Business Blog: Hoover’s Business Insight Zone

A happy Monday morning to you, dear readers. I hope this week will treat you well.

In case you’re burning to know my opinion on some matter affecting the business world, let me help your week to go along more swimmingly by extending this offer: Please tell me what you’d like to see written up here, and I’ll oblige if I can.

For a general-purpose firestarter, see the previous post, which lays out this blog’s central themes. Or just graze around to see what interests you. Or just fire off a question ripped from the headlines. You know — suit yourself.

(Image via mybeatles. See how I flatter us both on a dreary Monday in Austin? You get to be the sovereign, I get to be the Beatles. It’s fun to pretend . . .)

More than 500 posts along in the life of this blog, my ideas of what it can achieve are coming together better than ever. With this post, please let me share some of those ideas with you — and solicit your own ideas in return.

Hoover’s covers all sorts of companies — literally, every single sort of legitimate enterprise — and I’ve been given the luxury of a very wide remit by the deeply wise powers-that-be here. (Did I mention that they’re deeply wise, my bosses? O, how I esteem them!)* So in theory I can talk about anything.

If you’ve been reading this blog very long, you’ll know that indeed the conversation has ranged widely across industries, across geographies, across concepts. But the more I sit and think about what value I can bring to your busy day, the more I’m convinced that my real “beat” lies at the intersection of:

• human psychology and
• prevailing commercial modes of operation.

Let me explain: We read all the time about how a deal is going down, about a new policy or piece of legislation, about an executive who’s making waves, about a company or an industry in ascent or decline. And so on. You can be pretty sure that there will be another deal, policy, executive, company, or industry to talk about tomorrow. My mates in the Hoover’s editorial department will make sure that we stay all over that like we always have, and some of them will write up their thoughts on the Bizmology blog (which you’d do well to check out, if you haven’t already).

That’s our stock in trade, and we do it better than anyone else, if I do say so myself. But while Hoover’s as a whole continues to excel at that, what can li’l ol’ me offer as icing on the cake? How about a bigger picture? Something for the longer term? Something that straddles companies and industries and geographies and eras? Something to help you think beyond the here-and-now? That’s what I want to provide.

My belief is that many of the dumb things we see in the business news every day are rooted in basic (or not-so-basic) principles of human thought — the sorts of hangups and blind spots and leanings that affect even the most brilliant among us. Conversely, many of the successes I see come from human beings who remember that business is a human endeavor, and that they should watch out for their own foibles and irrationalities as they make decisions and press ahead in their commercial relations.

In part my focus is an effort to make a virtue of necessity. I love me some nitty-gritty details, and I love my daily swims in the ocean of news and information, but at heart I’m a big-picture thinker, and my fascination for history and for psychology means that I’m forever trying to put the business affairs of today into those larger contexts.

It doesn’t always work — and I’m counting on you to tell me when it doesn’t. Sometimes a simple and direct comment on the latest news is welcome — and I’m counting on you to tell me when it is. But over the long haul, I believe that the best thing I can do for you is to work from my own (unique? oddball?) perspective to suggest ways that current happenings in the business world reflect deeper human realities that will affect the way you do business forever.

This gets all the more interesting because of enormous ongoing trends, including:

• radically increased interconnections across global economies;
• immense geopolitical challenges;
• the threat of broad-scale environmental degradation in our lifetimes; and
• wave upon wave of new tools and media that will continue to unsettle prior arrangements for doing business.

In other words, we have plenty to talk about. I look forward to what comes next in this conversation. And above all, I look forward to learning what only you can teach me.

A-a-and away we go!

~

* I lay it on so thick because I’m a kidder. In all seriousness, this is the best place I’ve ever worked, and for me it just gets better over time.

Kitty Genovese, you’ll recall, was the victim in a dark episode in modern urban history: she was stalked and murdered in Queens, New York in 1964 — not in silence or seclusion, but in the full hearing of her neighbors, all of whom assumed that someone else would do something about what they were all hearing. Horrified reactions to her death prompted not just intense media coverage, but a wave of research into what we now call the “bystander effect.”

Usually I try not to think about gruesome things like Genovese’s untimely end, and I would never make a straight-up comparison between the frustrations we face in the workplace and the murder of an innocent woman. But I was reminded of Genovese and the bystander effect by a short, powerful item by Francois Gossieaux that I came across this morning.¹

The Conspiracy Of Silence - how silence fails…and sometimes kills.

Before turning to the business applications of his thoughts, Read more

This morning I was talking to Tris Hussey via Twitter, and we were musing about why some products succeed while competing products — even superior ones — fail. The specific context was Twitter versus Pownce versus Jaiku.

Note that he and I were having the discussion on Twitter, which, after some initial hesitations, has become one of my main avenues of online communication. (Read: insight, laughs, gossip, professional networking, etc.) Tris, being the early adopter he is, used all three services from the early days. But he says that Pownce and Jaiku have “fallen off [his] radar,” while he uses Twitter all the time.

This takes me back to discussions from earlier years about first-movers and second-movers. Google, it has often been pointed out, was one of seven search engines, and at the beginning it was hardly clear that it would morph into an industry mover of Microsoftian stature.

But in the case of Google, we can at least understand the basic rationale: the interface was (and is) simple and clear, the algorithms kept improving, and the company kept optimizing around search-based advertising. While I like Twitter — and note with pleasure that its stability has improved radically in the months since I started using it — it’s a little early to say it’s smart-like-Google in terms of design or corporate management.

But what Twitter does have is . . . a community. Fascinating, fun people like Tris Hussey and Erin Kotecki Vest and Kate Olson and Shawn Zehnder Lea and . . . well, thousands more — all of whom share their weighty or flighty or mundane thoughts throughout the day. It’s the water-cooler deluxe.

Is that enough to explain its success? I don’t know — but I’d love to hear what you think.

At long last, all of my SXSW Interactive recaps are up and running. For future reference, here are the links all in one place:

• Ahoy from SXSW Interactive!
• SXSW session recap: Henry Jenkins and Steven Johnson.
• SXSW session recap: Jason Fried of 37signals.
• SXSW in the rearview mirror . . .
• SXSW recap: Kathy Sierra.
• SXSW recap: Bill McKibben on climate change and online activism.
• SXSW recap: “Self-replicating Awesomeness.”

While the recapping is done, the process of working through the ideas from SXSW is far from over. Stay tuned . . .

Evoking a post from a couple of weeks ago, here’s a recipe for some thought-provoking online goodness . . .

First, take Netscape, Opsware, and Ning founder Marc Andreessen:

Second, have him comment in detail on the classic “Psychology of Human Misjudgment” lecture of Berkshire Hathaway vice chairman Charlie Munger:

Third, ponder what all of this means for your own career and company.

Fourth, take action as a wiser businessperson.

I’ll have more to say on this later — it’s right in my business-analysis wheelhouse — but for now I’ll just point you to Andreessen’s first post on this subject and encourage you to go grapple with it.

Those who can free themselves from the unfruitful habits that neurology tends to force upon us will achieve true differentiation in the business world.

~

Previously in this vein:

• Irrationality in investment decisions.
• Confirmation bias: fight the Procrustean instinct.

(Andreessen photo from NNDB; Munger photo via Forbes.)

Front to back: Hugh MacLeod, Tara Hunt, Chris Heuer, Deb Schultz.
(Jeremiah Owyang is obscured behind Hunt.)

One of my favorite panels at this year’s SXSW festival was “Self-Replicating Awesomeness: The Marketing of No Marketing,” which was chaired by my pal David Parmet, who does social-media-savvy p.r. work from the New York City area. (He also took the picture above.)

The panel featured three social-media pros whose work I read regularly — Tara Hunt, Hugh MacLeod, Jeremiah Owyang — as well as two who were new to me — Chris Heuer and Deb Schultz. Whether before or since the panel, I’ve gotten to talk with all of these people at least a little bit; they’re good folks who know what they’re talking about when they talk about social media, social networking, and online community. My notes for this panel are long and a little freeform, which is probably appropriate since the panel itself was free-flowing like a good group conversation.

The first question that Parmet threw out to the panel was this: How do you market into a community without coming across as totally skeevy? Someone made that point that, most of the time when we say “marketing,” we actually mean bad marketing — the kind we don’t like having aimed at us. You don’t mind the good kind of marketing.

It’s Not about the Technology

Deb Schultz made the great point — which I think can’t be stressed enough — that marketing, even in its newer, social-media-enabled forms, is not about tools or technology, but about the way you look at your customers. She said that this regard for customers has to be in your DNA, such that you face the hard work of getting out in the trenches and embracing the feedback your customers give you to drive your marketing, customer service, and product development.

Chris Heuer said that he hates the idea that companies (including, occasionally, his own clients) would say, “Build me a community tomorrow!” He thinks that we need an attitudinal shift, to shift people’s mindset from “Stop trying to sell me!” to “How can you help me buy?” Like Schultz, Heuer also commented on the technology angle: he said that social media isn’t new just because it’s a new tech platform, but because it changes the ways that companies relate to customers, suppliers, employees, and local physical communities.

Turn Your Best Customers into Your Advocates

Jeremiah Owyang chimed in about what he’s found out by interviewing companies, Read more

To give you something to think about on this Monday morning, this post applies our earlier discussion on naive questions to our work as individuals.

Naive questions, you’ll recall, are the simple — even childlike — questions that experience tends to grind out of us, but that we should cling to because they bring so much clarity. Questions like “Why are we doing this?” or “How is this going to make us more money?” could save companies untold grief, if we embraced the answers they provoke.

Many of us, when we’re away from the office — or at least out of earshot of the bosses — have no problem asking questions like these of our departmental or company-wide projects. If you’re like me, you’ve known plenty of folks who have made themselves experts at confessing the “sins” of their companies. (Feel free to lob in your own favorite organizational “sins” in the comments.)

But how many of us are willing to turn the spotlight on ourselves?

Suddenly, the chatter stops.

From all of my experience covering business, and from wide personal observation (including, oh yes, painful backward glances at my own performance), I conclude that many of us would benefit from asking ourselves naive questions regularly, both to sharpen the work we’re doing now, and to improve our career paths.

Naive questions work the same way for individuals that they do for companies because we are all managers of our own selves and our own careers. They’re just as hard to face for individuals as they are for companies — maybe harder, since they tend to churn up all sorts of unpleasant emotions.

The good news: you don’t have to convince a team or a department or an HR department or a chain of command to ask these questions when the organization you’re studying it little ol’ you. And when you get your answers, you don’t have to butt your head against companywide policies or decisions to pursue remedies. In many cases, you can alter “policy” for yourself without interference. In fact, if you’re able to dial down the angst and keep an open mind, you can even revolutionize the way you work.

How? Ask a naive question and follow where it leads. Try these short-term questions for starters:

• Which thing that I do at work wins me the most credit with my organization? (Prescription: do more of whatever it is.)
• Which things that I do every day are wasted time? (Stop doing them!)
• Is this meeting necessary? (If not, cancel the meeting if you called it, or beg off from attending if you were invited.)
• Is this project going to make a real difference to the company? (If not, kill it.)
• Which things am I best at in this job? (Do more of them. Beg to be allowed to do more of them.)

There are also plenty of long-term questions that can change not just the course of your working day, but the shape of your entire career:

• If I could write my own ticket, what kind of work would I be doing?
• How much is my current job like the work I dream of doing?
• Am I having the kind of impact I want in my career?
• How much money do I think I deserve to make in my career?
• I say that I want X, Y, and Z out of my career. Would a disinterested observer agree that what I’m doing now is pointing me toward those things?

That last question brings me back to the headline of this post. If you hired a smart, successful stranger to take a look at your life — to audit your work methods, your current job, and the course of your career — what do you think you’d hear back from them? What would be the good news? What would be the bad news?

Just as companies restructure their activities, so can we. Even when it’s emotionally painful, the process can be remarkably straightforward. How many times have you heard, after a turnaround has succeeded, that the new management at a company did crazy things like . . . reducing costs and . . . improving product quality and . . . improving customer service and . . . selling off low-performing businesses?

In many cases, the changes aren’t radical in themselves — they’re often straight out of the Management 101 textbook. The trick is approaching the situation with new eyes and having the guts to ask “dumb” (i.e. naive) questions like “How could we reduce costs?” and “If I were a customer, what would I think of our customer service?” and “Should we even be in this business at all?”

Try it on yourself. Pretend that you are that smart, successful stranger, and carry out a professional audit on yourself. Ask questions like these:

• “How well does she use her time?”
• “Is what he’s doing now likely to help him advance in his career?”
• “Is this behavior likely to win raises and promotions for her?”
• “If he does this project as well as it can be done, will anyone care?”

If the answers are suprising or disheartening, don’t fret — you’ll hardly be the first person to recognize a mismatch between intentions and reality. But if you’ll muster the courage to act on those answers . . . then you’ll be in elite company.

(Photo by Morrhigan.)

Environmental journalist Bill McKibben gave a talk at this year’s SXSW Interactive conference about climate change, and about his new online aimed to combat it, 350.org.

The choice of “350″ requires some explaining, which McKibben did in his plainspoken lecture. The number refers to 350 parts per million (ppm) of carbon dioxide in the earth’s atmosphere, which many climate scientists view as a safe upper limit to stave off climate-driven human disasters. The bad news is that the atmosphere currently has 385 ppm of CO2 in it.

McKibben and his 350.org colleagues want to promote awareness of the number 350 so that citizens around the world will influence their governments to support 350 ppm of atmospheric CO2 as an official target in their policies.

In his talk, McKibben explained that, since he first wrote about global warming in The End of Nature 20 years ago, there have been three major periods in terms of our understanding of climate change:

1. In 1988, global warming was “in the nature of a hypothesis” — Read more
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Does it pay to be like or unlike others in your field?

Some reasons to be like others:

• If there are genuine best practices in your field — like the body of technical knowledge built up around the job of flying a commercial airliner — it serves you well to follow those practices. In other words, you can harness the benefits of “standard work.”
• It might make your work easier to understand — for customers, for employees, for yourself.
• You can mimic the success of the best in your field, e.g. in the way that JetBlue has copied some of the best practices of Southwest and Alaska Airlines.

Some reasons to be unlike others:

• Product or market differentiation. If you do what everybody else does, you run the risk of getting everybody else’s results — which will, by definition, be average when regarded across the board.
• Anecdotal evidence tells us that many of the great performers behave quite differently from their peers, whether we’re talking about Albert Einstein or Google or J. S. Bach.
• Doing things differently often allows you to look at the world differently, which in turn allows your mind to make breakthroughs unavailable to those following the status quo.

In the real world, this isn’t such a bipolar question: hybridities abound. Toyota, for example, pursues rigorous standard-work manufacturing processes that are (now) widely dispersed around the world. But their devotion to making small, incremental, boring improvement to internal processes sets them apart from other car makers.

My Hoover’s colleague Russ Somers, whose education includes both touchy-feely social sciences (his description) and math-nerd quantification, suggests that this whole topic could make for a fascinating data-driven research project. Someone brilliant could measure companies on various metrics — market share versus margin, communication practices, average length of work-week, and so on — and figure out how much variation, and what kinds of variation, are beneficial.

Meanwhile, though, let me poll the audience here: In what ways should you be out of step with your peers? And in what ways should you be looking for “best practices” in your line of work — or in your personal working day?

(Photo by B~.)