Business Quests in the Information Age

Wisdom of crowds or herd mentality?

"Wisdom of crowds" is one of those fads especially online and I think there's a myth to dispel. Opinions, concepts, software, decisions and content may emerge and get build as a result of adding-up the individual inputs of many people, but that does not mean that where one identifies group phenomena there's necessarily intelligence, let alone wisdom. Since I think words are important, let me get back to the basics of what the word "wisdom" actually means, referring to a definition quoted from dictionary.com:

1.	the quality or state of being wise; knowledge of what is true or right coupled with just judgment as to action; sagacity, discernment, or insight.

2.	scholarly knowledge or learning: the wisdom of the schools.

3.	wise sayings or teachings; precepts.

4.	a wise act or saying.

While there are cases in which the collective intelligence of many participants to a process of creation or evaluation may yield positive results, I believe there are conditions for that phenomenon of collective emergent intelligence to actually take place and I doubt it should be called "wisdom". And I doubt it's relevant to characterize any group behavior as "wisdom of crowds" as some people tend to do. Since there are a couple of business ideas out there that rely on the assumption that collective intelligence can be exploited by merely putting together a community of users, I think there are quite a few entrepreneurs who should think this through. Sometimes crowds are just dumb and there's nothing very wise about herd mentality as shown in this excellent story of Gaston Lagaffe (click to enlarge).

Matthieu Ricard at Google

Interesting insights with a strong scientific and philosophical basis. Also interesting is the fact that Ricard was invited to speak at Google. What would happen in the economy if we had truly happy people at work? What would the impact be on our societies and on global issues facing mankind?

Excellent customer experience is the cornerstone of branding

There's a very interesting post discussing the attributes of global brands in Harvard Business Online. The author identifies common aspects to global branding and his claim that there is considerably lesser need for adapting to local markets is one that surprises me. Indeed, when considering new marketing practices most of which are based on the premise of customer participation, it does seem quite challenging for a company to force the same perception of a brand all over the globe. Furthermore, although the points identified are interesting, there is something missing: excellent customer experience, which in essence is based on consistency between what is promised and what is delivered. Toyota, Nokia or Intel, all mentioned in the post, have been able to deliver outstanding products delivering a customer experience in line with what was promised:

• Toyota made cars with the best price-to-quality ratio making a total commitment to continuous improvement,
• Nokia made it easy to connect people (most notably with a user interface now adopted even by competitors)
• Intel brought processing power to the masses and beyond

So the market ends up giving its preference (and thus building brand value for those companies) first and foremost because the customer experience is excellent. That of course does not mean perfection: some Nokia phones are not that great and Intel had its share of failed releases. However, it does mean that if you don't have the excellent customer experience, no effort at branding will ever yield results worth mentioning. Perhaps this is the main issue facing Ford (another company mentioned in the post) these days. And excellent customer experience is also what drives buzz, viral and guerrilla marketing phenomena in today's connected world.

The Paradox of Choice

Perhaps an interesting perspective to consider in the way we run business and countries.

How good are we at pursuing happiness?

A fascinating presentation at TED Talks about our ability to "synthesize" happiness. Of course, as is often the case with results from scientific research, this can be seen in a positive light (that we can synthesize happiness better than we can pursue it) or in a way that would essentially anihilate the drive for progress (why pursue happiness if it can be synthesized?).

Who speaks when a founder is talking?

Working in close cooperation with and coaching the founders and leaders of a business is the type of work I most enjoy because it is about helping them achieving their potential. Facilitating the achievement of human potential to the fullest possible extent in a business is in my opinion one of the most exciting missions.

To be able to serve such a mission in business one needs structured thinking and true compassion, the first making it possible to approach often complex situations sometimes from unusual angles and the latter being the condition sine qua non for sharing the feelings and passions of people, without which even the best plans and decisions fail to generate business value.
Just a couple of days ago I had the opportunity to take the founders of a fast growing business to an off-site workshop aimed at helping them define key directions regarding both their business strategy and their personal goals and expectations as founders. The decision to prepare such a workshop came when I realized that the founders of the business had highly fluctuating positions when considering potential investors for their business. It was almost as though different people where speaking to me at different times about the same topic, and in fact that may have been exactly what was going on.
From my training as a master practitioner of neuro-linguistic programming (NLP) - a discipline that sometimes causes heated debate despite the indisputable added value it can bring - I know that human beings have several facets that seem to have their own agenda in the human psyche. Each facet generates thoughts, feelings and actions that serve one or more specific goals, which that part of the person feels are its best possible contributions to the person. When someone is not confused or troubled in any way, when someone is "aligned" in the sense that all of the facets of her psyche contribute their part to an overarching goal, then things flow pretty smoothly: thoughts, speech and actions are quite coherent and the commitment to a course of action is quite unwavering unless new data come in that justify a change of position. Of course, the opposite happens when "parts" of a person seem to pull in different directions because the agendas they serve seem incompatible at first glance. I thought that was probably what was going on with the business founders who were ambivalent about a number of issues regarding the development of their business. So I used my NLP skills to develop a tool that can be used in workshops as well as in one-to-one sessions with people pursuing business quests and which I am publishing here under Creative Commons license (NC-BY-SA).

The founder of a business has several facets or roles, four of which are dominant in my opinion. Although from person to person there may be variations of these four dominant parts or even additional part, my method focuses on these common elements of a founder's personality. Let me quickly present them (and I apologize for the very general statements whose sole purpose is to sketch quick profiles here) and then show how to use the method. Having a rough understanding of these different roles is quite important to be able to identify who speaks when a founder is talking. The diagram (click on it to get a larger version) shows the four roles and the intensity of ties between them.

The Entrepreneur is the most obvious and most public facet of the founder. The Entrepreneur is the most active part in pursuing the creation of a new business, the mastermind behind the business concept, the inspirer and "strange attractor" for talented early joiners and crucially, the top salesman for the services of the newly created business. His strongest skills are selling, building partnerships, generating a vision and communicating with enthusiasm and authenticity. Typically, the Entrepreneur's values are creativity, discovery, creation, growth, innovation, merit... although there may be other values as well and these may be expressed differently. Although he knows that risk is inevitable, the Entrepreneur will seek all possible ways to keep risks under control. His outlook on life and the world is usually positive (typically he believes success is possible provided he works hard to pursue a vision).

The Professional is the second best known part of the founder's personality. He is the expert in a specific field, the part that provides "technical" content and so-called hard skills. Depending on the field of expertise, the Professional will pursue a number of key values that are typical in that field (e.g. creativity for ad execs, precision for software engineers...) and the role of that part in the founder is to provide assurance to the world that the founder is competent to act as a provider in his chosen field of business. The Professional bears a heavy load whenever the founder needs to assert his rights as a legitimate participant in an industry or profession.

The Private part is the founder's non-business life, which is sometimes neglected or forgotten, but acts as a strong driver of many decisions. Ask successful founders and they will all tell you how important the private facet is and how essential it is to find the right tension between business and private spheres. That part's mission is to contribute to the founder's inner balance and to create places and times where the founder can rest and take a few steps back to consider things without day-to-day business pressure. Needless to say how fundamental that part is and I can speak from personal experience both because at times in the past I minimized the energy alloted to that part and because I was lucky to get a lot of strength from that part of my self while going through some very tough challenges a few years ago.

The Shareholder / Investor is the least acknowledged facet of the founder. Many founders forget that when they work without pay, do extra-time, put their money in a business or generally speaking allocate existing resources in a way that can only be justified by the expectation to get more resources out of the business in the future, they do act as investors. Investors of a very peculiar type perhaps because most of their resources are generally speaking non-cash, but investors still. So in a way, it is quite paradoxical that so many founders have such hard time accepting the logic that drives professional investors, although the scant respect of the latter for so-called sweat equity may be an explanation. The Shareholder is the part of the founder that seeks a fair return on the investment and wants to secure the founders' assets. The values he will typically adhere to are efficiency, profitability, productivity, fairness, security, power-influence and control. His beliefs about the world are not necessarily positive and may sometimes be quite paranoid, especially when prospective investors require terms that may be detrimental to the founder's position.

The method is based on the principle of inviting each of the four parts to express its position relative to a given issue that the founder is facing. Relevant issues may be both business decisions from strategy to day-to-day situations, and more personal decisions ranging from the longer term commitment of a founder to her business to deciding about which kinds of investors to accept as partners.

Each of the roles is assigned a physical location in the room where the exercise is taking place (see diagram - click to enlarge). When the founder is physically located at that spot he is only allowed to speak in the name of the role of that location.

Step 1: The facilitator invites the founder into the space of the exercise and asks him to quickly explain the issue that he wants to solve.
Step 2: The founder is asked to choose the first role for which to express an opinion or decision on the issue. The facilitator helps the "part" of the founder express clearly its opinion, position or decision and notes down a couple of sentences that express that part's input. Then the founder is asked to choose the next role to be involved in the process and the step is repeated.
Step 3: Once all parts have made a statement that reflects their position, the founder and the facilitator move to the neutral spot to act as non-judgmental observers or coaches. The facilitator invites comments from the founder about the interactions between the roles, the situation, any potential conflicts or issues of compatibility between the roles' positions. The facilitator helps the founder express his analysis from the neutral position (i.e. without being identified to any of the roles, without expressing judgments about the roles or their positions...).
Step 4: Once the analysis of the situation is done, the facilitator will invite the founder to imagine possible changes to the positions of the roles that would help them cooperate better in the resolution of the issue being discussed. For each change suggested from the "coach" position, the founder is invited to go back to the positions involved in the change to check how that specific change would affect their opinion, position, decision or general contribution to the solution of the issue being discussed. If additional issues arise, the facilitator may decide either to interrupt the exercise and discuss those issues first (potentially using this same method) or to note the issue for later. Once a role's position is modified or reviewed, the founder goes back to step 3 to review the situation and to step 4 to identify additional improvements.

Several iterations of steps 3 and 4 may be necessary to achieve a fluid set of positions that is defined as a set of positions such that all roles contribute to a commonly acceptable solution in the issue raised by the founder.

Step 5: The facilitator asks the founder to build a short sentence that integrates the four perspectives and expresses the founder's attitude, opinion, decision or plan for the issue at stake. The founder is then asked to detail how that sentence will translate in his actions in the near and longer term future (in NLP this is to create a bridge to future real-life situations and hence some sort of foundation to actual implementation of the integrated position of the founder).

I have had a couple of opportunities to try this method and it does bring some pretty good results both in terms of how founders feel about the issues tackled and in terms of their actual actions relative to these issues. For those of you who use the method or a variation of it, I would be very very interested indeed by your feedback. Suggestions and ideas to improve this are very welcome.

The Ethical Mind

There's an interesting interview of Psychologist Howard Gardner in the latest issue of the Harvard Business Review, in which he gives a couple of perspectives on the ethical mind. Gardner sees the human mind as a set of cognitive capabilities that can be grouped in five classes he calls the five human minds (disciplined, synthesizing, creating, respectful and ethical). Here are a few interesting quotes from an article definitely worth reading:

"A person with an ethical mind asks herself, "What kind of a person, worker and citizen do I want to be? If all the workers in my profession adopted the mindset I have, or if everyone did what I don what would the world be like?"

"A study we published in 2004 found that although young professionals declared an understanding of an a desire to do good work, they felt that they had to succeed by whatever means; When they had made their mark, they told us, they would then become exemplary workers."

"We live in a time of intense pressure on individuals and organizations to cut corners, pursue their own interests, and forget about the effect of their behavior on others. Additionally many businesspeople have internalized Milton Friedman's belief that if we let people pursue their interests and allo the processes of the marketplace to operate freely, positive moral and ethical consequences will magically follow."

"When everything that matters can be bought and sold, when commitments can be broken because they are no longer to our advantage, when shopping becomes salvation and advertising slogans become our litany, when our worth is measured by how much we earn and spend, then the market is destroying the very virtues on which in the long run it depends." - Chief Rabbi of the United Kingdom, Jonathan Sacks

The Right Tension

A couple of issues ago (December 2006), the Harvard Business Review published a very interesting article (Managing the Right Tension) by Dominic Dodd and Ken Favaro, who argue that many of the trade-offs and decisions of usual managerial practice fail to take into account that a company does often need to balance opposed concepts. So it is not that much about making a trade-off between short-term and long-term as it is about finding the right tension between short-term and long-term perspectives by integrating those seemingly opposed imperatives by asking a "simple" question: "how do we achieve sustainable revenues and earnings?" Although the approach may seem simplistic and I bet some people will even go as far as to say that it encourages managers not to make hard decisions, I do believe there is considerable value in shifting the perspective of managers from an "either / or" mindset to one of integration that takes several dimensions into account in an attempt to find the right balance for a company. It's a much more holistic way of managing a business and I think it's really worth considering. In fact, the article of Dodd and Favaro gave me a couple of interesting inspirations for one of my customers who is facing explosive growth and is required to seriously manage growth and profitability, another of those strange pairs of business concepts.

The death of the Gaussian curve

I had a very interesting, entertaining and stimulating lunch today with a curious, smart and witty entrepreneur. We had a fairly long exchange (although I did not see the time fly) about the dramatic changes now taking place in the media, entertainment and marketing & communication space. The challenges are indeed momentous for established players and one of my friend's point was to say that it is not so much the change in itself that is a problem but rather the fact that incumbents are in denial because they have to deal with the constraints of their traditional business and organizational models. He went on to describe how what is now happening is actually increasing the level of complexity and fragmenting the "mass" market to the point of making it almost meaningless to be thinking along the lines of the Gaussian curve: we live at times when individuals do have an influence and and impact because the world is increasingly interactive and therefore the very nature of uncertainty is changing. He and I agree that the Gaussian curve is slowly and surely becoming less relevant.

Another thing my friend made me realize (again) is that evolution and innovation cycles are not binary in their outcomes: traditional media will remain relevant, people will still need some form of print and television will not suddenly disappear, even though new ways are emerging and the traditional ones are being reshaped by the power of electronics / digital / computing / always-on / networking... And a number of new players will perish simply because of their illusion of absolute power. The war between Madison Avenue and Media 2.0 will cause many casualties on both sides and like with "brick & mortar", the winners are likely to be those businesses that manage to combine new technologies and traditional activities in a harmonious way.

Selfish business?

Not too productive these days because of an annoying flu, I've been using some of my time to look for interesting sources of inspiration and I think someone like Richard Dawkins is such a source. A long time ago he took part to a TV program aimed at correcting the misinterpretation of the thesis behind his book Selfish Gene. In that TV broadcast Dr Dawkins discusses evolution theory, game theory and the value of cooperative strategies, showing how fundamentally flawed "survival of the fittest" is and how incorrect a statement "nice guys finish last" can be. It seems like an interesting follow-up to yesterday's quote of the day and good food for thought at a time of the year when many of us are thinking about their strategy for the coming year.