Archive for the 'Decisionmaking' Category

Find The Idiot, Save Your Organization

Decisionmaking, consulting No Comments »

Thinking about an old friend’s routine but soul-grating hassles with an incompetent scheduling department at her health care clinic, and thinking more generally about these kinds of broken processes, I came to a startling, if perhaps not novel, conclusion.

Where there is a broken system, an oddly failed yet presumably viable organization or process, somewhere, there is an idiot. Somewhere in the chain of command or in the network of dependencies or in the shifting hierarchies of the old boys’ system, whatever organization or lack thereof controls or influences or encompasses the problem, the grit in the machine, the error under consideration – somewhere there is a buffoon whose idiot hand trembles uncomprehendingly on some critical lever he or she has not the wit to understand.

Sometimes there is more than one of them. That’s when you really have a problem.

From a management consulting perspective, finding the idiot can be very rewarding, if dangerous. If the idiot turns out to be the CEO, you have a problem. Luckily, there are a lot of other candidates too. Dead people are (were) very often idiots, and are convenient to blame, if you do it quietly.

Some problems, of course, aren’t actually caused by idiots, or if they are caused by idiots, the idiots are far away and beyond your ability to affect. Organizations affected by a minor outburst of idiots in powerful places, however, have a distinct feel to them. Memos and emails appear, their exact authorship unclear, providing directions that are either vague or self-contradicting or both. Important jobs go undone while reports are updated like clockwork. Staffing levels go awry and service times become stupidly slow or unrealistically fast.

Find the idiots. Worm them out, by hook or by crook. Find them nice work in the urinal storage facility up in Adak, and hire someone with a measurable IQ to replace them. It might be the difference between life and death for your organization.

If you’re self-employed, you might need a mirror. I will talk more in a later note about being an idiot yourself and how recognizing it can tremendously improve your performance.

Excess Complexity: Why Your Business Model Is Doomed

Computers and Software, Decisionmaking, Economics, consulting No Comments »

An excellent essay. Read, as they say, the whole thing.

Why SEO Isn’t Really Important

Decisionmaking, consulting 1 Comment »

Search Engine Optimization (SEO) has been a buzzword and key concept in website development for several years. Anyone creating a new website is urged to follow SEO guidelines, to pick the right tags and design their site for Google friendliness, all in an effort to attract organic search traffic by being at the top of the Google rankings for particular keywords. For example, a site that sells women’s fashions wants to appear on the first page of Google search results for “women’s clothes”. Companies spend thousands of dollars tuning their websites, soliciting backlinks to boost their site’s credibility within Google, and adding filler copy to produce more keyword-rich content.

There’s nothing wrong with any of this – but in the arms race of website promotion, SEO is the equivalent of rifles and hand grenades. It’s useful, you certainly need it – but it isn’t going to win the war for you. The other side has rifles and hand grenades, too. Even Somali pirates can afford rifles and hand grenades. There is little or no “edge” to be gained by having a slightly better rifle or somewhat more hand grenades than your competition – you’re using basically the same tools to fight for the same ground. You can’t NOT do it, because that would give your competition an advantage over you, but it isn’t going to be enough to win.

To win, you have to focus on something other than impressing the Google algorithm and attracting large quantities of essentially random traffic. To win, you have to focus on providing your customers with something that they can’t get in other places.

Companies hate hearing this, because providing unique value is HARD. Everyone wants to think they have a unique value proposition – but the hard truth is, most companies don’t. Sears isn’t doing anything that Macy’s isn’t doing. One oil-change chain is much like another.

Many companies start out providing unique value, because they were created in order to exploit some hole in the market. If nobody is selling left-handed widgets in Denver, then my left-handed widget shop, just by existing, has a unique value proposition (UVP): “We sell left-handed widgets in Denver, and nobody else does that.” The problem with this is that detecting a new niche is a one-off process: once someone starts to successfully fill a niche, other entrepreneurs will see the business possibilities and move into the marketplace. It won’t be long until Wal-Mart starts carrying left-handed widgets in their Denver stores, once they see that there is in fact a market for that – and then my unique value proposition goes “poof”.

So not only does your company need a UVP, it needs to be aware that the UVP must be dynamic and adaptable, not a one-time decision or discovery. Market conditions change, competitors enter, technologies shift – and your company and its mission have to be able to adapt as well. When Wal-Mart starts selling widgets, I have to find something new to add – and ideally, something that will be hard for Wal-Mart to duplicate. Perhaps I could start compiling performance data on all the left-handed widget models on the market, and publish that data in my shop but not online – so that people who come into Bob’s Widget World have better information than people going to Wal-Mart. Now my UVP is “We sell left-handed widgets in Denver with transparent performance information so that our customers always get the best widget.” Wal-Mart will have a hard time matching that expertise – but if they do, I have to be ready to take another step, continually innovating and finding ways to provide more value to my customers.

When it comes to websites, the bottom line is very simple: providing unique value to the people who use your site is where you can find an edge over your competition. You must invest in SEO in order to stay in the game; you must invest in providing value to customers in order to win it.

The Elusive Optimum

Decisionmaking, Economics 1 Comment »

Many years ago, when I was an elementary school student, I devised a trick of calculation that greatly sped the work on a particular type of math assignment. Naturally, I shared the trick with my friends and classmates, and soon everyone had the same technique. The aggregate amount of time saved was quite staggering, and I found it extremely gratifying to consider that an innovation that took me perhaps ten minutes to conceive and implement could have such an enormously disproportionate positive impact.

Ever since that time, I have nurtured and developed a keen eye for optimizing processes and systems, particularly organization-level systems where many thousands or even millions of people will be using a methodology or an interface. At the same time, my work in the computer software industry has also taught me that premature optimization can cause problems larger in scope than the inefficiencies the optimization purports to fix. My economics background, meanwhile, informed me that for most situations to speak of an optimum is to grossly oversimplify; most systems and processes have many different functions or outcomes that can be optimized, and finding “the optimum” is in fact a balancing act between competing values – if we can even find out what the values are! Finding the best fit for “optimum”, it turns out, requires an enormous exercise of judgment (hopefully informed by experience) and, often, guesswork.

For example, my boyhood invention undoubtedly saved us endless tedium on our math worksheets – but, lacking a grounding in what the worksheets were trying to accomplish, I failed to understand that the practice was itself the point. We were doing the sheets to get practice with the mathematical rule we had just learned. My clever trick didn’t teach its practitioners anything – it just let them skip ahead to the right answer. As a one-off, that is sometimes a good thing. When we’re trying to learn, it’s a disaster. My “optimization” was in fact a body blow to the process of our class learning math! Someone optimizing for short-term student happiness would mark my idea as a brilliant success; someone optimizing for student learning would stamp with it with a fat red “F”.

Getting to optimum is not easy or trivial.