Enough with the “How Did We Do?” surveys

When I returned a rental car, recently, I received a bit too friendly service, followed by a request for a favor to rate the agent a 5 on the survey that would be sent to me shortly.

I chuckled. The agent asked why.

I said, I used to work on the other side of these surveys and they lose effectiveness when you lead the customer on how to answer.

She replied, “But that’s how we get promoted and I want a promotion!”

Fair point. The problem is the incentives her company gives her. They are managing to the wrong outputs. In this case, they are promoting people who are really good at asking for 5’s rather than people who may be really good for their business.

As a customer, I feel I’ve held up my end of the bargain when I decided to use that company and paid.

It puts me off to be made to feel I owe the company and agent more of my time to rate the experience or that I should donate my time to help them make their business better.

I’ve seen these types of surveys become infiltrate the business world like buzzwords. It’s just a foregone conclusion that they must be done.

In my experience, little benefit comes from them. When I’ve asked folks at companies I’ve worked with for examples of how these types of surveys have led to changes that resulted in significant and tangible benefits, crickets.

But, they continue with the surveys because they have become conventional business wisdom and the folks whose job it is to conduct the surveys have become vested interests protecting their turf.

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Resume builders vs value builders

Bureaucracies are filled with people more interested in building their resume than building value for the company.

Resume builders are good at making it look like they are valuable, but when you step back and ask what have they contributed to make the company better that has resulted in more revenue or more efficient operations, you come up empty.

They use a lot of tricks, though, to keep people from thinking that far. Here are a few.

Check the box. These folks seek activities where they are told what to do. From this, they can create a list of actions and check the box when each action is completed and claim success. And, if those actions generate value, they can claim credit for that. If not, they can deflect and claim success for having completed tasks.

Busy schedules. These folks like to keep busy schedules. Busy makes them look valuable. But 80% of this busy-ness is vaporware.

Noise making. They will say something in all meetings that they are in. If you pay close attention, they rarely say anything of value. But, they know that’s not what’s remembered. People just remember if you said anything at al. Say something and think you were actively engaged and therefore adding value.

Empty actions. When all else fails, do something and claim credit for it. This may be better to illustrate with an example. When one manager was starting to be found out that he was adding little value, he created a training program for his associates and sold it that he was upgrading his teams skills. That diverted attention away from the questions of what value he was adding.

Now, did any of his team actually get better at any of their new skills? Not really. Did their new skills help the organization in any way? No. Just more vaporware.

Buzzword and buzz phrase bingo. By mastering the current buzzwords, they create the perception that they are in the know with the latest and greatest. A recent example of this is “we’re standing up a group do address” such and such. All the resume builders seem to be going crazy ‘standing up’ groups lately. Somehow ‘standing up’ sounds better than ‘starting’. Also, it somehow keeps people from asking basic questions, like how exactly is that new group going to add value? It is just assumed it will.

I think there are a couple reasons this can persist. First, the tricks work. People are fooled into conflating the stuff above with adding value.

Second, for those who do notice the tricks, they won’t call them out because they are pulling the same tricks and also do not want to be called out.

Note on innovation: Fatal flaw

To add to my previous post, I do think it is a good practice on any project to identify and attempt to address fatal flaws and even not-so-fatal flaws.

In his book, How to Fail at Almost Everything and Still Win Big, Scott Adams says that many times if you are onto something, the signs are clear from early on. His example sticks with me: cell phones. In the early days, they were really bad, but there still was enough demand to keep it going. That is a great early signal that cell phones was onto something big.

I’ve worked on a couple of projects that similarly had early signs of success that turned out to be good predictors of what happened when we scaled.

Before we scaled, however, we “red teamed” them. While the project were big wins, it required a bunch of folks in the organization to buy into something that seemed a little crazy and against what your gut would tell you.

When we red teamed these ideas, we flew in some of the most vocal critics we knew in the organization and spent a week with them identifying their objections and work shopping ways to address them.

We didn’t try to BS them. We just tried to figure out ways we could show them how these things were winners in ways they made sense and addressed their objection.

The red team efforts turned out to be a big success because it got 96% of their peers to buy in and participate.

But there was a lot of tense discussions and a lot of setting your own biases aside to listen to what other folks thought and why they thought it, which doesn’t happen when the rah-rah culture forms around a project and doesn’t allow for such critical feedback.

It was awesome to see how those efforts paid off. When we presented the initiatives to the larger audiences, all the objections identified by the red team were raised and we were ready to address them head-on. It was like magic. You could feel the tension leave the room as the body language went from “no way in hell!” to head nods and, “okay, this sounds pretty good.”

Notes on innovation: Fatal flaws, check for demand and having the right attitude

Interesting thread here:

I, too, have been a member of such teams and I have seen the danger in believing in your BS too much.

I’m not so sure about the fatal flaw hypothesis. In hindsight, it’s easy to blame failure on a factor like a fatal flaw and to credit some factor for success.

But, I don’t think either are so obvious before it hits the market.

I’m interested to know how these ideas were tested in market before launching to try to get some signal on what actual customer demand would be.

I’m sure a company like Google knows to do this, but on the same teams that I’ve seen with the rah-rah culture, I’ve also seen them avoid getting it to market until it was ready for prime time for various reasons.

Maybe they’re concerned a competitor will catch wind and beat them (which I don’t think is necessarily bad), they’ve been burned on releasing something before that wasn’t ready for prime time and felt that hurt the company’s reputation and sometimes they just assume it will be successful because it sounds like such a good idea.

It reminds me of what Barb Corcoran on Shark Tank said once.

An entrepreneur spent all his time getting the production ready so he would be ready to fulfill orders when they started rolling in, but hadn’t even tried to sell it, yet. If you watch Shark Tank, then you know the Sharks aren’t just looking to invest in great sounding ideas. They are looking for some proof points, like early sales and customer acquisition costs, to help them predict if people want the product.

Barb told him (paraphrased), You remind me of a lot of people we see here on Shark Tank that come from the corporate world. You are very smart. You know how to get the nuts and bolts of the operations of the business running really well. But, you did all of this work and forgot the most important thing: checking to see if it’s something people want.

Here are a few more thoughts:

One way for leaders to quell the rah-rah culture is to understand the odds. Most things fail.

Legend-status contestants on Naked & Afraid exemplify the attitude needed for success in a long odds game when they are trying to acquire food. They know the odds are low, which gets them through the disappointment of failure. But, they keep trying.

It’s also a good analogy for business because they only have limited calorie reserves and time so they are constantly calculating risk/reward and ROI on their food gathering efforts, trying things on small scales and spreading their bets.

I think some leaders think the key to success is simply getting everybody on board. And, maybe a lot of business success stories have been narrated in such a way to make people think that’s true.

But, it isn’t.

A corporate Shark Tank that might work

In the previous post, I covered what folks miss when they want to implement a corporate shark tank.

This post covers some ideas on how to bring shark tank into a company that might work.

First, folks with ideas should do groundwork to prove an idea, just like the contestants on Shark Tank

In one place I worked, field leaders presented lots of promotion ideas because they were rewarded for presenting ideas. They got kudos for being forward-thinking, engaged and thinking about the success of business, even though many of their ideas had been tried and failed. So, they tossed plenty of ideas over the wall, not caring whether the business actually tried them or not.

Because so many of those ideas never went anywhere once thrown over the wall, we started asking the field leaders if they would fund the trial on their own P&L to prove it out for the business.

We were surprised with how that changed things.

It cut the number of ideas down by 80%. Talking about an idea is one thing. But, it turns out, putting some stakes on the table to prove your idea is another.

When people were forced to think through how an idea might impact their own wallet, much like founders on Shark Tank, they filtered their ideas more carefully and were more interested in learning about why some ideas had failed.

It also resulted in a few brave souls some ideas that were different and they signed up to try it at their own risk, achieving the original results we were after, bypassing red tape to test more ideas.

One of those ideas ended up being a grand slam home run and a few were pretty good.

Second, everyone is a shark

Most folks envision a corporate Shark Tank as an innovation committee made up of mid to high level managers who will act as gatekeepers.

But, I think this will result in the same red tape as the typical innovation methods they have now, but it will just be more showcased.

I would open the Shark Tank to anybody in the organization, to create an idea marketplace that can connect up the idea generators and champions with folks that want to try them in the real world and on larger scales, on their own P&L, or contribute their own time, effort and expertise.

I do see a need for a committee, just not as a gatekeeper.

The committee would collect the ideas, help idea generators conduct early testing and connect the idea folks with people who want to try them in the business or contribute more.

The committee could maintain an online, searchable list of ideas, like Kickstarter, so folks in the organization can search them when they are looking for ideas, along with organizing regular meetings where ideas that have shown good signs in early testing are pitched to gain champion for larger scale trials.

I think the committee can also enforce some key principles of innovation

Ideas don’t die until they’ve been tried. The primary criteria for product and marketing ideas is how customers respond to it. I’ve seen lots of ideas killed for lots of other reasons, like management didn’t like the idea, it was thought the idea didn’t fit with the vision of the company and so on.

Remind everyone that the the odds success are very low, somewhere between 1-in-10 and 1-in-10,000. That’s why we don’t kill ideas until tried, why we try as much as possible on very small scales and encourage as much trial as we can. Good innovation is much more about playing the odds than beating them. It’s a lot like fishing. Even the best fisherman don’t catch a fish on every line.

Corporate Shark Tank?

I’m a big fan of Shark Tank and so are folks I work with. Though, I’m surprised when we discuss it what they don’t see.

Some co-workers want to bring a shark tank-like process into the company to generate and vet new ideas.

In their corporate version of Shark Tank, they see employees pitching their ideas to a committee of leaders, who ask pointed questions, like the Sharks, to ferret out the best ideas and then cast votes for the best ideas to proceed, ‘just like Shark Tank.’

I think they miss key incentives from Shark Tank that make it work.

I suspect their version of Shark Tank would end up looking a lot like the political and bureaucratic processes that already govern capital and resource allocation in large companies.

For those who like the Shark Tank committee idea, consider the following questions.

What do folks pitching the ideas have at stake? What groundwork have they done? Who is on the committee? What do the folks pitching ideas have at stake? How do ideas advance?

What do the folks pitching the ideas have at stake?

These Shark Tank fans haven’t seemed to notice that the folks pitching ideas on Shark Tank have a good deal of their own money, creativity and effort at stake. It’s well beyond idea stage.

Their idea passed an important first filter: the founders thought enough about it to sacrifice their time and money for it, over all the ideas they may have had.

Ideas without proof are just talk and talk is cheap.

What groundwork have they done?

They also miss that startup founders have done a good amount of groundwork of proving their ideas — often into prototype or full product mode with real sales, which means the ideas have been put through a second important filter — do customers actually want it?

One of the classic speeches on Shark Tank was given by Barb Corcoran, directed at a founder from the corporate world who spent all of his time making sure the operations of his business would be ready to fulfill when the orders started rolling in.

Corcoran said something like, you are like many we see from the corporate world. You’re very smart, but you spend all your time solving getting the back office set up that you skipped checking the most important step: is it something customers actually want?

The Sharks hone in on many signs of early sales, customer demand and the cost of acquiring paying customers. Products that people want have a very low or zero cost of acquiring paying customers because customers instantly see the value prop, then they tell their friends and family (word of mouth) and they also repeat purchases.

These are products that sell themselves. Most successful products are products that sell themselves. Chipotle, for example, didn’t spend much on advertising until after it had already saturated the market with restaurants. Prior to that, simply opening new Chipotles was enough to get new customers.

Sales signals are 1,000 times more telling than whether or not the idea just sounds good and the sharks know this.

All the Sharks have changed their mind on a product where the idea didn’t sound good to them but the sales said otherwise. They know enough to know that their personal assessment of the merits of the product isn’t as good as the market’s assessment.

So, by the time the ideas see the Shark Tank, most have passed two important filters — the founder’s sniff test and markets/customer tests, in some form or fashion.

On occasion, Sharks do invest in products that are still in the idea phase. It might be a product that complements another product in their portfolio well, so they have a read on potential sales from that.

More often, Sharks dismiss the idea saying it’s “too early” for them. That means, they don’t have enough of a read on the second filter and it’s just too big of a guess for them.

Who is on the committee?

The corporate shark tankers envision executives on this internal Shark Tank committee.

These Shark Tank fans haven’t noticed that the sharks earned their way onto the panel with their own startup and business performance.

Most corporate executives do not have this experience. They may be good at delivering projects on time and under budget and playing office politics, but that doesn’t mean they can sniff out a good idea as good as a Shark, especially when they don’t have much at stake.

This is an easy mistake to make. Business leaders are often confused as good business people, but that’s not true.

It’s also important to notice that the Sharks are betting their own money on the businesses. They aren’t just giving a simple yay or nay vote with no consequence on whether the idea succeeds. That changes the decision-making considerably.

Without these incentives, the corporate shark tank would turn into more or less a venue for mental tennis.

How do ideas advance?

In the corporate shark tank, ideas advance through committee by majority vote.

Again, these folks miss that it only takes one shark in Shark Tank to buy-in. In this sense, the bar on this filter is lower on the real Shark Tank.

But, it’s balanced out that the Shark is putting their own money, time and expertise into the deal, which causes them to be a lot more careful in their decision.

Compare to the executive committee majority vote. Nothing is on the line for anyone. If a project they voted for fails, it costs them nothing.

When a Shark is wrong, it hits their pocketbook.

But, I do like the idea of bringing Shark Tanks in corporate worlds as one avenue of ideas. But, here’s what I would recommend to execute it to keep the incentives and filters that make Shark Tank (and venture capital) work.

More on that in the next post.

Why don’t we see the rising costs of college as price gouging?

College has become expensive because prices have consistently risen at rates above inflation for quite some time.

A chart from this Wikipedia article shows cost of college since the 1980s shows tuition has increased about 3x cost of living and 2x medical costs.

If private industry raised prices so consistently, price gouging would be a common criticism.

The closest we seem to get to criticizing college costs is simply lamenting it, as if it’s just some force of nature that can’t be reckoned with.

If you are sensitive to price gouging in the private sector, can I ask why you aren’t as sensitive to it in college education?

Subscription Fatigue

What gives? Everybody seems to want $4.99/month from me. “It’s just a cup coffee,” they prod.

I get it. A few businesses did well with the ‘subscription model.’ A classic example is Netflix vs. Blockbuster. Stitch Fix subscription-fied clothing.

The case sounds good to managers. Subscriptions get more of their company’s revenue onto a recurring basis where customers, once signed up. face behavioral barriers to canceling. It feels like this reduces the exposure company revenue has to the whims of customers on a transactional nature.

But, as a customer, I’m at that point where each new subscription, even though it’s ‘just a cup of coffee,’ is too big of a hurdle for me to agree to. Subscription fatigue.

I’m guessing I’m not the only one.

Just as they are a barrier to cancelling, I wonder if subscriptions are becoming a barrier to adoption?

Also, I think subscriptions act as a veil that keeps managers from thinking about what really matters: what customers want.

They see Stitch Fix and think customers want to buy their clothes on subscription.

They miss that maybe Stitch Fix customers really want to get new clothes without having to to go through the trial-and-error process to become an expert shopper.

Update: It seems like businesses should explore mixed models, so customers can transact how they choose. Some may prefer subscription, some may prefer transactional.

Stitch Fix makes it easy to do both.

Discovery+ does not. Subscription is the only option.

MLS is no transcendent soccer

It occurred to me today while reading some back and forth on pro/rel, soccer in the US and and in Europe that opponents of pro/rel miss something.

A key knock against pro/rel, from critics, is super clubs that win or contend for their league titles over and over again. These critics like the American system, that handicaps teams through a myriad of salary, draft and roster rules to achieve more competitive parity and less super clubs.

One comment I read today, pointed out that comparing the number of teams/clubs that have won the championship in MLS to Premier League is not the right comparison. A better comparison is to the two leagues under the Premier League in the U.K.’s soccer pyramid.

Those leagues have far more champions and a large number of clubs that have been promoted into the league and relegated down to the next league.

But, why compare to those leagues? After all, MLS is the top league in the U.S.

First, the level of competition in those leagues are more on par with MLS, because the payrolls are more on par.

But, that comment made me think there’s a more important reason.

The top leagues around the world have created what the critics the would call super clubs. These critics don’t understand why its fun to watch the same clubs in contention year after year.

But, for fans, those leagues have created clubs and soccer that transcends geography.

What does that mean?

Lots of folks around the world, not just in their home cities, follow Manchester United, Arsenal, Liverpool, Barcelona, Real Madrid, Juventus, PSG and Bayern Munich, among others. Even more have heard of them.

The attention garnered by teams in MLS and the 2nd and 3rd tiers in Europe is limited to the populations in the towns around them or people with affinities to those towns.

The big clubs transcend this geography because they have the world’s best players and best coaches. Their coaches are less constrained by budget to get the players that can execute their systems.

Soccer fans around the world want to watch the best players and best clubs for lots of reasons. They enjoy watching the top players and teams.

They want to see how the top play. They want to see what’s possible. They want to see results of all the hard work those players put in and the talent that goes with. They want to see how the coach has pieced together a masterpiece to execute their vision and how they handle adversity and adjust game plans, rather than watching a coaches make due because they that had to make tough trade-offs to make a budget.

While I think it’s tough to peel the apart the affinity folks have for a club vs the club’s players and performance is tough, Man United is a good example of what happens when you don’t have the performance. They have good players, but that’s not enough and and the club has lost a little bit of the transcendent footing over the past few years as they have struggled with performance.

I’d argue that its owners might think the game is just about getting the best players and misses the part where you have to get managers that can build the teams that can execute their winning vision. In Man United, I see a team of good players, where the coach, like coaches in the U.S., have to make due with what they have, rather than get the right pieces for their game plan.

And, while soccer fans love to follow their transcendent favorites, they also love to follow their local teams and cheer them on, too. Those are the 2nd and 3rd tier leagues in England and MLS, maybe, if they have a local team.

These soccer fans don’t get bored watching their transcendent teams continue to pile on results because they are watching the best do what they do.

Opponents of pro/rel in US soccer demonstrate that they do not understand how bottom-up works

Their critical mistake is believing that strong support for soccer must precede pro/rel, as if, somehow, pro/rel would weaken support.

They don’t understand that pro/rel helps cause strong support for soccer. So, they block the very thing that can create the condition they require.

They will say, “oh, but relegation battles don’t make things that much more interesting.”

I agree. In this post, I wrote more about what really does drive the benefit, from the bottom-up, of pro/rel.