Business Insight Zone

[A shortcut to the good stuff -- the month's most-viewed posts -- for anyone who visits the archive.]

1. Favre’s trade is a lesson in how to price a deal.
2. “What business are you in?”
3. When is it time to kill a project?
4. Update: American Airlines is NOT on Twitter.
5. Dreams and Duties in the course of business.

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Image by Kevin Dooley.

In the comments of last week’s post on unsolicited feedback, Vicki offered this useful corrective:

I’m concerned that you’ve used the term “feedback” in this post to mean criticism. Feedback can and should be of many forms, including praise, thanks, and kudos. Too often, people respond when something seems wrong but forget to say “great job” or “Thank you” when something goes right.

This ties in with your comment of “pairing criticism with a dose of praise”. If you’re known for only providing criticism, everyone will expect a “but” (”I really like what you’re doing with this project . . . but”) and knowing its coming won’t make it easier to take — and will dilute the praise because we’re just waiting for the “but…” that always follows.

Take the time to be sure that you ALWAYS provide feedback. Ensure that positive feedback occurs more than half of the time. Become known as an honest and fair evaluator. Then, when you have criticism, no one will think “Yeah, but s/he’s always criticising.”

These are excellent points, and I endorse them wholeheartedly. In fact, I would go a (half-)step further and say that we should be giving honest feedback across a spectrum as a matter of course:

Unalloyed praise.

Sometimes a friend or colleague will just nail it. When they do, let them know it and let others know it. (Be careful not to put a shy person on the spot too much — the right setting for the public praise might be a toast at a team lunch rather than an all-hands meeting.) Frequency: rare. If you overdo this kind of praise, people will think of it as coming from your own over-the-top enthusiasm, rather than any objective assessment of others’ merits.

“Attagirls” and “Attaboys.”

This should be the most common mode of praise. Examples:

• “Hey, thanks for walking us through that proposal. You had a lot of good ideas in there.”
• “Thanks for taking this on — it’s obvious you’ve been putting a lot of good work into it.”
• “I liked what you said in the meeting. I think you handled Bill’s objections well.”
• “Right on — that’s good stuff.”
• “Thank you.”

This is the grease of everyday good relations, and it should be applied as liberally as possible so long as (a) you mean it sincerely, and (b) others take it as sincere.

Thinking-out-loud critique.

To me, this is the most effective form of feedback — not praise or criticism pe se, but an open-ended discussion of the ins and outs of an idea, a project, or a performance.

This is what I think of when I see veteran members of a sports team talking with each other or with coaches. You see them looking at the field, or using their hands to indicate positions of players, of bat and ball, or whatever. They’re probing for answers (“How are you handling that ball up and in?” “Where do you want me to put the pass when we run this play?”), not delivering packaged kudos or slams.

The “sandwich.”

A friend of mine says that this is her tack for delivering ordinary criticism: you sandwich something negative between two doses of praise: “I like what you did with X . . . I think Y would be better if . . . Overall, I think this is great.” If you do it sincerely, and if you mix it in with the other techniques here, you can avoid the “but . . .” reaction that Vicki rightly diagnoses.

“You’re doing it wrong.”

Once in a while, you need to tell someone that they’re wrong in the sense of being wrong. Not kinda-sorta. Not “It might work better if . . .”Not “From my perspective . . .” I’m talking about delivering an uncut dose of sour news.

Here’s where I need your help: I can tell you that this form of bad-in-a-bad-way feedback should be rare, and I can suggest that you might want to deliver this when the target of the criticism is in an open frame of mind, but . . . that’s about all I’ve got so far.

What say you — about delivering sour news or any of the rest of this spectrum? How do you deliver feedback?

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(Photo by srqpix.)

Ripped from today’s headlines:

GM Dealers Report ‘Resurgence’ in Pickup, SUV Demand

On the one hand, good for GM. Like the other Detroit automakers, they’ve been sitting on piles of unsold trucks and SUVs, and this helps them clear that inventory. (Then again, they’ve been doing it with all kinds of fire-sale tactics, including huge cashback and discount promotions.)

On the other hand, the consumer choices behind this resurgence may be ill-informed:

“We’ll see some stabilizing in pickup and SUV sales now that gasoline prices are off their high mark,” Erich Merkle, a Grand Rapids, Michigan-based analyst for consulting firm Crowe Chizek & Co., said in an interview. “Part of the problem for buyers was they didn’t know when gas prices would stop rising.”

Merkle’s comment is fine — and, I’m sure, accurate — insofar as it goes. But to give us a better look at the future, I would reword it this way:

“We’ll see some temporary stabilizing in pickup and SUV sales now that gasoline prices are temporarily off their high mark. Part of the problem for buyers was they didn’t know when gas prices would temporarily stop rising.”

I say this because plenty of oil-price watchers think that oil prices still have a long way to climb, their recent decline notwithstanding.

It will be a shame if many consumers buy SUVs and pickups now, lulled by temporarily less-horrible pump prices, only to see a gallon of gas go to, say, $5.50 in the next year.

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Related posts:

• Should oil get more expensive?
• $134.13
• How inelastic is gasoline?

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(Photo by Mykl Roventine.)

First, you get four musicians:

Four is what you want, unless it works better with three:

Or five:

Or two:

Or a great big crew:

The moral of the story:

There is no perfect way to build a rock band.
Find musicians who play well together, and play a lot.

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(Photos: U2, The Police, The Decembrists, The White Stripes, Parliament Funkadelic.)

Interior of a Sea Leopard yacht.

Dematerializing (parts of) supply chains

James Governor of Greenmonk Consulting is doing fascinating things to help businesses build more sustainability into their operations. His research takes him to many companies, including some of the biggest (IBM, Microsoft, Sun, etc.), to study their approaches to these challenges.

For instance, earlier this summer he got to visit the Bristol, England labs of Hewlett-Packard. He wrote up the findings of his visit in this post on the Greenmonk blog:

On HP Labs, Sustainability, Energy Demand Management and Bit Miles

HP most obviously impacts the 2% of global energy use — and greenhouse emissions — associated with IT hardware. Smart design of future servers and data centers can help reduce this impact. But IT’s 2% can also go much further when it helps to “dematerialize” other aspects of business supply chains. As James puts it:

I like HP’s narrative of dematerialisation, whether we’re talking about printed pages or processors. Don’t make things manifest unless you actually need to. That’s a key to sustainability.

The past luxury of waste

The Greenmonk/HP logic hardly prevailed in the past. From the Industrial Revolution through the 20th century, the fundamental cheapness of energy meant that you could “make things manifest” with regard mostly to the cost of their materials and labor; this often went along with limited regard for energy use, and no regard for emissions and other “footprint” metrics. But that was before energy got expensive and stayed expensive, and before concerns about climate change and other environmental problems became widespread.

In other words, we had more than 100 years of being able to think, “Ah, let ‘er rip — we can afford it.” So that’s what we did. But now we’re constrained like never before.

If we want to successfully navigate this fundamental change, it’s going to take much more of the kind of thinking that HP and Greenmonk are doing.

Designing a yacht means working with constraints

Here’s the metaphor that’s guided my thinking about these changes:

• The past century of widespread, unconstrained wealth-building has been like designing and building a house.
• This new century of globalized, constrained wealth-building is like designing and building a yacht.

Whether you’re building a house or a yacht, you can do it across a wide range of budgets. You can include or exclude a huge range of features based on what you want and how much you can afford to spend.

But when you’re designing a boat, your fundamental considerations don’t stop at “Do I want it?” and “Can I afford it?” You also have to consider “How much space will it take up?” and “How much will it weigh?” These concerns are often trivial for an architect designing a mansion; at the worst, maybe you build up the foundation to accommodate the weight of a flagstone fireplace. But on the yacht, you rule out the flagstones altogether, simply because you can’t afford to warp the whole design to accommodate one nice-to-have-but-inessential feature.

When you’re done building the boat, it could be cheap, it could be luxurious, it could be makeshift, it could be elegant — just like a house. But it can’t be indiscriminately large.

Now, when you transfer this metaphor into the world of sustainable design and business, you’ll run into plenty of folks who dig in their heels. They don’t want to admit constraints, even when you show them the math for why the constraints are beneficial, and show them all the wonders that are possible as we build this new giant luxury yacht of the global economy. They want that flagstone fireplace.

Time will tell whether they can afford it, I guess. My money’s on those — like James — who are figuring out how to achieve environmental sustainability while also doing very well for themselves and their customers.

What the boat-building mentality could mean

How will they achieve this hybrid success? Spelling it all out would take forever — after all, this is the stock in trade of Greenmonk, green building firms, profit-seeking solar energy companies, and so on. But here are a few points of reference to start us off:

• Savings. Years ago, Pasquale Pistorio of STMicroelectronics started the giant European chipmaker on the path of reducing its effluents — not, primarily, for environmental reasons, but because as an engineer he realized that exhaust gases and fluids represent waste in manufacturing processes. And waste costs money. Other big manufacturers like DuPont have jumped on the same train — and reaped huge financial rewards, not to mention good press and lower compliance costs.
• Innovation. Inspired by Kathy Sierra, I’ve written several things about how constraints can bring out the best in us. Just think of all the innovations that have come about in electronics by the desire to make radios, televisions, computers, etc. handheld, portable, and wireless. Constraints fuel creativity.
• Entrepreneurial opportunities galore. We’re already seen waves of startups in non-fossil-fuel energy. Likewise, there’s a long, rolling boom in many fields (green design, efficiency engineering, etc.) that will contribute to better sustainable practices in the long run.

Nautical versions of land-based amenities tend toward the compact and the nifty, and there are plenty of specialist firms that supply the world’s boat makers. I wager we’ll see the same thing happen — on a much larger scale — around sustainable materials, computing, supply chains, and on and on.

I’m not saying that this future will be easy to navigate — but if you’re a fan of innovation, what’s not to like?

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Related posts:

• The greatest challenge of business: Both/And thinking.
• Not logic, but culture.
• Proof of Concept for carbon-neutral futures.
• Expectations of waste.
• An ethic of waste.
• What we waste without worrying.
  

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(Photo by kidsire.)

Waaay back in my college-bachelor days, I managed to keep my dance card reasonably full — despite a paltry bankroll and the un-Cary Grant-like face you see in the sidebar — simply because . . . I talked to women.

I know, I know, I am just full of breathtakingly original strategies.

Yet my massively oversimplified approach — talk to lots of girls, be nice to everybody — got me a lot more dates than a buddy of mine. He easily had as much to offer as I did to prospective girlfriends, but he was too full of theories about how he should go about it, when would be the perfect time to make his move, and so on.

Don’t overthink.

Thing is, our smarty-pants brains love to come up with reasons why not, reasons to delay, reasons we’re not ready. And it doesn’t matter if we’re talking about asking for a date, launching a new project, asking for a raise, or starting an entrepreneurial venture.

Sure, sometimes you need to concern yourself with timing. I wouldn’t recommend opening your summer action-blockbuster movie on the same weekend as the sequel to Iron Man, for example. I wouldn’t recommend paying a call to Wal-Mart‘s buying offices before your infrastructure can be ramped up to fill any order they might choose to place.

But unless there’s a specific, compelling reason to delay . . . press “Play,” walk right up to the object of your attentions, and ask if you can have this dance.

A confession

Sometimes I struggle with pressing the “Publish” button for posts on this blog. I want to do more homework, or I’m not sure which post I should work on first, or . . . well, it doesn’t matter, does it? The point is, I can be prone to delay.

The antidote: work straight through, get it done, then send it out into the world. If it needs fixing, I can fix it — just like, back when I said something goofy to those college co-eds, I could laugh at myself and say “Let’s try that again.”

How do YOU overcome the tendency to delay?

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(Picture by Robyn Gallagher.)

I can’t give away too much right now, but suffice it to say we’re going to have a big pile of goodies for you right after Labor Day — and throughout September.

Stay tuned . . .

We live in a world of unfettered choice. In our business lives, in our private lives, with colleagues, family, or friends — our options are practically infinite. And no matter how much we test, read, buy, or sample, there’s always more where that came from. There’s more every day — every minute.

Yet we don’t live in a world of unlimited time. We don’t have unlimited attention or mental energy. Indeed, time and attention are exactly the things that come in the most sharply limited quantities. (Shameless mercenary note: this is why Hoover’s exists — because you don’t have time to go digging up detailed company information yourself.)

Our thousand avenues of communication — from Twitter to the good ol’ landline on your desk — throw the gates open, letting all the world’s fascinating people and ideas (along with the duds) stake a claim on our attention and on our precious time.

• Our colleagues ping us day and night.
• We proof the PowerPoint deck from home at 11 p.m.
• We answer the Facebook message from an old friend we haven’t seen in years.

This is how we work and live now, many of us, and it’s brought us all manner of good things. What it hasn’t brought us is . . . time to think.

Sometimes you have to close the gate. Not to deny all entry to those outside, but to reinforce a useful boundary, one that helps you to do better work.

When the gate is closed, you can still check the weather. You can still smell the flowers. You’re in earshot of the street. But you’re not at the mercy of every ping, ring, buzz, and beep that wants a piece of your attention.

I’m thinking of this because I’m looking at a giant stack of blog posts that are between 5% and 95% done. Even if some of them turn out to be brilliant, they’re not doing you any good for as long as they’re unfinished, and they’re not doing me any good while they’re weighing on my mind.

Yet it’s so easy, out of simple habit, to launch myself back into the tide of new information that washes in each morning. E-mail, news headlines, RSS feeds, Twitter streams, updates from Facebook and LinkedIn — the list keeps growing.

So, just for a little bit, I’m swinging the gate shut. Behind the gate, those blog ideas can ripen into more posts that you’ll want to read and I’ll be proud to publish. (And some of them, no doubt, will be put out of our misery before they ever see the light of day.) If I do this right, you’ll see more posts, and better posts, in the days to come, and you’ll get quicker and fuller answers to your comments — which I wholeheartedly encourage you to make.

But if I do it right, you’ll also see much less of me in other venues. I won’t go on a tear of commenting on others’ blogs, at least for a week or tvo, and I may be a little slower answering e-mail, and I won’t tweet so much.

But when it’s all said and done, I hope you’ll agree that it’s worth it.

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“Good fences make good neighbors.”
~Robert Frost

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(Photo by tifotter.)

Then stop doing the things that aren’t making you more money.

Sure, that’s simplistic — but if it were easy advice to follow, everyone would already be doing it. And sometimes, simplistic is good for getting us to think about what’s really meaningful.

You can profit from things that make you money directly:

• Hiring extra salespeople.
• Adding another production line.
• Retooling your Web site to make it easier for people to buy from you.
• Using more efficient equipment, or better-priced vendors, to lower your overhead.
• . . .

You can profit from things that make you money indirectly:

• Lowering phone response times in your call center = happier customers likelier to do more business with you.
• Promoting a positive corporate culture = happier employees who get more done and stick around longer, lowering attrition and H.R. costs.
• Pursuing savvy p.r. and social media strategies that help you find out what people are saying about you (feedback that can help you change in the right direction), and help you to better interact with your customers (promoting their loyalty).
• . . .

But you can’t profit from things that make you money neither directly nor indirectly:

• Long, pointless meetings where one or more people bloviate to (a) hear themselves talk, (b) practice CYA, or (c) both.
• Perks for the sake of perks, or for the sake of stroking egos that would be better served with challenges.
• Dithering about the color of the bikeshed and other rudimentary decisions.
• Remember back when Lucent owned a golf course? Seems relevant to mention.
• . . .

What examples can you give of common practices that can’t make money for a company either directly or indirectly? Feel free to state the obvious, and feel free to comment anonymously.

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Related posts:

• Book Review: Why Work Sucks and How to Fix It
• What works better than most meetings?

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(Photo by AMagill.)

A better question for many of us is “Who CARES who won the medal count?” That, at least, was a frequent refrain when I was talking this over with some friends last night.

This is totally anecdotal, but I thought the “story” about the different methods of ranking medal-winning countries — by gold medals, by gold medals, etc. — was one of the most overworked journalistic angles of the Beijing Games.

It was clear that many Chinese wanted to privilege the winning of gold medals . . . and just coincidentally their whole Olympic program is geared toward winning the maximum number of gold medals. It was clear that many Americans wanted to rank by total medals . . . and just coincidentally the U.S. routinely comes out on top when counting total medals won.

My number is bigger than yours

There’s a business parallel here: think of all the companies — banks, car makers, telecoms, et cetera — that go to great lengths to be #1 in their industries. Ambition can be a great thing, and there can be great advantages to scale in certain businesses.

But often the simplistic focus on the top line of revenue masks problems underneath. There have been many years in which GM was the largest car maker in the world in terms of revenue, but far from the best in terms of profitability. And many mergers — such as the ill-starred combinations of Alcatel and Lucent, or Time Warner and AOL — are made with a hard focus on the top line . . . but a lot of wish-casting about the bottom line.

Per-unit measures

Getting back to the Olympic medals, this suggests a couple of obvious alternatives for how to look at the medal count. The U.S. is the richest country in the world, and China is the most populous, so at some level you expect them to perform well in medal counts.

If you look at the top several countries in the final official standings, you’ll note Australia — sixth in gold medals with 14, fifth in total medals with 46. But Australia has just 20 million people, which is one-third as many as Britain (19 golds, 47 medals), one-fifteenth as many as the U.S. (36, 110), and 1.5 percent as many as China (51, 100).

This site goes one better, sorting all of the medal-winning countries by population and GIP, resulting in these “winners” of the medal count:

• Population per gold medal: Jamaica.
• Population per total medals: Bahamas.
• GDP per gold medal: Zimbabwe.
• GDP per total medals: Zimbabwe.
• GDP/population per gold medal: Zimbabwe.
• GDP/population per total medals: Zimbabwe.

Hmm . . . I can’t recall lots of stories about how Zimbabwe was the big winner of these games. It might be worth noting that the country won four medals in total — and that they were all won by one swimmer, Kirsty Coventry.

I suggested to one of my friends that a even a rudimentary improvement on the “official” system would be to weight the medals using points, for instance gold = 3, silver = 2, bronze = 1. Using back-of-the-envelope math, this still put China ahead of the U.S., but by just three points.

The winner is?

After we had talked about this, my friend came across this site, which uses a weighted score along these lines (gold = 4, silver = 2, bronze = 1) and then divides by population. Using this system, the easy winner is . . . Jamaica.

Which, given Usain Bolt’s jaw-dropping performances in the sprints — not to mention the classical running of Veronica Campbell-Brown and the astonishing world record in the men’s 4 x 100 — seems about right.

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Also of interest:

• Yahoo: 36 facts about the Olympic medal count

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(Image of Paavo Nurmi — he of the nine gold medals — from Wikipedia.)