A man was searching for ultimate wisdom and enlightenment and took a year long journey to the deepest parts of the world. While walking deep into a remote forest, he encountered a monk quietly meditating on a rock. He asked the monk “Can you tell me where I can find ultimate wisdom and enlightenment?” The monk remained in a meditative state and pointed at a path. The man excitedly started running down the path and fell into a ditch. "Splat!" Slightly bruised, the man got up and hobbled back to the monk. He asked the monk again, “Can you tell me where I can find ultimate wisdom and enlightenment?” The monk again quietly nodded and pointed at the path. The man ran down the path again, carefully negotiated the ditch...and proceeded to fall into a deep hole. “Splat!" Now all bruised with a twisted ankle, the man crawled back to the monk. He angrily said to the monk ”I asked you where ultimate wisdom and enlightenment was and all I did was fall into a ditch and a hole!” The monk slowly opened his eyes and said “Yes, it is the right path…just after the ditch and the hole”.
Sometimes, success comes from hanging on just a bit longer. Obstacles are what you see when you look away from your goal. Some people call it grit, intestinal fortitude, perseverence.
Angela Lee Duckworth, a University of Pennsylvania psychology professor, studies “grit” which she defines as ”perseverance and passion for long-term goals“. She gave an interesting talk at TED titled, “True Grit: Can Perseverance Be Taught?” Her research shows that achievement involves far more than natural intelligence. An impassioned, focused, single-minded person who perseveres despite obstacles almost always accomplishes more than a very smart person who switches projects and quits when things when the going gets rough.
To succeed, you often have to suck it up and know that it will be a very gritty day.
"If you don't learn from your mistakes, there's no sense making them." -unknown
If you are going to fail, fail early. Those words were from Prof. Duncan Simester. It’s amazing that many organizations tend to operate like battleships – difficult to change course quickly once they get started (if at all). We tend to have an “all or nothing” approach and operate in a serial manner in pricing, product launches and marketing campaigns. The problem is that the initial hypothesis may be completely incorrect and we will not know that we have a major failure until the very end. What used to work in the past is no complete guarantee that it will work in the present or future. Customers and markets change. A new variable may have been overlooked.
That’s where testing and experimentation comes in. Try different pricing schemes, marketing messages, sales scripts to test customer acceptance and resulting sales. Without experimentation, we will see signs of problems but will ignore them, or even worse, throw more money and resources thinking that will resolve the core issues. It will then reach a point when many encounter the “too big, too late to let it fail now” dilemma...except that it will fail. Consider the recent consumer backlash against Verizon Wireless' $2 “convenience fee” for credit card payments, Bank of America’s debit card fee, and Netflix’s rate hikes. Why didn’t they test this in a small segment instead of going for a nationwide rollout? As a result, they faced an avalanche of ill-will, criticism, and subsequently had to reverse course with at least Netflix losing business.
Testing and experimentation is part of life. You did it when you were dating. You try different things to see what works or fails. (Did you get slapped when you used that line? Okay – you may not want to try it again.) In war, armies do probing attacks to test the enemy’s readiness and reaction. The “Charge of the Light Brigade” approach can mean tremendous loss if it fails. McDonald’s offered Fish McBites when I travelled in Texas and Chicago in March but I don’t see them in the Northeast US – they are great at testing and experimenting with their products and promotions.
With the internet and social media, an organization has no excuse not to do business experiments. Test pricing and marketing strategies in different areas or customer segments,
Some Basic Steps to Experimentation:
• Design the experiment
Start with a hypothesis. Measure what happens in a test group versus a control group. Be clear on what you need to measure to produce a decisive result—and whether that’s a metric you can track.
• Keep it Simple and Think Short Term
Small and simple experiments are easier to manage, less costly, and a short timeframe won’t test the patience of upper management. There is also a likelihood that word will spread because many customers are part of worldwide organizations.
• Slice and Dice the Data
Remember that there will be lots of data and that statistics can mislead. Segment and dissect the data. For example, you may want to segment by gender, age, geography, SIC code, etc. Most actions affect some customers more than others. Look for subgroups within your control and test groups.
• Act on Facts
Nothing but a success in a testing environment should be rolled out more broadly. But neither should failures simply be scrapped. Refine the hypothesis on the basis of the results and consider testing a variation. Capture what’s been learned so resources aren’t wasted proving the same thing again!
Two experts and proponents of experimentation are Thomas H. Davenport and Duncan Simester (click on names for links to great step-by-step guides).
A man was furiously cutting wood from a huge pile. He was getting exhausted and slowing down as the saw blade got duller and duller. The more he cut, the duller the blade got, and the more exhausted and slower the man became - a classic vicious circle. Passersby would suggest to the man that he stop and sharpen the saw. He would reply, “I don’t have time to stop sawing. I have so much wood to cut!”
Think of your life and work as the saw. We all have plenty to do…and do…and do.
Take time to relax, meditate, renew your faith, review your life mission statements, connect with family and people you care about, read a book to stimulate your imagination and thinking, exercise, do charity, laugh, etc. You will actually be more productive and creative. Allow and encourage others to do the same if you are a manager.
You must make time to “sharpen your saw”.
(This is the final habit from "Seven Habits of Highly Effective People" by Stephen Covey and the premise of "The Power of Full Engagement: Managing Energy Not Time" by Tony Schwartz. )
* clipart courtesy of http://etc.usf.edu/clipart
You learn about Customer Value Propositions from business school and marketing. I learned about an equally important proposition from my father and Uncle Johnny: the Values Proposition. As I mentioned earlier, my father put his kids through school as a bartender. He and my uncle, Johnny, managed the bar and adjoining restaurant. Business was good and relied on regular, repeat customers. I’ve never forget when one customer bluntly said to me “I come here because I like the people...the food is the same everywhere...same brown sauce”. (That was an “ouch” for my uncle Gao – the main cook.) That statement was probably true back then – it was Americanized Chinese food with the same brown sauce on most dishes. To be fair to Uncle Gao, the customer base in Long Island, NY wasn’t too daring and ready for some of the more authentic dishes today.
What is the Values Proposition?
Bill Taylor, co-founder of Fast Company, coined the term and calls it “doing small things with great love”. My father and uncle knew the names and families of every customer. Neither was particularly fluent in English but always had a genuine smile and compliment for their patrons. Uncle Johnny would have a handshake, hug, and a kiss when you came in and when you left. They would give paper umbrellas and fans to children. They’ll make a special ice cream cake if they knew it was your birthday. Dad would open the restaurant on Thanksgiving holiday – it was a money losing day but he had a few customers who had nowhere to go on that special day. Dad and Uncle Johnny had a great “values proposition” – their differentiator was genuine affection and connection with their customers.
Things went downhill when Uncle Johnny passed away, Dad getting older, and a new aggressive, younger manager joined in. Things were by the books. The new manager spoke perfect English but wasn’t particularly friendly to customers (a bit of an attitude). He started charging for every little item…extra duck sauce and even fortune cookies because it “cost the bottom line”. The “values proposition” just wasn’t there. (Who the heck would go to a Chinese restaurant and expect to get charged for fortune cookies?) The restaurant ended up losing money by trying to save money.
Most companies offer a Customer Value Proposition but don't work on a values proposition, They have become faceless. You cannot find a direct telephone number to call. Customers are asked for an account number and endure the automated "press 1 for..., 2 for ..., 68 for..., press # to repeat". Once connected, you get the feeling that the rep is trying to get to the next call. In our quest to become more efficient, streamlined, and process-driven, we have turned the customer into an object on the flow chart. While companies are faceless, customers are anything else but. faceless Customers are human beings with feelings and emotions. Treat them wrong or indifferent and they will wait for the opportunity to leave (via a competitor or substitute).
Remember, all things (and brown sauces) being equal, people tend to do business with people they like*. Your products or services may be deemed as the same brown sauce (commodities) as in all the old Chinese restaurants. Start by treating each individual customer as an indvidual. Make them feel good about doing business with you. It doesn't have to be costly - it should show that you care about them. As an example, I would send customers a small stuffed teddy bear (in a shirt saying "You're beary special with us") when I heard about a grandchild's or child's birth. That surprise was very warmly received. That small token was appreciated not for its monetary value but as a sign that someone listened and cared.
Ensure that you have a Values Proposition to go with your Customer Value Proposition.
A wonderful article on this: The Values Proposition: Do Small Things with Great Love by Bill Taylor
*Paraphrasing Bob Burg
Many years ago, Wendy's ran a catchy ad campaign featuring a little old lady asking "where's the beef?!" when examining a competitor's hamburgers. You can bet that your customers are asking a similar question when evaluating your products and services.
Many product managers talk about features. There are also many brilliant people in start-ups with great concepts and ideas but they are not getting many investors. I always ask them one question: What is your value proposition? Anyone who cannot answer this question clearly will most likely fail. The Customer Value Proposition (CVP) is critical. It is simply “Why should I buy this from you?”
If we were to state Value in a formula:
Value = (Total benefits from a product or service) / (Cost of the product or service)
The higher the ratio of total benefits gained versus cost, the higher the value.
Solving a present problem(s)
Solving a possible future problem(s)
Doing things Better
Doing things Faster
Doing things Cheaper - Saves money
Makes things Safer - reduces liability
Makes things more efficient - frees up resources for other tasks
Cost to learn/train
Cost to set-up, e.g. site preparation, facilities costs
Cost to switch to new product/service, e.g. are existing data or procedures compatible, will end-users accept it?
Ownership costs, e.g. maintenance, insurance
Clear and Unique
A customer value proposition (CVP) should be clear, concise and compelling. A good CVP also differentiates you from the competition. It is a clearly defined statement that convinces customers that one particular product or service will add more value or better solve a problem than the competition or substitutes. Commoditization happens when you do not have a compelling, unique CVP – and you may end up differentiating only on lower price.
It’s Not About Features!
It is not about features; customers do not buy based on features. Always ask the "where's the beef?" questions: “So what?” and “Who cares?” when thinking about features and benefits. Not all customers will respond to the same Customer Value Proposition. I may highlight the benefit of data protection when talking about the feature of automatic data backup in an area where power is intermittent, e.g. a “developing” country while someone in an industrial area may not care as much. A car salesman in Saudi Arabia wouldn’t necessarily tout high mileage. Thus, it is important to segment your customers and create an appropriate CVP for each of them. This also touches on what we call “hot buttons” – what the customer cares about. How do you learn what the customer “hot buttons” are? You listen to customers, watch them (as discussed in an earlier blog entry), and learn from your Sales, Service, industry experts, media, etc. What you may perceive as your benefits versus what your customers think may surprise you and help refine your CVP.
Thinking win-win is not about being nice or letting others have their way. We are taught to be competitive at a young age and many of us base our self-worth on such comparisons. We think about winning as having someone else losing; there's only enough pie for one. However, that’s not true.
Win-Win sees life as cooperation versus competition. It is a balancing act between courage and consideration.
Steven Covey states that a person who approaches conflicts with a win-win attitude possesses three vital character traits:
1. Integrity: sticking with your true feelings, values, and commitments
2. Maturity: expressing your ideas and feelings with courage and consideration for the ideas and feelings of others
3. Abundance Mentality: believing there is plenty for everyone
This means that all parties feel that they have been treated fairly and equitably. Everyone has to be honest about how they feel, are empathetic and considerate in understanding one another, and seeks mutual benefit.
What happens when you feel that you cannot gain a Win-Win and heading toward a Lose-Win (where you do not get the benefit or it challenges one of your character traits)?
You walk away. There is no either/or.
Frank Lio is a Product Manager, Strategist, and Change Agent in the Hi-Tech industry. His growing track record of successes include creating 3 winning software products, leading nationwide seminars, and turning around a failing business unit. He is currently serving a dual role as Product Manager and Business Team Support Manager at Instron ITW.
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