possible when facing any question. What I might not have explained clearly enough, however, is the role I often played when working with my team on questions. I was, as I used to tell them, the benevolent dictator, or as President Bush once said, “I’m the decider.” Every group needs one.

It’s hard for groups of people to make decisions. There is wisdom in crowds but there aren’t always enough informed members in that crowd to make what they predict or present of real value. While in theory the inherent biases in the group will cancel each other out, I find that those of the biggest mouths or most senior people in the room tend to dominate, even if they’re way off base or underinformed.

I used to try to solve this by never gathering a group without telling them in advance what topics were to be discussed and to ask them to research the topics and come prepared with informed opinions. You would be shocked how quickly consensus was reached in many sessions because everyone managed to find out the same facts and the solutions became obvious. While you always want the group to maintain an open mind, each member simultaneously needs to have an informed opinion which they can contribute. That’s when the wisdom of the crowd becomes valuable.

People know when they’re being lead to a “group decision” that’s really just one person imposing their will, usually the boss. That breeds apathy or resentment, especially when they know the boss is wrong. Making a decision as a boss – being the decider – once the group has legitimately surfaced a number of potential solutions is inclusive and empowering. Which direction would you choose?

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Filed under Consulting, Helpful Hints

Playing It Backward

I spend a fair amount of time working with startup companies. By definition, these businesses have a lot of planning and building to do. What problem are we solving? How will we make a product or service that accomplishes that solution? What will that cost and what’s the financial plan? How do we gain enough traction to scale? It often seems overwhelming, even to someone with my years of experience. When I can see that there is a fair amount of frustration on my clients’ faces, I’ll usually ask if they know how great golfers think about how to attack a hole.

Stay with me here – this isn’t yet another excuse to talk about golf here on the screed. Great golfers will play a hole backward. They start by thinking about where the pin is on the green (front, middle, back, left, center, or right) using the pin sheet every caddie and player carries. That sheet gives them the location – how many feet on from the front, how many feet from one edge. That allows them to figure out the best angle for the approach shot, which then dictates where they want to land the tee shot. Backward.

I think great business people often play their businesses backward. Some might call it starting with the end in mind but I think it’s more than that. For example, I think it’s a better and more accurate method if you begin with what number of customers get you to sustained profitability and go backward to find out how you’ll scale to that number (I generally use 10x growth per year) than to begin with where you think you might be now and guess at growth rates. The former gives you targets that will get you where you want to go and an ability to formulate marketing and other budgets to support that growth. The latter is reacting to where you might find yourself without a clear path or guidance for budgeting.

I try to play most decisions backward. Where is the pin (my goal)? Where is the best place from which to attack it and how do I get to that place? Execution then becomes simpler – I’m only focused on the next shot – the next task – because I know I have a plan. Do you?

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Filed under Consulting, Helpful Hints

How Facts Can Be Fiction

I was discussing some numbers with someone the other day. It was clear from the conversation that she was taking every bit of data as gospel. I tried to explain a few important things to keep in mind when working with data and as I thought about it perhaps my thinking could be helpful to some of you out there in screed-land.

We all want as much certainty in our business lives as we can get. Part of that is wanting all of our numbers to be facts. They’re not. You may be familiar with the term “sampling error.” Basically, it means that the data is off because the sample from which the data is drawn is not representative of whatever it is you’re trying to measure. While you might think that, for example, your analytics measure everyone, they don’t. Most of the data we read uses some sampling. Sometimes it’s a timing issue – financial data, in particular, can be skewed based on where we might be in a business calendar or where those who pay us are in theirs.

The point is that there are error rates involved with many of these “facts” because these facts are really just estimates.  TV ratings, for example, are probably the most widely known estimates and multi-billion dollar businesses involving networks, agencies, and marketers revolve around numbers everyone knows are not particularly accurate. There are error rates.

Here is the advice I give people. Figure out what questions you’re trying to answer and then find as many different sources of data as you can. If possible, see if you can get multiple people to interpret those data sets. In theory, they should all come up with the same answers. It’s critically important that you NOT tell them what position you’re trying to support (can you find me some information that says we should do XYZ). That is a recipe for disaster because it encourages people only to look at data or interpretations of data that supports what you or they already think is true. That is turning “facts”, which are already often on shaky ground, into a larger fiction, and that’s not what we’re after, is it?

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Filed under Consulting, Thinking Aloud