Tag Archives: Strategic management

Clear Headed

I’ve been MIA from this space for a few days (hopefully you’ve noticed). I caught some kind of a bug and it pretty much laid me out for a few days. Body aches, a little congestion, and a foggy brain. I had zero energy and just wanted to sleep. More importantly, I couldn’t really focus my thinking on anything.

This may come as a shock to you but I do put a fair amount of what I hope is clear-headed thought into the screed. While I might have been able to force myself to spend a lot of extra time to write something, I thought it a better course of (in)action just to give it a rest. I’m a big believer in doing nothing when one’s head is foggy and let me explain why.

“Foggy” to me just doesn’t mean the state I’ve been in over the last few days. Foggy is when things are unclear at all. It may be because you’re distracted or it may be because the information you need to make a decision is incomplete, unclear, or inadequate. Jason Day, for example, withdrew from a golf tournament a couple of weeks ago because he was distracted by the fact that his mom was having surgery (she’s fine) and he couldn’t focus. Rather than making bad decisions on the course, he made a great one and left it.

Each of us needs to think along the same lines. Sure, sometimes fuzzy logic is called for because we can’t get enough information. In and of itself, that’s a clear-headed decision you make. Oftentimes, however, anything from a cold to a hangover to a family matter to office politics can reduce or eliminate your ability to focus. Those are the times when we need more time because I don’t concur that a bad decision is always better than no decision.

What do you think?

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The Margin Of Error

One bit of my old life as a broadcaster that I seem unable to leave behind is the ratings. TV ratings – and specifically those from Nielsen – are the currency of the TV ad business and billions of dollars of media are bought and sold based on these numbers. What caught my eye this morning was the reporting of last week’s late night ratings and the analysis connected to the report. The writer did a good job dissecting the numbers except that they conveniently failed to mention one thing that should be instructive to any of us in business: the margin of error.

English: Graph showing weekly Nielsen Ratings ...

(Photo credit: Wikipedia)

What the author failed to mention is that there was no statistical significance between the reported audiences in any of the numbers that Nielsen was reporting. Since the numbers discussed in the piece were Adult 18-49 numbers, the reporting is based on a subsample of Nielsen’s panel, meaning that the margin of error is wider than on all the ratings as a whole. While I don’t have a rating book in front of me, I know there always used to be a disclaimer in every book explaining that the numbers it contains are only accurate up to a point. They’re estimates. When we’re looking at number this small (and the late-night numbers are in tenths of a point), it’s just as possible that the network reported in third place could, in fact, have more viewers than the network reported as in first place.

The point here isn’t to denigrate the ratings system (I’ll save that for another screed). The point is to remind each of us that almost every piece of data that we look at needs to be taken in context and with appropriate disclaimers. What I find helpful is to pay attention to trends and not to absolutes. The only numbers without a margin of error are those pertaining to actual money received and actual money spent, and even those are generally only snapshots of a moment in time.

The next time someone comes to you with a data point, ask about the margin of error or about any factors that could affect that data. New visitors to your website are up? What percentage of people routinely delete cookies and, therefore, seem to be new when they’re not. App installs are up? How many people deleted the app last week, was that an increase, and could the new installs, in fact, be reinstalls? See what I mean?

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How Do You Know?

There is an old joke about the greatest inventions of all time. The last one mentioned is the thermos, which can keep soup hot on a cold day and water cold on a hot day. When asked why that makes it the greatest invention of all time, the respondent asks “how does it know?”

You probably face that question all the time in your business. How do you know? More specifically, how can you be sure that you’re in touch with what your customers really want? Maybe you think as Steve Jobs did: customers don’t know what they want until you show them. Here’s the unfortunate truth: you’re not Steve. He may have had a wonderfully intuitive gift for understanding what it was that customers wanted (although there are several examples of him being wrong several times along the way) but you probably don’t.

We can’t spend our time in business finding solutions for problems that don’t exist nor can we build products for which there is no demand. You might not have heard of any companies that do that. The reason is that they’re out of business.

We need to listen to our customers and to the market. We don’t need to spend a lot of money to do so. Analytics are a form of listening and the data doesn’t lie. There are numerous free survey tools available. If you have social media presences (and what business doesn’t?), you are getting feedback on a regular basis, as you are if you have commenting turned on for your blog posts. Maybe you have listings on any number of review sites such as Yelp or TripAdvisor. Do you review those for insights into what it is your customers are thinking?

Make stuff people want. Fall in love with your customers and their needs and not with today’s version of what it is you’re offering. Move quickly to get closer to your customers’ ideal product. Ask them about things and listen to the answers. That’s how you know. OK?

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