Wednesday, June 18, 2014

OK Go and Project Management

The power-pop band OK Go owes a lot of their success to their undeniable talent for making music videos that you have to see to believe. Have you seen the one where they dance on the treadmills? How about the one with the Rube Goldberg machine? What about the one with the dogs? You don’t just want to watch videos like that, you want to share them to everybody you know, which explains their huge success on YouTube.

Their latest viral hit will not only blow your mind, it may also change the way you work:

How will this help you run your business? If you look behind the scenes, OK Go videos are only possible because they redefine the fundamentals of project management. There’s a truism in project management that says you can have anything you want and it can be fast, cheap, and good… but you have to pick just two of those standards. In other words:
Your project can be done fast and well, but it will cost a lot.
Your project can be done fast and cheap, but it won’t be any good.
Your project can be done cheaply and well, but it will take time.
Unfortunately this hard truth comes up a lot because people generally want to have all three. They’re under a time crunch and need the work done yesterday (fast), they don’t have any money in the budget to pay for it (cheap), but it’s an important project and it needs to be of the highest quality (good)!

Good project management usually involves holding quality at a high standard while trying to control the time-line and the costs as much as possible. Of course, we’ve all seen good and cheap be sacrificed, but the one component that never seems to get ignored is fast. You would hope that good would be an absolute given, but people will give up quality (or pay through the nose) to have something done by tomorrow morning.

Which brings us back to OK Go.

The common thread that runs through most of the OK Go videos is that they seem to be willing to forgo fast in favor of making something that is both cheap and good. OK Go videos tend to look low-budget, but in a good way. They have a homemade appeal. But while they didn’t invest a lot of money (relative to the quality of the output), they did invest a lot of time in planning, preparing, practicing, and shooting the videos.

It’s worth noting that OK Go isn’t just performing a balancing act between the three criteria, they are pushing it to extremes. They’re not just giving up fast, they are investing in slow.

How many man-hours* do you think went into creating this?

Old Spice did something similar when they created a series of online commercials featuring Isaiah Mustafa, the extremely funny (and shirtless) star of their “I’m on a horse” TV spot. Instead of making something remarkable by sinking a lot of time into the project, they pushed time to the other extreme—the online spots were shot insanely fast. To give you an idea of how fast, the original TV spot was essentially done in one continuous take, but it took three solid days of shooting to get it just right. In contrast to this, Old Spice shot about 100 different online ads – each of which featured Mustafa responding to a real Tweet – and they were all written and shot in single day.

So, what did they have to give up to get that much work done so quickly? They willingly sacrificed quality. Or rather, they redefined what qualifies as “good.” To make the concept work, the ad agency (Weiden + Kennedy) wrote, shot, and posted on the fly. The client (Procter & Gamble) didn’t approve any of the online spots. They had to sign off in advance and (GASP!) trust their agency to deliver something that would support the brand. I’m going to guess that the writers didn’t do a lot of drafts for any given spot and that the director didn’t do a lot of takes. Quality (especially quality control) went out the window. But that made a new aesthetic. Yes, compared to the quality of the original “I’m on a Horse” spot, the online ads are lackluster. But taken for what they were, they were great. For a commercial personally directed at one single viewer… wow! When you watch them, you understand the constraints. You don’t expect a sequel to the elaborately staged “I’m on a Horse” ad. You just enjoy them for what they are: a funny execution of a remarkable idea.

There is a tendency to look at the fast/cheap/good model as an obstacle. The question becomes “What are we going to have to do without?” But it doesn’t have to be that way. I remember when Richard Wilbur, who was the Poet Laureate at the time, spoke at my high school. One of the things he said was that the structure of a poem (such as the meter and the rhyme scheme) was a challenge that poets set for themselves. It can be difficult to express your ideas within the rigid structure of a sonnet, but working within limitations is what makes the results potentially exceptional. Yes, it would be nice to have unlimited resources, but setting constraints for yourself can often lead to inspiration.

Budgets and schedules are the natural constraints in business. How can you creatively use those constraints to achieve something remarkable?

Further Listening/Reading/Deodorizing: Of the Blue Colour Of The Sky by OK Go, Collected Poems 1943-2004 by Richard Wilbur, and Old Spice Red Zone Body Wash

*If you want to try and calculate how many dog-hours were used, don’t forget to convert them at a rate of one dog-hour to seven man-hours.

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Sunday, April 20, 2014

Brand Positioning (With A Little Help From Star Wars)

Perceptual mapping is a technique that allows you to visualize the positioning of different brands in the market. Using perceptual maps, you can quickly compare yourself to competitors and make strategic decisions about whether or not you need to reposition your brand.

There are a several ways to create a perceptual map. I'd like to look at two extreme approaches -- the easy way and the hard way.

Method One: The Easy Way

Perceptual maps are based on how consumers view brand personalities, but this method doesn't require any new market research. Instead, it's simply a way to visualize and refine your current understanding of your market.

You can make a perceptual map for any competing set of products. For this example, I considered comparing different brands of cars or laundry detergent, but I thought it would be more fun to try something off the beaten path. With that in mind, here's how to make a perceptual map of famous cinematic anti-heroes.

Step One: Pick the leading brands in your market. You can include as many relevant competitors as you want, but to keep it simple (you'll see why when we look at the hard way below) I'm just picking six popular movie characters:
  • Han Solo (the original Star Wars trilogy)
  • Inigo Montoya (The Princess Bride)
  • John Bender (The Breakfast Club)
  • Lisbeth Salander (The Girl With the Dragon Tattoo)
  • Jason Bourne (The Bourne Identity/Supremacy/Ultimatum)
  • Rick Blaine (Casablanca)

Step Two: Pick the two most relevant criteria to compare the brands. I've chosen to look at how deadly and how quotable they are.

Step Three: Draw a simple matrix with one criterion mapped to the vertical axis and the other mapped to the horizontal axis. Position the brands accordingly.

Simply going through this exercise gives you a new perspective and forces you to answer questions you might not normally consider. The downside to the easy method is that there's no data to back any of it up. I'm sure some of you are probably questioning how I thought the characters are positioned. (Please feel free to tell me how wrong I am about Han Solo in the comments section.) To overcome this shortcoming, it makes sense to tackle perceptual maps by committee.

Here's one more map that compares songs about living in outer space in terms of how psychedelic and sad they are.

Wasn't that more fun than comparing detergent brands? I hope so, because we're about to take a look at...

Method Two: The Hard Way

Most of the times you see a perceptual map in a PowerPoint deck or report, it was generated the easy way. The hard way is built around data gathered through market research. The questionnaires are very difficult for people to complete for the following reasons:

1. There are an unusually high number of questions.
2. The questions are hard to answer.

Suppose we're looking at the auto industry. If you simply wanted to determine if customers prefer the Volkswagen Beetle to the Mini Coop, you could find the answer in two questions (rating each brand independently.)

If, on the other hand, you wanted to map perceptions on two different axis for multiple car brands, you have to ask people how similar every possible pairing of cars is. Let's revisit the anti-heroes example from above. We're only mapping 6 things, but the questionnaire would require 15 questions. Here's what it would look like to somebody filling out the survey:

Again, that's just for 6 positions to map. If you wanted to map 12 brands of soap, you'd need 66 questions. If you wanted to map 20 car brands, you'd have to ask 190 questions. This type of questioning takes a lot of time for respondents. The deeper they get into the survey, the less concerned they'll be with providing accurate answers.

These are also hard questions to answer because they're open ended and abstract. On a scale of 1 to 7, how similar are Han Solo and John Bender? If you were answering that, what criteria would you use? The respondents might want to say they're similar in that they both flaunt authority, but on the other hand... one of them is in high school and the other flies a space ship. As it gets more frustrating and confusing for people, they're likely to be less accurate.

If you do manage to incentivize people to invest the time to completely and accurately fill out your questionnaire, you still have to process your data. You'll need to run your results through statistical analysis software like SPSS. Once you have that, you can generate a data-driven perceptual map... but without any labels for the four quadrants!

Theses unlabeled maps will show you that Brand X and Brand Y are very similar or that Brand Z has no close competitors in the lower right quadrant, but they won't tell you what the axes mean. Does the vertical axis represent the perceived quality of the product? Durability? Easy of use? Environmental friendliness? It's up to you to determine that.

If you're going to be relying heavily on perceptual mapping to reposition a brand, this is the ideal method. For anything that's simply a leaping off point for other discussions, go the easy way.

Monday, March 7, 2011

Juggling Projects

A lot of us feel like we’re juggling at work (and at home) every day. Since the metaphor is so apt, I thought it might be interesting to see what tips we can pick up from actual jugglers. Don’t worry—you won’t have to know how to juggle to follow along.

Here’s how the work = juggling analogy really holds together. Your hands represent the number of resources you have. The balls represent the tasks you’re working on. If the number of tasks/balls is greater the available resources/hands, then you’re juggling.

As is the case with so many things, juggling with a team has advantages and disadvantages. Charlie Dancey put it very elegantly in his instructional book The Encyclopedia of Ball Juggling. In discussing passing patterns that are performed with two or more jugglers, he notes that a team “can do things with balls that the solo juggler couldn’t even attempt.”

However, he also points out the downside of adding more people:
The extra hands are an advantage, the extra brains are a problem.
If you’ve ever worked on a dysfunctional team, that probably resonated with you. However, there is a juggling tip that can easily be applied to project management: communication is the key to successful teamwork.

When you work alone, the coordination between the left hand and the right hand happens naturally. As Dancey says, “one brain controls all of the hands.” When you add extra hands and the brains that go with them, communication is essential. Before you can begin working (or juggling) everybody needs to start on the same page and agree on a workflow. (In juggling, it’s called a “passing pattern” and it determines when each person will throw a ball and to whom they will throw it.)

I hope that doesn’t sound like only one person on a team can serve as “the brain” while everybody else is reduced to simple working with their hands. None of this is meant to imply that a dictatorial management style is necessary. As Dancey points out, there is room for creativity, improvisation, and discovery within the confines of a pre-arranged pattern. But if anybody breaks outside of the agreed-upon guidelines, anarchy will ensue and—if you’ll pardon the expression—somebody is going to end up dropping the ball.

Further Reading: The Encyclopedia of Ball Juggling by Charlie Dancey

Wednesday, December 15, 2010

Great Moments in Negotiations Part 3: Don’t Let the Pigeon Negotiate

In previous posts, I wrote about negotiation scenes from The Dark Night (and how to negotiate like Batman) and The Hitchhiker’s Guide to the Galaxy (and the difference between a position and an interest.) Now I’d like to take a look at the negotiations techniques in Mo Willems' picture book Don’t Let the Pigeon Stay Up Late!

If you haven’t read it yet, the book opens with a man speaking directly to the reader. He explains that he has to step away to brush his teeth before bed and asks the reader to make sure the pigeon doesn’t stay up late. The rest of the story involves the pigeon trying to convince the reader to let him to stay up past his bedtime.

In short, the pigeon is a negotiator.

What Goes Wrong

The pigeon tries at least 13 distinct tactics* to win the reader over to his side. A lot of these tactics are the crudest forms of negotiation. He throws out irrelevant arguments (“It’s the middle of the day in China!”) He pleads. He uses emotional blackmail. He even, in his most honest moment, reverts to simply begging (“Pleeeeeaaaassseee!”)

The pigeon also makes no attempts to listen and understand the other party’s interests.** At one point, he tries to make a concession by offering that “I’ll go to bed early tomorrow night instead!” This demonstrates that he does not understand the other side’s real goal. Extra sleep tomorrow night cannot be exchanged for extra awake time tonight.

Some of his tricks are better than that, but whatever the quality of the pigeon’s tactics may be separately, taken together each individual tactic undermine the effectiveness of the others. The scatter-shot approach leaves the other party (the reader) with the impression that everything the pigeon says is insincere—he’ll say anything to get what he wants. You never believe that he’s explaining why he should be allowed to stay up late. He may as well be telling you that there is no reason he should get what he wants. In a successful negotiation, you should be able to articulate what you want, why you want it, and why the other party should give it to you.

What Goes Right

Although the pigeon's efforts to negotiate a later bedtime ultimately fail, he does get some things right. The pigeon never quite gets a grasp of the other side’s interests (a full night sleep tonight and every night), but he does demonstrate that he has learned what the other side values… and uses that knowledge to try to elicit an emotional response. For example, he says “Y’know, we never get to talk anymore. Tell me about your day…” In my favorite moment of the book, the pigeon slyly says “I hear there’s a good show about birds on TV tonight. Should be very educational.”

What parent wouldn’t value spending quality time with their child? What parent doesn’t value education? There is merit to working with the other party's values. If you know, for example, that the person on the other side of the negotiating table has a strongly developed sense of fairness, then your position can be couched in terms of fairness. Of course, this technique is more effective when it’s tied to the substance of your offer. In the pigeon’s case, his tactic is a purely emotional play with no relevance to reader’s mission of not letting him stay up late.

These two attempts to tap into the reader’s values also show off the pigeon’s best strategy. Instead of begging to stay up late, he attempts to guide the reader to his position. When he mentions that there’s an educational program on TV tonight, he wants the reader to be the one who suggests that he should stay up late. When done properly, this is an effective and ideal strategy.

It All Comes Down To BATNA In The End

As the reader of Don’t Let the Pigeon Stay Up Late!, you assume a hard-line position. You concede nothing while the pigeon scrambles in vain to make a dent in your armor. How are you able to do this? Easy—you know you’ve got the better BATNA.*** Whether he likes it or not, the pigeon (“Yawn!”) is going to bed soon.

Further Reading: Don’t Let the Pigeon Stay Up Late! by Mo Willems

*Some of his pitches can be broken down into two parts, so you could argue that the number is even higher.
** In his defense, he’s physically incapable of listening to the other side since he’s a character in a book. The reader can talk to him as much as they like, but he can’t hear or respond.
***BATNA stands for “Best Alternative to a Negotiated Agreement.”

Wednesday, November 17, 2010

Does Your Strategy Pass The Marshmallow Test?

When he was a psychology professor at Stanford University, Walter Mischel developed the marshmallow experiment. If you don’t remember studying Mischel’s famous behavioral experiment in your undergraduate Intro to Psychology class, you can actually duplicate his work at home:
You’ll Need:
A 4- to 6-year-old child
Two marshmallows

The Experiment:
Give the child one of the marshmallows. Tell them that they may eat the marshmallow right now if they want to, but if they wait 15 minutes before eating it, you will give them a second marshmallow.

If you were to perform this experiment with enough subjects, you would find that only about one-third of the children are disciplined enough to wait for the second marshmallow. According to Mischel’s longitudinal studies, the children who waited for the second marshmallow tended to be more successful when they grew up. (They had better test scores, were more likely to attend college, etc.)
This was one of my favorite psych experiments back in college, largely because it involved giving sugar to children. Over the years, I’ve come to think of the marshmallow test as an easy-to-use business tool.

The experiment was designed for small children, so you would think that adults would have developed the logical reasoning skills and the patience to perform better on the test than the typical preschool kid. And yet, the world is full of ample evidence to the contrary: Imagine the same experiment, but instead of marshmallows, the subject is asked to forgo profits in this quarter in exchange for sustainable growth several years from now.

See what I mean?

Every time a business sacrifices the better payoff of a long-term strategy in exchange for the immediate gratification of a short-term strategy, they are failing the marshmallow test.

Monday, October 25, 2010

Scary Business Plans

In order to get into the Halloween spirit, I’d like to search for the business tips lurking in the shadows of some of my favorite spooky movies.

The Nightmare Before Christmas

In this animated cult-classic, Jack Skellington decides he’s tired of running Halloween and conducts a hostile takeover of Christmas. Jack is armed with only enthusiasm and best intentions, so his plans lead to nothing but trouble. The only lessons here are learned from Jack’s mistakes:
  1. Always Do Market Research: You’ll want to know that children don’t like scary toys for Christmas BEFORE you manufacture and distribute all of those shrunken heads.
  2. Be Aware of Your Core Competencies: It can be tempting to start something new for the adventure of it all, but if you don’t have the basic skill set required, then you’re doomed to fail. Stick to what you’re best suited for. You’re not “Sandy Claws” -- you’re the Pumpkin King!
  3. Retain Key Staff: If you do want to take over a business, keep the old management team on for a while. They’ll be able to provide a valuable knowledge transfer. You’ll be glad that you have Santa Claus working for you to distribute toys instead of having him hidden away in a sack.

    Sweeney Todd

    Sweeney Todd is a case study in vertical integration. Sweeney Todd (of  Sweeney Todd’s Tonsorial Parlor) and Mrs. Lovett (of Mrs. Lovett’s Meat Pies) join forces in a common venture. Specifically, he kills some of his customers and then she bakes them into meat pies.

    After you’re done gagging, consider what this does to their supply chain. First, look at the supply chain of Ms. Mooney’s Pie Shop, one of Mrs. Lovett’s competitors:

    The product moves down the supply chain towards the customers, while the money moves in the opposite direction towards the suppliers. In the middle of the chain, Mrs. Mooney only keeps of portion of the revenue and passes the rest upstream to her suppliers.

    Now look at Mrs. Lovett’s supply chain:

    Not only is she sharing the profits with her supplier, but she also has money coming in from both ends of the supply chains! The customers that Sweeney kills still pay for their haircuts, which is a lot of money when you remember that a Sweeney Todd haircut costs exactly the amount of money they have in their wallets. (And, since they won’t be needing their wallets anymore as they take a trip to the meat grinder, Sweeney and Lovett will keep the wallet, too.)

    Can this model be duplicated for a business that doesn’t involve cannibalism? To a point, but it’s tricky. A more modern/legal version of this would be a hub for user-generated content where one set of end users pay for the content and another set of users pays for the privilege of having their content distributed.

    The Rocky Horror Picture Show

    At the end of The Rocky Horror Picture Show, Riff Raff successfully stages a coup to seize control from Dr. Frank-N-Furter. But how -- or why -- he does it is a mystery. “I’m your new commander,” he sings. But on whose authority? Apparently somebody deemed Dr. Frank-N-Furter unfit for leadership because his “lifestyle’s too extreme.” I can see the value of having a moral’s clause—and killing Eddie (Meatloaf) and serving him for dinner (also Meatloaf) is certainly extreme. But when you replace a guy like that, why would you choose Riff Raff as the successor? That guy is into some seriously inappropriate behavior with his sister.

    Odder still—why would Riff want to take over? He reports that Frank’s “mission is a failure,” but that mission is ill defined at best. What exactly is their goal? As far as I can tell, the mission consists of nothing more than traveling to a foreign planet (Earth) and seducing the aliens who live there (Susan Sarandon and Barry Bostwick.) I don’t see any real way to profit from that.

    The only take away point I can find in Rocky Horror is that the best way to get your boss’s job is with a ray-gun. I can neither recommend nor condone that strategy.

    Little Shop of Horrors

    At last, Little Shop of Horrors provides us with a practical lesson that can be applied to legitimate business ventures! At the opening of the movie, Mushnik’s Flower Shop is a “God- and customer-forsaken place.” There isn’t a lot of demand for flowers in the shop’s Skid Row neighborhood. However, that all changes when Seymour Krelborn comes up with the plan to attract customers by placing the Audrey II – a “strange and interesting plant” – in the window. Before you know it, Mushnik’s is raking in the bucks hand over fist.

    The Audrey II doesn’t directly generate any money for Mushnik’s Flower Shop. All the revenue is coming from the sale of normal, non-alien plants. At the same time, Audrey II consumes a lot of resources.* Seymour puts a lot of blood, sweat, and tears into raising Audrey II (but mostly blood.)

    And yet without the Audrey II, Mushnik’s wouldn’t make any sales. This has many real-world parallels. Most marketing departments are like the Audrey II—they generates no revenue on their own, but if you don’t invest in them then your sales will wilt.

    Of course, you should learn something else from Seymour and avoid duplicating his business model exactly since his marketing gimick has a mind and a business plan of its own: Take over the world! Mwaa haa haa!

    Further Viewing: The Nightmare Before Christmas, Sweeney Todd, The Rocky Horror Picture Show, and Little Shop of Horrors

    * …and dentists.

    Monday, August 23, 2010

    Great Moments in Negotiations Part 2: The Hitchhiker’s Guide to Negotiations

    Negotiations are inherently dramatic, which is one of the reasons that they often pop up in movies and TV shows. In a previous post, I took a look at a scene from The Dark Knight to see how knowing your BATNA can help you to negotiate like Batman. Today I’d like to examine a great negotiation scene from the beginning of Douglas Adams’ The Hitchhiker’s Guide to the Galaxy that sheds some light on pre-settlement settlements, the principal-agency problem, and the gap between positions and interests. If that sounds overwhelming, Don’t Panic—there are some good jokes, too. 

    The Parties

    Mr. Prosser: Mr. Prosser’s works for the local council. He wants to knock down Arthur Dent’s house with a bulldozer to make way for a new bypass.
    Arthur Dent: Arthur has only just learned of the plan to knock down his house. He wants to prevent this from happening and, lacking any other form of recourse, has lain down in front of the bulldozer.
    Ford Prefect: Arthur’s friend Ford has no personal stake in either building the bypass or saving Arthur’s house. He only wants to take his friend to the village pub. He is negotiating on behalf of his “client” Arthur.

    The Negotiation

    Mr. Prosser and Arthur Dent have been locked in a standstill all morning. Prosser has tried to convince Arthur to move and allow the demolition to continue by presenting his position through a series of what he considers to be logical arguments, but Arthur has refused to budge. Upon learning of the situation, Ford inserts himself into the negotiation. Ford’s discussion with Mr. Prosser begins with the following exchange:
    “Has Mr. Dent come to his senses yet?”
    “Can we for the moment,” called Ford, “assume that he hasn’t?”
    “Well?” sighed Mr. Prosser.
    “And can we also assume,” said Ford, “that he’s going to be staying here all day?
    “So all your men are going to be standing around all day doing nothing?”
    “Could be, could be…”
    Having clearly defined the standstill, Ford finds common ground between the two parties: Everybody can agree that nothing is going to change. Arthur won’t move and Prosser won’t retreat. As Ford puts it:
    “Well, if you’re resigned to doing that anyway, you don’t actually need him to lie here all the time do you? …So if you would just take it as read that he’s actually here, then he and I could slip off down to the pub for half an hour. How does that sound?”
    In short order, Ford proceeds to convince Mr. Prosser to take Arthur’s place in front of the bulldozer. In exchange for this, Ford offers to fill in for Mr. Prosser if he needs to take a break later.

    What Went Right

    Ford was able to negotiate a pre-settlement settlement (as coined by James J. Gillespie and Max H. Bazerman.) A pre-settlement settlement temporarily removes the pressure of having to come to a final agreement. For example, when a union and a company agree to extend the strike deadline so that good faith negotiations can continue, they are entering into a pre-settlement settlement.

    A pre-settlement settlement often has the benefit of changing the tone of a negotiation since everybody needs to agree that they are progressing towards a negotiated agreement (even if the details still need to be worked out.)

    What Went Wrong

    Even if you aren’t familiar with any of the incarnations* of The Hitchhiker’s Guide to the Galaxy, you probably already figured out that Prosser knocked down Arthur Dent’s house a few minutes after Arthur and Ford went to the pub. Part of the problem was that a pre-settlement settlement depends on the good faith of all parties. Once the house was demolished, Prosser never needed to have any dealings with Arthur ever again, so preserving a trustworthy reputation was unimportant. There was nothing to keep Prosser in front of the bulldozer.

    There was also another issue in play. Arthur had a principal-agency problem, which is what happens when somebody who is supposed to be acting on your behalf has a different set of interests than your own.** Ford (acting as Arthur's negotiator) knew perfectly well that Prosser was going to knock down Arthur's house... he just didn't care. The negotiation was essentially a show put on for the benefit of Arthur. Ford only cared about his own goal of getting Arthur to the pub as quickly as possible so they could both drink large quantities of beer.

    Under all normal circumstances, you never want an agent who puts their self-interest above your interests. However, in this case, it actually worked out well for Arthur. What Arthur didn’t know was that it mattered “not at all” what happened to his house since the entire planet Earth was about to be vaporized out of existence. Furthermore, going to the pub with Ford allowed Arthur to become one of only two human beings to escape the destruction of the planet.

    This entirely unrealistic and unlikely scenario does highlight a very real and common situation. There is often a gap between our stated positions (such as not wanting your house to be bulldozed) and our real underlying interests (such as needing a place to live.) As absurd as the scenario was, Ford served his client’s best interests by looking past the position Arthur was taking in the stalled negotiation with Prosser. Ideally, an agent and a principle will work together to identify the real interests before the negotiation starts.***

    Further Reading: The Ultimate Hitchhiker’s Guide to the Galaxy, by Douglas Adams

    * The Hitchhiker’s Guide to the Galaxy has many incarnations, including a radio show, a book, a television show, a video game, and a movie.
    ** Here's a more likely example of the principal-agency problem. Suppose you're suing somebody and your lawyer is working on commission. This theoretically gives your lawyer an incentive to get you the biggest settlement possible. The more you make, the more they make, right? Perhaps for a while, but after a certain point, your lawyer's profits may go down as they sink more time into your case. Your interest is in maximizing revenue, but your agent's interest is in maximizing profit. Your interests are not aligned.
    *** For situations where there isn’t time for strategizing, everybody should at least know where their towel is.

    Saturday, July 31, 2010

    MAD Market Research

    According to the masthead, the artists and writers for MAD Magazine are collectively known as “The Usual Gang of Idiots.” In the interest of full disclosure, I am obliged to tell you that I am one of MAD’s writers. As a member of that gang, I can personally verify that all of the members are indeed complete idiots.*

    But even idiots can be smart sometimes. For example, back in 1959, MAD Magazine ran a classic article that specifically dealt with market research. The article, written by Sy Reit and featuring art by Bob Clarke, was called “America’s Dream Car.” The premise was that people were dissatisfied with the current state of car design and therefore a little market research would produce some innovative new vehicles that everybody would love. According to the introduction to the article,
    MAD took a nationwide poll, asking people what changes they wanted—and here are the results of that poll. Using a composite model of typical American cars, we’ve indicated below what the public wants included in America’s Dream Car.
    Here’s their picture of the average American car (remember, it was 1959.)

    The boxes with arrows contain 22 suggestions that they gathered through their market research. Obviously, they’re all made up by writer Sy Reit, but many of the requested changes seem like things that could have plausibly been said by somebody completing a survey, including:
    • Increase head and leg room.
    • Shorten over-all hood length to improve driver’s visibility.
    • Simplify dashboard instruments.
    • Eliminate excessive and gaudy chrome.
    • Re-design body shell to raise doors for better clearance at curbs.
    • Re-design and reduce size of tail fins.
    That sounds like sensible feedback, right? Any sane marketing department would tell the design division to make those changes happen ASAP.

    The article goes on to say that after conducting their market research,
    …We took all of those ideas, sat down at the drafting board, and went to work. And on the following page you’ll find the results of our labors. Yes! Here at last – based on your suggestions – is America’s Dream Car!
    Here’s what they came up with:

    That one image is the perfect visual representation of the dangers of design by committee.

    There’s no denying that this "new" design takes all of the feedback into account: There’s more headroom, the hood is shorter, the dashboard isn’t cluttered with too many instruments, the tacky chrome and dated tail fins are gone, and the doors won’t bang into the curb. But nobody in their right mind would say that the Model T is an improvement on, say, the 57 Cadillac. You’d have to be a real idiot to think that.

    The next time you see market research being misinterpreted, misapplied, or simply being accepted as gospel without any further investigation – think of “America’s Dream Car” and smile.

    Further Reading: Mad Magazine

    *Except for Tom Richmond. And I’m not just saying that because he’s a body builder who could easily beat me up with his left hand while his right hand goes on drawing celebrity caricatures.

    Sunday, July 18, 2010

    Muppets and Manufacturing

    Jim Henson is generally considered to be a genius, but manufacturing is not frequently sited as one of his core competencies. Before we explore what Henson and his colleagues knew about production lines, let’s take a quick quiz to test your Muppet knowledge. Name the following four characters:

    You probably had no trouble identifying Kermit, Miss Piggy, and Fozzie… but could you name the fourth one? I didn’t think so, but you have a good excuse: That Muppet isn’t famous and it doesn't have a proper name. It’s one of the Whatnots -- a series of customized Muppets that are currently on sale at the toy store FAO Schwarz. Customers chose between 3 different body types, 13 sets of eyes, 16 noses, 23 hair options, and 18 costumes. Once you’ve made your choices, employees will build your unique puppet (there are 258,336 possible variations) while you wait.

    When the Whatnots debuted at FAO in late 2008, they had a lot going against them. At $130 a puppet, the price point was expensive. The puppets would look Muppetesque, but they wouldn’t look like Kermit or Gonzo or any of the other featured characters. And at the time, the Muppet brand had fallen far from its high point in the early 80s. Despite all of that, the Whatnots were a big hit. Jennifer 8. Lee reported in the New York Times that, “In a retail environment that has been disappointingly moribund this year, the decades-old Muppets may be one of the brightest points this holiday season.” FAO quickly ran out of stock of two of the three body types. The Whatnots were originally also available online, but they had to temporarily disable the online store because they couldn’t keep up with the demand.

    Yes, the customized Whatnots are a great case study. It’s a story full of successes (demand far exceeds supply) and failures (demand far exceeds supply), but the lesson actually goes back much further to the original Whatnots. The design-your-own-puppet concept was inspired by the many extras that were featured on The Muppet Show.

    Kermit may sound like Ernie, but he sure as heck doesn't look like Ernie. Those puppets were custom designs, and it took a lot of time and money to develop them. In any given episode of The Muppet Show, there would be a huge variety of parts to cast. It would have been prohibitively expensive to try to build all of those puppets by hand each week, so instead they built a series of generic puppets to act as extras and bit players. They could radically change the appearance of the puppets by sticking on a new nose or new wig. Change the eyes and a sleepy accountant turns into an evil spy! Add some sharp teeth and now it’s a monster!

    And that’s what Jim Henson and the Muppet designers knew about manufacturing: modular design saves money and allows you to meet a demanding production schedule. That’s true whether you’re looking at a pair of eyes that can be attached to any puppet head or if you’re looking at a chassis that can be used for multiple vehicles.

    Further Playing: The Muppet Whatnot Workshop

    Tuesday, July 6, 2010

    Influencing Consumer Behavior: Thoughts on Training Your Customers

    Donald Norman’s book The Design of Everyday Things is an entertaining and enlightening guide to making products more usable. The book is full of anecdotes and case studies about things that ought to be easy to use, but aren’t. For example, Norman notably opens the book with a closer look at doors. He confesses that he sometimes pulls when he should push (or vice versa.) I’ve often done the same thing myself. So have you. Chances are, you probably felt stupid that you couldn’t open a door right on the first try. You may have even hoped that nobody saw you looking like an idiot. But, as Norman points out, the error isn’t yours: It’s a design flaw. A simple machine like a door shouldn’t allow for users to get it wrong. The design should influence our actions in such a way that we always operate the door correctly. It should not come down to trial and error.

    From doors, Norman moves on to more complex examples of “everyday things,” but the principles of usability stay the same even as the engineering under the surface gets more complex. The consequences of misusing the products can also rise along with the complexity: When you pull a door you should push, the negative outcome is that you feel embarrassed. What happens when bad design causes somebody to misuses the control panel at a nuclear power plant?

    I highly recommend The Design of Everyday Things based on its obvious merits. It sets out to explain user-centric product design, and it does so in text that is informative and accessible. It may require the specialized skills of an engineer to make a watch or a computer or a telephone function, but any thoughtful manager ought to be able to tell what makes those products easy to use. Usability has less to do with the physical sciences than it does with psychology.

    I would argue, however, that The Design of Everyday Things can also help you refine your thinking about issues that go far beyond the stated scope of the book. I hope to touch upon some of these other issues in future posts (including a lesson that can be applied to public relations problems and a look at Norman’s observations on what causes people to make bad decisions.) For now, let’s take a quick look at the concept of affordances.

    Affordances and Metaphorical Doors

    Norman introduces the term "affordances" with a quick story about British Rail (now known as National Rail.) It seems they were having a problem with the shelters set up by the train tracks. When the sides of the shelters were made from glass, vandals would break the glass. When they replaced the glass with wood panels, the vandals would write on the wood. As Norman explains it, the materials not only allow, but also suggest, different uses. Glass affords breaking. Wood affords graffiti.

    Affordances can also have positive and intentional outcomes. To revisit the issue of doors that you pull when they were meant to be pushed, that problem can be solved by affordances. If the door has a push bar on it, then the user can only push on it. The hardware affords pushing.

    In industrial design, affordances are an important way a designer can influence the user’s behavior. This concept can be a useful touchstone in areas that have nothing to do with user-centric design. Ever since I first read The Design of Everyday Things (back in the mid 90s), I’ve been looking at the world in terms of affordances. Customer behavior (good and bad) doesn’t happen in a vacuum. Instead, it is a result of the decisions companies make.

    British Rail obviously didn’t produce an instruction manual for their passengers that explained the best way to vandalize their shelters. The affordances of the material did that for them. Similarly, businesses are constantly in the process of silently but persuasively training their customers to behave in certain ways. The same affordances that affect designers and engineers also come into play every time a company makes a decision that is in any way observable by the consumer. For example, consider the trend of holiday sales that happen early in the morning on the day after Thanksgiving. These sales are the result of a series of choices the retailer makes about pricing (“20% Off!”), the merchandising mix (this many units of this particular model TV), and marketing communications (it’s a “Door Buster Sale!”) Design and engineering never enter the picture, but affordances do. That's why “Door Buster Sales” can end in actually busted doors. The retailers are unintentionally training their customers to push, shove, and even trample their fellow customers. Because retailers fail to consider all of the affordances created by their plans, they influence their customers in undesirable – and sometimes tragic – ways.

    Norman asks you to take a closer look at the visible properties of products, but I think once you do, you’ll also start to notice the non-tangible aspects of your interactions with your customers, too.

    Further Reading: The Design of Everyday Things by Donald A. Norman

    Monday, June 7, 2010

    Toy Theory: An Introduction

    I confess that I was mildly disappointed when I first learned that game theory had nothing to do with Othello, Trivial Pursuit, or Risk. Instead, game theory is concerned with “games” like Dictator, Ultimatum, and the famous Prisoner’s Dilemma. These memorable scenarios are used as models for solving real-world problems.

    Game theory is a study in strategy—how we play against other players with the end goal of winning.* Game theory is a wonderful tool for determining optimal strategies, but most people don’t have time for strategy in their work. Instead, their days are filled with the simple goal of getting the job done on time and on budget: Finish the presentation. Write the proposal. Manufacture the product. Meet the sales quota.

    If game theory is for strategy, perhaps we can develop a similar tool to help with daily operations: Let’s call it “toy theory.” I chose this approach because games are about beating the other players, but toys are about playing. Game theory is about competitive activities, while toy theory is about creative activities.**

    Using the toy metaphor, here are five examples of toy theory that can be learned from your favorite playthings.

    1. The Wind-Up Theory: One broken gear can stop the whole thing from running. The corollary to manufacturing should be self-evident.

    2. The Construction Set Theory: When starting a new venture, look at your assets and core competencies to see what you can make out of them. If you have a set of traditional Lego blocks, your best option may be to construct a building. There is a reason, after all, why the standard pieces are called “bricks.” Suppose instead you have a set of Zoob, which is another construction toy. Zoob pieces come together to form joints and they have parts that look like eyes and claws. Your best bet may be to build some sort of animal, bug, or alien. The properties of Lego bricks are suited towards architecture, whereas the Zoob pieces lend themselves towards organic creatures. Yes, you can use pretty much any construction set to build anything you dream of, but different sets lend themselves to different types of play. As they say, play to your strengths.

    One construction toy is suited for castles, the other is suited for building dragons. It's natural for builders to pick projects based on the assets available to them.

    3. The Woody’s Roundup Theory: When collecting assets, the value of two assets is simply equal to the sum of their separate values—unless you can bundle together assets that will complement each other. This will make the merged set of assets worth more to an outside investor. In toy terms:
    The Value of (Woody + Buzz) = (Value of Woody) + (Value of Buzz) 
    The Value of (Woody + Jessie + Bullseye + Stinky Pete) > (Value of Woody) + (Value of Jessie) + (Value of Bullseye) + (Value of Stinky Pete). 
    This is true whether you are expanding your product portfolio through R&D or whether you are expanding the scope of the entire company of companies through M&A.

    4. The Action Figure Theory: You can often achieve better results by collaborating with other partners (even though those partners can sometimes be your competitors when you shift from creative play to competitive gamesmanship.) You can play both Luke and Darth Vader and have a good time, but there’s more unexpected discovery when you have a friend play half the parts.

    5. The AA Battery Theory: If accountants played with Tickle Me Elmo, they would point out that keeping the toy supplied with batteries adds to the total cost of ownership.

    Finally, a meta-lesson concerning the interaction of game theory and toy theory: Remember the game Mouse Trap? The goal of the game was to eliminate the other players—the last player standing wins the game. But you didn’t play it that way, did you? Mouse Trap was both a game and a toy. Most people ignore the game aspect of Mouse Trap and instead focused on playing with the really cool toy. It was fun to set up and it was fun to set the chain reaction in motion. The game component of Mouse Trap couldn’t compete with the toy component of Mouse Trap.

    Applying this observation back to business, daily operations aren’t necessarily fun, but they are necessary. How often does the need to deal with toy theory distract from the task of focusing on game theory?

    Further Playing: Wind Up Gear Box, Lego, Zoob, Toy Story 2, Star Wars Action Figures, Tickle Me Elmo TMX Top Secret, Mouse Trap

    * Or at least maintaining a sustainable competitive advantage. Attempting a complete victory that totally shuts down all other players is sometimes known as abuse of monopoly powers.

    ** “Creative activities” are not limited to artistic pursuits. Any work that results in the creation of something new can be considered creative. Manufacturing a new unit of a product is creative. Making a balance sheet is creative. In the grand sense, any activity that creates value is also creative.

    Monday, May 24, 2010

    A Strategy You Can Hum

    In his musical Into the Woods, composer and lyricist Stephen Sondheim takes the characters of several classic fairy tales (including Little Red Riding Hood, Rapunzel, Cinderella, and Jack and the Beanstalk) and twists them together into a single narrative. The source material may be “kid’s stuff,” but Sondheim and book writer James Lapine transform the simple stories into a witty, moving, and morally complex piece of theater.

    In the first act, all of the story lines reach their familiar conclusions: Little Red Riding Hood and her Grandma escape the belly of the wolf, Rapunzel and Cinderella both win a Prince, and poor Jack comes down from the beanstalk with a hen that lays the proverbial golden egg. And they all, as the saying goes, lived happily ever after.

    At least until the second act.

    In the world of Into the Woods, the moves we make in act one always have repercussions in act two. And, as is often the case, the reactions to our actions come in unpleasant forms. I won’t spoil anything for those of you who haven’t seen it, but not everybody makes it out of the woods alive. (Far from it.)

    Here’s where strategy comes into it. In the original fairy tale, Jack escapes down the beanstalk and kills the Giant. In the second act of Into the Woods, the Giant’s Wife comes down to earth to seek revenge on Jack. On her hunt for the boy who killed her husband, she leaves a trail of bodies in her path. The surviving “heroes” decide they will have to kill the Giant’s Wife to restore peace to the kingdom. In the moments before they do battle, the younger characters (Jack and Little Red Riding Hood) are angry, frightened, and confused. Two of the adults (Cinderella and the Baker) sing them a song called “No One is Alone.”

    It is a beautiful song and it’s hard to not find comfort in the words every time you hear Cinderella and the Baker sing lines like this:
    No one is alone. Truly.
    No one is alone.
    However, that’s not what the song is about at all. The words are not simply meant to comfort, they are meant as a warning. As the song builds to a climax, the adults sing:
    Just remember:
    Someone is on your side…
    And the children join them hopefully singing:
    Our side, Our side…
    But just as soon as the song lifts, the adults soberly cut the anthem-like music short by singing:
    Someone else is not.
    The same glimmer of entitlement is again tempered with a warning when they sing:
    While we're seeing our side
    Our side!
                    Our side!
    Maybe we forgot: they are not alone.
    No one is alone.
    The warning is more complex than simply noting that you are competing against other players. Sondheim goes beyond pointing out that actions can inspire retaliations. He’s also giving a lesson in what economists call negative externalities. The exchanges between two parties can cause pain and suffering to a third party who wasn’t involved in (or even aware of) the initial interaction. As the song says:
    Everybody makes
    One another's terrible mistakes.
    It’s not just that our opponents have interests that are in conflict with our own. Rather, it’s that our ill-considered actions can cause our opponents to take actions that we do not want them to.

    I submit to you that this is the essence of strategy. It’s certainly the heart of game theory—The actions of one player can change the nature of the game for all of the players. It’s such a simple point, it feels silly to even bother saying it… and yet, there is no shortage of examples of short-sighted strategies that are executed by corporations and governments alike.

    Why do people fall into this trap? How can adults fail to see that their actions will have consequences? I think listening to “No One Is Alone” will shine a little light on the mystery. We know that there is an enemy out there in the woods, but the melody — the beautiful melody — lulls us back into believing what we want to believe. The melody says we are not alone, we have each other, we are on the right side… And so we willfully fool ourselves into ignoring the wisdom of the lyrics. And so, too often, emotional considerations overwhelm logical strategy.

    Further Viewing: Into the Woods, Music and Lyrics by Stephen Sondheim, Written and Directed by James Lapine

    Monday, May 10, 2010

    Great Moments in Negotiations: BATNA Man

    There’s a great lesson in how to prepare for a negotiation about an hour into The Dark Knight. Coleman Reese (played by Joshua Harto) is an M&A lawyer working for Wayne Enterprises. In the course of conducting due diligence, Reese has successfully deduced that Bruce Wayne is Batman just by reviewing the financial records. Armed with this information, he decides to blackmail Wayne.

    In a meeting with Wayne Enterprises CEO Lucius Fox (Morgan Freeman), Reese gets right to the point. He tells Fox what he knows, shows that he has proof, and without giving Fox time to respond, he states his terms:
    Coleman Reese: I want ten million dollars a year for the rest of my life.
    Let’s look at Reese’s negotiation skills. He did a lot of things right. He laid his cards on the table. He did his research, which means that the facts are on his side. Given the nature of what he knows and the depths of their pockets, he’s probably making a reasonable request. He made sure that he was talking to somebody in a position to negotiate. Best of all, he firmly anchored the discussion by clearly stating his terms—ten million dollars a year.

    Unfortunately for Reese, he made one mistake. He didn’t consider his BATNA (Best Alternative to a Negotiated Agreement.) In other words, he never asked himself what would happen if he couldn’t come to an agreement with Fox. Without blinking, Fox explains what Reese’s BATNA is:
    Lucius Fox: Let me get this straight. You think that your client -- one of the wealthiest, most powerful men in the world – is secretly a vigilante who spends his nights beating criminals to a pulp with his bare hands… and your plan is to blackmail this person? Good luck.
    Fox has the better BATNA, so Fox wins. In addition to having a better hand, Fox also has excellent negotiation skills. Note that he concedes nothing. (Making concessions may be a legitimate tactic in friendly negotiations, but since they're discussing blackmail, Fox is wise to not validate any of Reese's accusations.) More importantly, he restates Reese’s position. In doing so, he reframes it in such a way to show that Reese has no leverage at all. Reframing is a good strategy for two reasons. First, reframing the other side’s position makes them agree to your version of their facts. (This is what happens in the Reese-Fox negotiation.) Second, it can also add clarity and understanding to a discussion, which can help bring both parties closer to a negotiated agreement.

    Further Viewing: The Dark Knight, Screenplay by Jonathan Nolan and Christopher Nolan

    Sunday, May 2, 2010

    The Best Drawn Supply Chain You've Ever Seen

    You may think you already know how to read a comic book, and you’re probably right. It may have been a long time since you’ve done it, but you’d probably all be able to pick up a copy of Spider-Man and make it through the story. You’re not illiterate, after all.

    That didn’t stop comic writer and artist Scott McCloud from publishing Understanding Comics, a non-fiction book that is a self-described “examination of the art-form.” With fierce intelligence and elegant clarity, he explores such heady subjects as the abstract nature of words and pictures and the nature of perception. McCloud’s deconstruction of the reading process delved so deeply into how a reader interacts with what they’re reading (especially when words and pictures blend together to convey a message) that Understanding Comics became more than a comic book about other comic books -- It became a must read book for interactive designers. McCloud was very specifically talking about comics, but his lessons and insights were easily applied to the design of websites, too. With that in mind, perhaps it’s not surprising that McCloud’s next book, Reinventing Comics, tried to tackle the subject of the internet head on.

    Here’s where it gets interesting.

    While Understanding Comics was an unqualified success, Reinventing Comics was, well… not an unqualified success. Although it directly addresses the business side of the comic book industry, most of McCloud’s visions of the future failed to resonate with either artists or business leaders.

    Still, Reinventing Comics remains noteworthy for featuring The Best Drawn Supply Chain You’ve Ever Seen. Take a look at how McCloud maps the comic book industry:

    The first thing that you’ll notice is that you probably can’t draw like that. When drawing supply chains, most people don’t bother with more than a fast doodle with boxes representing the different parts of the industry and a little stick figure representing the end customer. There’s no reason that they should spend any more time than that (and besides, most MBA types lack the talent.)

    Forget how well it’s rendered for a moment and take a look at how much information McCloud conveys as the product travels from the artist (in the upper right hand corner) down to the consumer (in the lower left hand corner.) Note how he isn’t just mapping the flow of the product downstream, he’s also charting the flow of the revenue upstream.

    What you can’t tell from the single panel shown above is that this isn’t the whole supply chain. What makes it truly great is that McCloud isn’t simply taking a snapshot of how the industry looks in current form. Instead, he takes several pages to carefully show how the chain evolves. At the beginning of his discussion, he shows the industry in the simplest possible form a business can take -- one person selling one product to one consumer:

    True, the industry in question was never that simple, but it’s still educational to look at it as if it did evolve that way. By starting with the most basic of transactions, McCloud is able to show you what happens when the industry grows one step at a time. You see what value each new link in the chain creates (and what is sometimes lost in the process as those links are introduced.) Along the way, McCloud never loses sight of the purpose of the whole supply chain: connecting the creator and the consumer.

    Further Reading: Reinventing Comics, by Scott McCloud

    Wednesday, April 28, 2010

    The Marketing Wisdom of Fred and George Weasley

    In the opening chapters of Harry Potter and the Half-Blood Prince, J.K. Rowling creates a picture of a floundering wizard economy. Businesses are shutting down – either because their owners have been killed or because customers are afraid to shop anymore. The only retailer that seems to be thriving in the down economy is Weasleys’ Wizarding Wheezes, a joke shop that opened only a few months earlier by two Hogwarts drop outs.

    Why is their store packed with excited consumers while neighboring stores are boarding up their windows? Based on Fred and George Weasleys' successful strategy, here are seven tips for other start-up B2W (Business to Wizard) companies.

    1. Get An Angel Investor

    Harry Potter gave Fred and George Weasley 1,000 Galleons worth of seed money (that’s just about $10,000.) And you get the impression that Harry doesn’t expect any sort of return on his investment... or even want any repayment on the loan. To Harry, the 1,000 Galleons are a reminder of a tragic encounter, so he wants nothing to do with it. I suspect it is unlikely that you will ever find an investor who is as equally well capitalized and emotionally tormented as Harry Potter, so you might want to have a Plan B for raising capital.

    2. Have the Entrepreneurial Spirit

    It takes more than a solid business plan to get a start-up business on its feet. It takes an intense dedication. The hours will be long, the sacrifices will be great, and the rewards may be slow to come.

    Fred and George seem to have the focus required for the job: They’ve given up the comforts of home so that they can live above their own shop. They may have alternate motives for moving out of their parents' house… but on the whole it sounds like they’ve got the entrepreneurial spirit.

    3. Make A Long-Term Business Plan

    The Weasleys clearly have a five-year business plan. They launched their company in phases: First, they began as a successful mail order company so they could start generating revenue while minimizing their overhead. At the same time, they continued to develop and test new products. That first phase of their plan allowed them to earn enough money to acquire a retail space and to open it with an appealingly broad range of products.

    4. Listen to the Market

    Through their R&D efforts, the twins developed Shield Hats—headgear that can protect the wearer from jinxes. A product they developed as just another one of their gag items ended up having very pragmatic applications, and thanks to their group sales to the Ministry (a government contract!), it became one of their biggest sources of revenue.

    Because they were ready to respond to this new demand, they quickly expanded their offerings to include Shield Gloves and Shield Cloaks. They then supplemented their Shield items with complementary products to create a full range of Defense Against the Dark Arts products including items such as Decoy Detonators and Peruvian Darkness Powder (which they imported.)

    None of these offerings were inline with the original business plan or the branding of the store, but they were able to adjust their approach to packaging and – by setting the more serious products in a separate room – to expand their brand identity without watering it down.

    5. Be Prepared for Disruptive Changes in the Operating Environment

    Businesses don’t operate in a vacuum. They are affected by external forces that no single company can control. One of the major factors affecting the general environment a business operates in is politics. (That’s the P from PEST analysis.) The Defense Against the Dark Arts product line used to be a cash cow for Weasleys’ Wizarding Wheezes, but with Voldemort gone once and for all, that cash cow is going to be put out to pasture.

    Fortunately, the twins have relentlessly pursued a strategy based on new product development and they should be able to adapt. In fact, they may have already invented their next runaway hit, something that no other wizard business offers. Speaking of which…

    6. Find An Untapped Need and Fill It

    One of the product categories the twins developed is a series of “Patented Daydream Charms” that will immerse the user in a convincing 30-minute daydream. The cover art of one box suggests that you will be the star of a pirate adventure. The other available daydreams presumably also have escapist story lines.

    Hermione is impressed by the magical talent that went into producing the charms, but I’m more impressed by the marketing savvy that went into developing the product line. With this one product, Fred and George Weasley have entirely created and cornered the market for narrative entertainment for the teen and adult wizard demographic. Other than the breakthrough Daydream Charms, there appears to be no way for a wizard to enjoy a story with the lone exception of a book of folklore intended for wizard children. In all of the Harry Potter books, there are no references to wizard television shows, wizard movies, or wizard theater. All books in the wizard world appear to be non-fiction. The only forms of entertainment available to a wizard are music, sports, and games. In other words, the twins have no direct competition. Brilliant. 

    7. Always Build Brand Equity

    The best branding isn’t just a function of advertising and communications. The brand identity is ideally integrated into every aspect of the business. That’s why the twins’ smartest move may be that they launch their store opening with a very shrewd promotion. Sales promotions are common for grand openings, but the twins do it better than most. They don’t just offer a discount to draw in customers—they tie the sale into their brand positioning! The sale is specifically targeted at Hogwarts students “who swear they’re going to use our products to get rid of this old bat” (referring to the dictatorial headmistress Dolores Umbridge.) That’s not a run-of-the-mill promotional discount. It says something about what the brand stands for (mischief making) and it makes a strong statement about their politics, too. (That’s not always the wisest idea, but it’s the right one for the Weasleys’ Wizarding Wheezes.)

    Further Reading: Harry Potter and the Order of the Phoenix and Harry Potter and the Half-Blood Prince by J.K. Rowling

    Packaging design images ©warnerbros, designed by Nicholas Saunders

    Friday, April 23, 2010

    Ice Cream and Consumer Insights

    Ben Cohen and Jerry Greenfield (better known the guys behind Ben & Jerry’s) have written a traditional business book. It’s called Ben & Jerry’s Double Dip: How to Run a Values Led Business and Make Money Too. As you’d expect, it delivers expert advice on socially responsible business practices.

    Since this site is about finding business insights in unexpected places, I’m not going to talk about Double Dip. Instead, let’s take a quick look at another book they wrote. It’s a cookbook. And, where you least expect to find it, it serves up a quick lesson in market research.

    Ben & Jerry’s Homemade Ice Cream & Dessert Book has recipes for ice creams, sorbets, and even some baked goods. It also has an introduction where they tell the story of becoming entrepreneurs. According to Cohen, they ran into a major pothole on the road to becoming the brand you know and love. Pillsbury, the major food conglomerate that owned Haagen-Dazs, told Ben & Jerry’s distributor to stop carrying Ben & Jerry’s or else they would lose Haagen-Dazs. The fledgling ice cream company filed a lawsuit, but they knew they lacked the financial resources to fight Pillsbury’s legal team. They also attempted to “take the issue directly to the people.” One of the ways they did this was to set up an 800 number that people could call for more information about what Pillsbury was doing. They put the number directly onto the packaging for their pints. This simple idea was part of a public-relations campaign, but it ended up yielding market research. People called the hot-line, and Ben & Jerry noticed that most of the calls came between midnight and 2 a.m.

    That’s when Ben & Jerry’s really learned how their product was being consumed.

    There are two things that can be learned from this unintentional market research. First, sometimes you can learn a lot by asking an unexpected question. If you had been putting together a survey about ice cream, would your list of demographic and psychographic questions have included a question of when people eat ice cream? I wouldn’t have. This is one of the reasons why it’s wise to start with preliminary anecdotal research before launching a full quantitative research project.

    The second take-away lesson is that sometimes the best market-research is free. If your business has a web presence, there is a wealth of data that can be used not just as a metric to judge the success of your marketing efforts, but also as a source of information about your customers. Do you have a customer relations department? The complaints that customers have aren’t just problems to be solved—they’re free market research.

    Now if you’ll excuse me, I have an appointment with a pint of Strawberry Cheesecake ice cream.

    Further Reading: Ben & Jerry’s Homemade Ice Cream & Dessert Book, by Ben Cohen and Jerry Greenfield

    Monday, April 19, 2010

    Talk Radio (And Process Analysis)

    I’m not a big fan of Wall Street. (The movie that is. The actual street and financial district has its moments.) Not even the considerable talents of Michael Douglas and Martin Sheen can save this movie from its director. Greed may be good, but Oliver Stone is not.

    There is, however, one Oliver Stone movie that’s great from start to finish: It’s called Talk Radio. If you haven’t seen it yet, the plot centers around Barry (played by Eric Bogosian), a controversial radio talk show host and demagogue who has a natural talent for pushing his listeners’ buttons. In one scene, his boss Dan (played by Alec Baldwin) is concerned that Barry isn’t taking the death threats and hate mail he receives seriously enough. He shows Barry one of the letters and then says:
    “Think about that, Barry: The time it takes to sit down and write that on paper. Put it in an envelope. Lick it. Send it to this station… And I’ve got boxes of this shit sitting in my office.”
    What Dan does in that speech is essentially a basic form of process analysis. Yes, he’s just listing the steps it took to complete a basic task (writing a letter), but that exercise proves to be informative. Writing hate mail sounds easy for a second, but you gain real insight when you really think about all of the steps involved. Every one of those steps takes time and effort (even if it’s only a small amount) and demonstrates intent on the part of the writer. In the movie, the words on the sample piece of mail aren’t as scary or as dramatic as the notion that somebody was motivated enough to go through the process of writing them down.

    The take away lesson here is that the easy exercise of listing the steps in a process can lead to important insights. This is especially true when dealing with the mundane, daily operations that don’t seem to merit closer inspection. Routine steps that you may take for granted because they are each so small can add up into major bottlenecks. And what about your customer interactions? How many barriers have you placed between them wanting to use your product and them actually using your product? How have you set up hurdles to them making a purchase? Even from a communications perspective—what have you made your customers wade through to get to the information they’re looking for? (For example, how many readers did I lose with the opening aside about Wall Street. If you came for snarky jokes and movie recommendations, then it delivered what you wanted. Otherwise… well, sorry. I hope the rest of this post was worth the wait.)

    In the Talk Radio example, the process analysis just informs the characters about how deep a threat runs. When applied to business, this exercise can reveal opportunities to make operations more efficient, reduce turn around time, and cut costs.

    Further Viewing: Talk Radio, Screenplay by Eric Bogosian and Oliver Stone