The Detail Person

This blog has moved to www.thedetailperson.com/resources

2010-05-05T11:39:00.000-07:00

The new website at www.thedetailperson.com is now in place and this last weekend I transferred the last four articles I wrote for this blog to the new space. If you have been following the posts on this site, I hope you will checkout and bookmark or subscribe to the new website.

The website was built using the Drupal content management system. That has allowed me to add some nice features to help readers more easily locate and download information as the site grows:

A block highlighting the most recent posts
A tag cloud (clicking on a topic displays all posts tagged for that topic)
Archives by month posted
RSS feed that provides a printable copy of the post

I am also looking forward to the enhanced support for media which will be put to use after next week's presentation of LEAN and Meaningful Workflow Redesign to the HIMSS Southern Regional Conference in Dallas (5/13-14).

The Future of Healthcare Communications

2010-03-22T18:58:00.000-07:00

Am reposting an interesting demo from MIT showing the power of web-enabled telemedicine combined with artificial intelligence. Beyond that, it has been an eventful couple of weeks with passage of the health care legislation last night.

Finding Health Care During an Emergency

2010-02-10T08:44:00.000-08:00

A post by a friend and small business adviser, Jan Triplett, underscores the issues patients face navigating the health care system in an emergency. It's a frightening story of a lady who spent nearly 24 hours trying to get medical help for her mother who was having a suspected heart attack or stroke. The first facility did not take medicare or the supplemental insurance her mother carried. They would not admit her nor would they assist her in locating another hospital. After that came a series of missteps that no one wants to go through in a medical crisis. This particular story happened in Austin, Texas but it echos experiences being reported across the country. It's a warning to us that we need to do more than modernize the system...we need to insure that service providers put care and common sense forward in their practice.

As policy-makers ponder the question of compensating doctors based on "meaningful use" performance metrics, we need to insure that doctors and staff are not dis-incented to act in the best interest of patients to provide emergency services and care. This is a REAL concern as the performance metrics of doctors and hospitals may be lowered by accepting riskier cases. For doctors and hospitals, lower metrics means less money and damage to the reputations of those taking in patients with the most urgent needs. The unintended fallout from this concern translates to more emergency patients outside the system being left on the curb.

In the meantime, the best advice for every family is to walk through, research and document the steps and contacts that will be needed in an emergency. Make sure the emergency care you choose accepts the level and type of coverage you have. Make sure you have a primary care doctor with access to the emergency facility. Keep this information updated and handy. Contact your chosen primary and emergency facility yearly as well as every time you change coverage to insure that your plan will be viable in an emergency. Don't wait for an emergency to begin figuring this out - it could mean the difference between the life or death of someone you love.

Getting Started with HIPAA 5010 Transition

2010-02-05T10:42:00.000-08:00

By now everyone is probably aware that HIPAA standards have been upgraded and that the Center for Medicare and Medicaid Services (CMS) has set a deadline of January 1, 2012 for all claim submissions to be electronic and use the new standards (ASC X12 Version 5010 and NCPDP Versions D.0 and 3.0). While 2012 may sound like a long way off, a whole lot has to happen between now and then. CMS has created a set of fact sheets and checklists to help us all wrap our minds around what needs to be done.

From there, the stalwarts that have to implement these changes will want to download the 4010 to 5010 HIPAA transaction comparison tables that CMS has provided. Am currently checking with colleagues to locate a set of nicely formatted high level swim diagrams that would bridge these two levels of detail. The transaction sets at this level are not as complex as someone diving directly into the comparison tables might imagine. A typical flow would be:

Eligibility inquiry (270) >>> To Eligibility DB
Eligibility response (271) <<< From Eligibility DB
Professional Claim (837-P) or Institutional Claim (837-I) >>> To Medicare Carrier or intermediary
Claim Status request (276) >>> To Medicare
Claim Status response (277) <<< From Medicare
Remittance (835) <<< From Medicare

Post a comment if you have something prettier that can be referenced or shared with the rest of us.

Notes from the Texas Health IT Summit - Part 2

2010-02-02T19:25:00.000-08:00

This is the second of a series of notes from the Texas Health Information Technology Summit I attended in Austin on January 14th - 16th, 2010. Presentations from the summit can be viewed by clicking the titles on http://www.texashealthitsummit.org/presentations.html.

Bob Ligon, Senior EHRImplementation Consultant for TMF Health Quality Institute presented Incorporating LEAN in Physician Office Workflow Evaluation. Lean is a system that focuses on the elimination of waste and the creation of value from a customer perspective. Lean methods are being successfully used in health care to reduce cost and improve quality. An average practice spends between 75% and 95% of their time doing things that increase their costs and create no value for the customer: redundant tests, excess paper handling, movement, hand-offs and waiting. Practices can benefit by mapping out their current processes; the activity often uncovers many opportunities to improve efficiency. Process mapping should be done prior to EHR or other system implementations to provide a blueprint for supporting all necessary processes. Ligon's slides contain some basics for getting started on process maps. Simple process flowcharts and a layout of the facility may be adequate for smaller practices. Larger clinics and institutions will benefit from in-house or contracted process mapping expertise. The Business Analysts who do this work should have the expertise to evaluate as well as document workflows.

Dr. Joe Schneider, who chairs the HIT Committee of the Texas Medical Association, commented that a large number of errors and issues are being encountered by physicians using current EMRs. Setting rules and customization can be tricky. Practices should keep in mind that a minimum of 90 days of "meaningful use" data is required to qualify for ARRA funds in 2010. That means that EHRs need to be installed and in full use no later than September 30, 2010. Estimate at least 90 days for the average practice to setup and complete training on the EHR. Practices will need to back off their typical patient load during this period to allow time for learning and adapting to the system.

Several CIOs discussed the considerations that went into their selection and implementation of an EHR. The first recommendation is to look for a product and vendor that has been certified by CCHIT. The next concern (in Texas) will be to select an EHR vendor that fully supports the Health Information Exchange (HIE) network. A maximum of ten HIE vendors will be chosen by the Texas Regional Exchange Committees; announcements are likely to occur in March.

Chad Aiken showed e-prescribing with pharmacy interoperability can significantly reduce time spent by physicians on prescription renewals. E-prescribing has gained rapid adoption since 2004; nearly all chain pharmacies and 60% of independent pharmacies now support it.

Susan Fenton provided an overview of the latest HIPAA changes. Paper has now been added to the guidelines - it now must be destroyed in a way that cannot be read or reconstructed. Vendors handling implementations that fall under HIPAA compliance regulations will want to be aware of changes in sections 13404 and 13408 which now make them subject to the same restrictions and penalties as health service institutions.

The Texas Health Institute just announced a second Texas Health Summit is being planned this Spring in Dallas. Information will be posted on www.texashealthsummit.org as it becomes available.

Notes from the Texas Health IT Summit - Part 1

2010-01-21T16:31:00.000-08:00

This is the first of a series of posts I plan to do on take-aways from the Texas Health Information Technology Summit I attended in Austin on January 14th - 16th, 2010. Presentations from last week's summit have just been posted. The Summit was attended by a few hundred health care providers, educators, IT professionals, students and others interested in better understanding how the new incentives, reforms and technologies may play out over the next months and years. Demos were available from over 30 vendors. This summit was the first of several that are planned to be held around Texas. Check http://www.texashealthitsummit.org in a couple of weeks for upcoming events and presentations.

The Summit was organized into two tracks: a practical "how do I get this EHR stuff working and get my money" track for health practices and a conceptual IT/Policy track for the rest of us. I attended excellent sessions in both tracks including:

Health Care IT and Health Care Reform - Kim Slocum
EHR Features, Functions, Facts and Fallacies - Bob Ligon
Administrative and Claims Management Systems - Noel Khirsukhani
Electronic Prescribing - Chad Aicklen
Workflow Considerations and Change Management - Christine Allen
HIPAA and Security - Susan Fenton, PhD
EHR Adoption, Implementation, Utilization Roadmap - Bob Ligon

Kim Slocum - consultant, National HIMSS board member and author of Consumer Directed Health Care - a 360 Degree View - presented sobering data on health care costs and medical errors. "We spent $2.5 trillion for health care (17.6% of GDP) in 2010, higher than any other developed nation, and there is no apparent link between higher costs and improved quality".

A recently released report from the IOM, To Err is Human, To Delay is Deadly, states that little progress in medical safety has been made in the US over the last decade and that "preventable medical harm still accounts for more than 100,000 deaths each year".

The American Recovery and Reinvestment Act of 2009 (ARRA) has health care information technology provisions (known as HITECH) which hope to improve the system over time starting with incentives to install and demonstrate "meaningful use" of EHRs. Three stages (goals) for meaningful use of electronic medical records has been set for the next four years:

Stage 1: collect data that will be used as key performance metrics
Stage 2: share data via a health information exchange (HIE)
Stage 3: use data to improve practices

The Texas Medical Association's EMR Implementation Guide was cited as a useful resource for getting started.

Health Reform and Impact to Human Capital in 2010

2010-01-02T11:47:00.000-08:00

As a provider of outsourced health IT services, I have been preoccupied with health reform implications along with current shifts in technologies, market behaviors and workforce composition. Three catalysts I expect to impact Human Capital in 2010 are:

Health reform outcomes will shift the mix between corporations, small businesses and working individuals. Many working individuals and small businesses cannot afford health insurance. A significant number of would-be entrepreneurs work for corporations to secure health coverage for family members with pre-existing conditions. Leveling the playing field for all individuals to secure affordable health coverage without pre-existing exclusions could initially accelerate the exodus from corporations, but I'd then expect things to stabilize as economic barriers to hiring full-time employees are lifted. Requiring ALL businesses to supply health care to their employees would reduce the number of small business startups and the full-time employees they could afford to hire.

Health Reform Scenario 2010: Negotiating Concierge. Whatever happens to health reform, guess who will be entrusted to research and negotiate the future care of your employees, bosses and families? There will be great demand next year and beyond for HR professionals savvy in finding the best health resource values including directly negotiated discounts and concierge plans with healthcare providers, dentists, pharmacies and wellness programs.

A Renaissance in personal engagement. Late 2009 developments like Google’s new contextual search will accelerate the popularity or obscurity of online businesses. Contextual search helps people find what they want based on their past searches, preferences and physical location. But the latest move to personalize search increases the likelihood that businesses with strong local presence, established brands, and active online communities will shut out their less social and less known counterparts. HR will have an opportunity to shine in recruiting those who can add the personal touch to customer support, marketing and sales.

Who Killed Health Care? (And can it be revived?)

2009-10-07T13:41:00.000-07:00

Last weekend, I finished reading Who Killed Health Care? by Regina Herzlinger. Herzlinger is a professor of Business Administration at Harvard Business School who has focused on the health care industry for three decades. In her book, Herzlinger outlines the history and attitudes that have fashioned our current health care delivery and insurance systems. She describes the issues that occur when the motivations of insurers, hospitals, providers, government and academics are not aligned with the best interests of the consumer. She then outlines her plan or a consumer-driven system that would deliver affordable, high-quality care to everyone.

Herzlinger is a great believer in entrepreneurial resourcefulness and a competitive marketplace, but many things stand in the way of making the free economy work for promoting choice and affordable health care:

Most US consumers are given health care through their employers (they have few if any choices in the selection)
Low deductible insurance holders are less cost-conscious about their care
Transparency of price and quality is necessary for choice, but consumers do not have ready access to this data within the health care industry. The quality data that is available tends to focuses on process measurements rather than outcomes. Healthcare "complications" are enough of a reason for doctors to shun providing outcome statistics - some fear too much emphasis would cause doctors to refuse to treat the sickest patients.
Government intervention stifles entrepreneurial involvement

A list of innovations that Herzlinger feels would be hastened as a result of a consumer-centric sytem include:

Focused factories (smaller specialized health institutions)
Integrated information records
Personalized medicine
Integrated care
Access to Entrepreneurial Doctors
Convenience (location and scheduling)

The "bold laws" Herzlinger advocates to promote her vision of a consumer-driven system:

Everyone is required to buy individual (low cost catastrophic) insurance using tax sheltered income.
Government helps those who cannot afford to buy health insurance by subsidizing them.
Providers are free to bundle care as they want to and to quote their own prices.
Government requires publication of data on the performance of all medical providers.
Prices are risk adjusted.

In summary, I have found it useful to read a wide variety of viewpoints. A clear lesson is in how a good thing like the early innovation of the HMO that began with Kaiser can turn into a dysfunctional mess when those most connected with service to the consumer move on. As an entrepreneur, I hope I will have the opportunity to offer the skills picked up in other industries to help create a robust and affordable health care sytem for us all.

Notes from 5/27/09 Panel on Health Care Reform

2009-05-27T17:56:00.000-07:00

Today I attended a panel on health care reform moderated by Austin Mayor-elect Lee Leffingwell. The panel included John Troutner (Psychiatrist), Laura Stramberg (National Federation of Independent Business), Chuck Durant (VP, Seton NW Hospital), Anne Dunkelberg (Director of the Center for Public Policy Priorities), and Gaye Kopax (Health Care For All Texas).

The panelists were asked 3 questions:
1) Does the US need health reform?
2) How can we have a comprehensive system that pays for itself?
3) Citing the horror stories about other countries, what should we expect with adoption of a single payer system?

All panel members felt that health care reform is needed. Over 46 million people in the US are uninsured; more than half of these are small business owners and self-employed. The cost of health care for Texans has grown 10X faster than their incomes. Soaring health care costs are the #1 cause for bankrupcy in the US. "We don't have a health care system", stated Durant, "we have fragments". Less than 5% of medical students are planning to go into private practice; we are seeing medical errors due to lack of coordination of treatments; we are seeing incomplete care; we are not putting enough emphasis on preventitive care. We need to reward doctors for prevention. Troutner said "59% of doctors and 83% of psychiatrists support a single payer healthcare system. We need to fix the adversarial relationship that has formed between doctors, insurance and patients.

Concerning a comprehensive system, we need to have national health policy first. We are currently paying more for health care than other countries. Medicare is having difficulties because it is underfunded, but we need to realize that Medicare and Medicaid covers the population in poorest health...we should expect it to be less expensive to cover the generally more healthy population. The system needs to be non-profit. It is critically important to understand access and efficiencies as separate issues to be addressed.

Concerning horror stories from other countries, Durant said "the AMA attacked 'socialized medicine' in the 60's in an effort to galvinize the US against it". Durant has studied the system in Germany which is a hybrid system offering choices; he believes we could learn a lot from studying Germany's system. Canada pays 60% less than US citizens for drugs; their waiting times for emergency and elective care are comparable to the US. Other statistics indicate that other countries are likely telling horror stories about US care versus their own.

In conclusion, we should be aware of the many reform bills that are and will be discussed in Congress including The SHOP Act and proposals introduced through Obama's neighborhood outreach on 6/6/09.

Health Care Reform

2009-05-21T11:01:00.000-07:00

Last Friday, I had the pleasure of attending a talk by Dr. Alfred Knight, CEO of Scott & White, at a Leadership Austin breakfast. Scott & White is a Central Texas based medical institution that includes a network of hospitals, providers and health plan professionals. In the interest of full disclosure, I worked on the redesign and recent release of Scott & White Health Plan's website at www.swhp.org, but am not a direct employee of Scott & White. I have been inspired by Scott & White employees and Dr. Knight's talk, “The Reluctant Leader” to get more involved in helping our country move toward a health care system that better serves us all.

In last Friday's talk, Dr. Knight conveyed a powerful message about our health care challenges and what it will take to address them. Below are excerpts from my notes:

Today's challenges:

50% of US hospitals are currently operating in the red.
30% of medical costs are due to lifestyle choices.
Physician & health care staff shortages are getting worse as boomers leave the industry. We import 1-in-4 doctors in the US from other countries. The shortage is most acute among General Practitioners.
Our system of compensation is broken – we pay doctors to DO things [like take out an appendix], NOT to provide preventative medicine and counseling.
Risk is counter to physician training but necessary for successful reform.

Dr. Knight’s Views:

If health care reform is to succeed, change will need to be radical…will need to include preventative health care focus, efficiencies, tough decisions on how to handle costs from poor lifestyle choices….reform will anger everyone!

Actions Scott & White is taking to address challenges:

Focusing on wellness and healthy lifestyle choices - “Largest part of our business is NOT hospitals; it is wellness”.
Making greater use of nurse practicioners, pharmacists and counselors to allow physicians to manage more patients.
250 people from Scott & White have been trained on Toyota’s Production System and are working to apply this training to their health care practices. Dr Knight added that "this was the first system that got doctors engaged and working as a team".

I found it interesting that Dr. Knight began his education studying engineering at MIT before switching to medicine. He is, perhaps, uniquely skilled in envisioning the marriage of humanity and technology. Complacency, greed, and our different factions have led us down a path where we need something near to a miracle to pull ourselves out. But the miracle isn't manpower or technical know-how...folks, we have already solved every technical problem that needs to be employed to make our systems the envy of the world! The miracle involves waking up the disengaged people of this country (myself included), working together (set your partisanship and niche interests aside), and keeping the selfish entities at bay.

ProductCamp, 1/24/08 in Austin, TX

2009-01-12T10:34:00.000-08:00

Product Managers will once again have an opportunity to meet and compare notes at the upcoming ProductCamp on Saturday, 1/24/2009 at the UT campus in Austin, Texas.

What is ProductCamp?

ProductCamp is an unconference where participants in the conference lead sessions on any topic relevant to product management or marketing. Last June's ProductCamp attracted a broad and diverse crowd of seasoned managers and other professionals. I found the networking and discussions very rewarding, so this year I plan to lead two interactive sessions:

Product personas: concepts, application, rewards and pitfalls.

Develop a 12 month strategy to drive awareness in the marketplace (workshop)

I hope to see you there!

ProductCamp Austin

2008-05-26T12:48:00.000-07:00

On June 14th, I will be presenting at ProductCamp Austin. It is being held at the St. Edwards University Professional Education Center (Google Map). As with the Open Space conference, participants propose, volunteer and vote on the sessions they want to hear. I am greatly looking forward to rolling out some work that I have never shared before and the opportunity to exchange ideas with my peer Product Managers. Sessions listed in the most recent announcement include:

Priorities and Roadmaps: Guiding the Successful Business (Pat Scherer)

Navigating the political minefields of product management (Charlie Ray)

What does a Product Manager need to know about intellectual property - BEFORE spending $500/hr with a patent attorney (Don Jarrell)

Public Relations 101: What It Will Do, What It Won't Do, and How to Use It to Develop Key Messaging and Build Your Brand (Deborah Maggart/Phil West)

Career management for product managers - transitioning into and out of product management (Colleen Heubaum)

Open Space Agile Conference

2008-05-26T12:44:00.000-07:00

The weekend of May 30th, I will be participating in the Open Space conference hosted by Agile Austin for the purpose of discussing any and all aspects of Agile software development and project management. The open space conference is unlike traditional conferences. There are no schedules set ahead of time; the first session forms the schedule for the rest of the conference. Attendees suggest sessions and volunteer to facilitate them. My friend, Steven List, will be one of the facilitators helping us organize our sessions. We have some interesting people attending:

Rich Mironov of Enthiosys

Robin Dymond and David Douglas of innovel.net

Paul Culling of VersionOne

Israel Gat, VP of Distributed Systems Management, BMC

Peter Morowski, Sr. VP of R&D and Technical Operations, Borland

Dustin Wells, CEO of Headspring Systems

David Douglas, President of Innovel

Beth Weeks, VP of Engineering, Zilliant

Michael Hayes – President / CEO HayesSoft

David Thomas – VP of Products, Mirage Networks

Jeremy Miller

John Heintz

Jeffrey Palermo

Scott Bellware

Kevin Hurwitz

Blake Caraway

Eric Hexter

Dale Schumacher

Freelance Business Relaunch

2008-05-26T11:02:00.000-07:00

Lot's happening right now! In April, I left my day job to relaunch a freelance practice assembling and leading virtual teams to take on interesting web and software development projects. My associates are pioneers in applying social networks and open source technologies to create websites and collaboration tools that are more effective, easier to use and cheaper to maintain than 90's spawned enterprise applications. My contributions to my clients, teams and associates include:

Business strategy (competitive analysis, positioning, roadmaps, business and marketing plans)

Business analysis (use cases, stories, persuasion architectures, process automation and web flow design)

Management of the project, customer relationship and outsourced teams

How to Kill Failing Projects

2007-11-30T08:20:00.000-08:00

A colleague posed this topic:

It is estimated that only one-third of projects are fully successful, even with dramatic improvements in project management methodologies over the past several years. Most of us have been involved in projects that are not meeting the objectives and are consuming valuable resources (people, infrastructure, dollars). And yet, even when indicators suggest that a project is headed for failure, it is difficult to kill the project and reallocate resources to other, more fruitful efforts. I would appreciate any thoughts anyone has on this subject. I would be particularly interested in hearing from those who may have been faced with this situation and successfully dealt with it.

My response:

In my view, the operative phrase is proactive honesty. Ideally, a leader (project manager, product manager, CxO or other) will have established and be tracking to performance points necessary for success. The earlier a problem is detected and surfaced, the greater the chance that necessary corrections can be put in place. Projects that are beginning to move over budget or schedule may benefit from brainstorming among the project teams. This may surface ideas to reduce time and costs and aligns team members behind the project.

As an example, I was once faced with having to cut staffing in half for an already bare bones project. I fully expected to kill the project and reassign team members when I took the problem to my team that afternoon. To my surprise, they came up with ideas and signed up for the extra hours necessary to make the project successful. As a contrasting point, half of this same team had come from a doomed project that had been scuttled just AFTER the development phase completed. They had put tremendous time and effort into the earlier project and suspected that much of their efforts could have been better deployed. I found that trust in management goes a long way toward insuring timely corrective action and a higher rate of success. DO NOT KILL THE MESSENGER AND DO NOT BE AFRAID TO ADMIT YOUR MISTAKES!

A tougher problem occurs when outside competitive forces or a serious “gotcha” shifts the ROI into a losing proposition. Proactively coming to terms with the new reality and moving quickly to redeploy resources to healthier projects is the best course to preserve both money and morale. Even when the change involves layoffs, I found that the morale and confidence of my staff remained high so long as I dealt with the situation proactively, honestly and with compassion.

Designing Better Websites

2007-07-12T09:06:00.000-07:00

Great ideas and technologically superior products are not enough to succeed long-term in business. Ultimately, we need to turn our attention to how we communicate. True communication goes beyond "marketing" which includes the concepts of research, personas and demographics but is biased toward outbound broadcasting of our "messages". One duty of a good Product Manager is to promote and effectively channel inbound communication to improve the product and business. Accepting inbound communication adds eyes and ears to the organization. We can now respond to the needs and opportunities we allow ourselves to hear.

But guess what? Truly great companies take communication much further! They figure out how to employ two-way communication effectively to become more responsive, stay on top of changing conditions and build long-term business relationships.

So what does all this have to do with web design? The best designed websites make it easy for prospective customers to find what they want. In Waiting for Your Cat to Bark, the Eisenbergs used the cat analogy to stress that customers have short attention spans and are often looking for something specific when they visit a website. The well-designed site is "friction-less". The customer sees a path leading to their goal on the homepage. The path answers his questions. leads him to his desired goal and compels him to take action (like hit the Buy button).

The best websites are designed around the needs of prospective customers and employ personas to better understand their motivations. The Eisenbergs and others have drawn upon the literary art of fictional character development to get inside the minds of their customers. An example of a website which was developed around these concepts is Leo Diamond. Admittedly, the wording on the site is a bit schmaltzy for some, but notice how the Home Page provides easy access to answers for the "value buyer" looking for information on the 4Cs, the "fashionable buyer", the "looking for the perfect diamond buyer", the "I want to impress her buyer", ....

The ideas taken from Waiting for Your Cat to Bark WILL create a more effective website. For those with little time to invest in reading, here is my quick synopsis of employing personas to web design:

Make a list of who would be looking at your site and why
Make each persona a real person in your mind. Your persona may take life as you follow him around in your imagination. If so, write down what you learn.
Find people who represent the customer you are trying to reach, interview and observe them one at a time navigating your site. Ask them to tell you what they want to know and what they are thinking as they navigate. (See papers by Jakob Nielsen on how to conduct lightweight usability testing.)
Create an easy path on your site for each persona to follow. Address each persona on the Home Page with easy access to each question you have identified through your research. Think of this path as marking a trail in deep woods. Each answer you provide should lead him closer to the destination which is...
Your call to action! Whether it's hit the Buy button, call you or download information, know what you want your prospect to do and make it easy for him to follow through.
And finally...think of long-term value and relationship-building by providing a site that encourages customers to return.

Real People or Demographics?

2006-02-24T05:04:00.000-08:00

Today, I am thinking about a book called The Cluetrain Manifesto, client experiences, and the catalyst that originally took me into Product Management...Yes, I promise you, ALL these things tie together!

There are many paths into Product Management. As discussed in previous posts, many of us gravitate to the field because we have a passion for digging into the details of how things work, understanding why we are doing whatever we are doing, and working with people to transform intangible ideas into valued products. These three words (how, why and people) are like three legs of a stool called "success". Take away any one of these things. and the stool tips over.

Technologists and techno-centric companies are often very attuned to how things work. We are fascinated by the details. We think everyone else will be too. We create products with lots of features (more than our competition!!!). When the product is complete, we tout the technology and saavy that went into building it.

Then sadly, the eyes of the Market glaze over, and the lack of wallet-vote tell us we missed something.

And for the first time, we begin to look into why: maybe the Market just doesn't "get it". We go talk to "the Marketing Guy". "Hmmm, Marketing Guy says I need to provide 'sizzle'...what the hell does he mean by that? Obviously, he doesn't get it either...." Five marketing teams later, we either come to the conclusion that all Marketing people are morons, or we move one step closer to success: we ask the people we hoped would buy our product why they did not.

Asking a prospective customer seems like a logical and direct thing to do. Why is it such a huge leap for so many companies? I think it is because many of us invest a good deal of personal energy into our "babies". We want the Market to see them from our perspective. We want to persuade rather than listen. We do not want to hear that others find our baby cholicky, or worse yet... average! Sometimes it takes repeated failures to recognise the value of honest and constructive criticism.

Cluetrain Manifesto points out the tendency for companies to create barriers between employees and customers. It seems that the larger the company, the less contact we (the Creators of new products) have with the people who would be buying them. So we create in a void or try to substitute statistics, demographics, and averages for the opinions and feedback of real people. We kid ourselves into believing that the statistics will provide broader, more objective, and more useful information. The only problem is that real people are inherently not objective when it comes to personal choices. We forget that people have motivations and emotions that may not fit our models or be accommodated by our products. Their true feelings were not listed within "A" through "D" of the survey we sent them. Besides, they do not waste their time on fruitless exercises sent by strangers.

A number of years ago, I was a lowly Developer leading a software product team within a large corporation. My team could not find the answers to the why questions we asked anywhere within the company, so I overcame an aversion to public speaking to volunteer for opportunities to meet real customers who would be using our product. I found gold in every discussion! I brought it back, shared it with my teams. and our products began to win awards and gain a strong customer following.

In a time of unprecedented choices for communications and data gathering, understanding the difference between statistics and real people is critical. Statistics can tell you whether or not your product is selling, and provide valuable feedback. But for all the why questions that go to make-up great products and services, nothing beats 1-on-1 conversations with real people willing to share their views for transforming your ugly baby into something beautiful.

Is Customer Loyalty Really Dead?

2005-10-11T13:51:00.000-07:00

...Or are we just focusing on the wrong customers?

Last week, I was again off to see the Wizard, the wonderful Wizard of Ads (Aka. Roy H. Williams). This was the second time I had the pleasure of spending the day at his beautiful Academy in the Texas Hill Country south of Austin. A very interesting part of his presentation contrasts relational versus transactional buyers.

A relational buyer is a person who doesn't have the time or inclination to comparison shop. When a relational buyer needs something, he simply goes to a likely source and buys it. In the end, a relational buyer's only worry is that a product may not do what he needs it to do. If he is happy with the product and buying experience, a relational buyer will typically return to the same source over-and-over to make similar purchases. He will also recommend a business he likes to others.

In contrast, a transactional buyer is a comparison shopper who prides himself in getting the best deal. He will research the product, then call or visit numerous locations in search of the lowest price. The transactional buyer's only concern is that he may find the product for less somewhere else after making his purchase. Sometime later, if he needs a similar product, he will start the process of comparison shopping all over again.

Can you guess which one is more likely to be a loyal long-term customer? Beyond the advantages of loyalty and repeat business, relational buyers are more likely to provide higher profit margins, higher purchase rates per visit and lower overall transaction costs compared to their transactional counterparts.

Many businesses attempt to increase traffic to their stores through pricing strategies that appeal more to transactional buyers than to relational buyers. The additional traffic that is generated may be very misleading because only a small percentage may actually make purchases during a given visit. The low conversion rate means that actual sales may not offset the price discount used to attract the additional business.

While low prices attract transactional buyers, relational buyers are more likely to choose a source that someone else recommends, is convenient, or simply comes to mind as a source. According to Roy H. Williams, winning the mindshare of relational buyers must be a long-term commitment of providing a consistent and salient message that emphasizes unique value, quality and service.

There is nothing wrong with targeting transactional buyers or both types, but businesses will be most effective if they understand the differences and align messages and pricing strategies with the particular group they wish to target. For more on this and similar topics, you may want to checkout the many classes, books and articles on the Wizard's website at www.wizardofads.com.

The Schools of Quality

2005-09-28T10:43:00.000-07:00

Today, I received this question from a friend: "Tell me, in your opinion where is ISO 9000 on the continum from waste-of-time to essential? Is TQM really dead leaving 6Sigma to reign?"

I think this was a pretty relevant question for Managers overseeing product development and manufacturing, so here is my response:

"Six Sigma has definitely become the quality model of choice within
manufacturing (led by the automotive and electronics industries). ISO9000 and TQM provide some meaningful guidelines, but in my experience, too much emphasis was put on passing the audits versus focusing on the right actions to actually improve quality. ISO9000 emphasizes documentation and specifies a format that seems more in line with legal contracts than with internal working documents. TQM has strong emphasis on process definition, but is best known for its Malcolm Baldridge award. When a methodology causes businesses to spend MORE money than can be gained through quality efficiencies, it has been taken too far."

"I believe it is this reaction that led to the popularity of Six Sigma which is more a collection of tools and methods employed through different phases of production. I have spent quite a bit of time learning a very small piece of Six Sigma called VOC (Voice of the Customer) and portions of QFD (Quality Functional Deployment). The tools and methods include excellent ways to capture and prioritize product requirements, and to measure results against the original requirements. The mother of all tools in QFD is something known as "the House of Quality". Good and useful stuff!"

A note to readers: Some years ago, I helped head-up an effort to make a 450 person software development organization "audit ready". We achieved ISO9000 certification and won the Malcolm Baldridge award as a result of our efforts. Early this year, I studied Six Sigma QFD with a friend who was completing his Black Belt certification. I found the tools useful and went on to apply them to my product management and design work. I therefore consider myself a quality practician, not an expert. I welcome other informed contributions on this topic.

The Art of Market Research

2005-09-19T13:30:00.000-07:00

When can listening to your customers be hazardous to your company's future? This is a question I have been contemplating for a couple of months. It began with a reference by Roy H. Williams (see Wizard of Ads post) to the taste tests that led to the New Coke introduction.

On the surface, Coca Cola appeared to have conducted a textbook study to pick a soft drink formula that would help them gain market over Pepsi. Instead, the New Coke introduction was one of the most costly errors of the decade.

There are many lessons we can learn from experiences such as these. The first lesson is that it may be inappropriate to apply a scientific study (such as a blind taste test) to a product with Coke's nostalgic connections. Malcolm Gladwell, in his excellent book, Blink, pointed out other flaws in the study inherent to taste tests: the order and amount of beverage consumed can alter one's preference. The idea that a less sweet beverage can taste "sour" after drinking a sweeter beverage is something we have all experienced. A lesser known factor in "taste" tests is that most people prefer sweeter tastes in small quantities and less sweet tastes when drinking larger servings. So lesson #2 is to plan your experiments carefully: be as realistic as possible.

Yet another difficulty in collecting and interpretting data lies in the communications and thought processes of most customers. Kathy Sierra noted recently in her blog Creating Passionate Users that "people don't necessarily know how to ask for something they've never conceived of! Most people make suggestions based entirely around incremental improvements, looking at what exists and thinking about how it could be better. But that's quite different from having a vision for something profoundly new. True innovation will rarely come from what users say directly. This doesn't mean that you don't listen to users--because the truth is embedded in what they say...but you have to look for the deeper meaning behind what they ask for, rather than always taking them at their word."

The conclusions I have reached echo those stated above. As a Product Manager, I have found great value in conversations with customers and in opportunities to observe people working with products I am trying to improve. Theses activities can provide the creative spark for new ideas and perspectives that those of us too close to a specific product may have overlooked. We get into trouble, however, when we try to treat people's opinions and preferences as a scientifically controlled experiment. It is amazingly easy to create bias in experiments when dealing with personal preference - a bias that then becomes magnified through our own biased interpretation of the results. The more we delude ourselves into believing our experiment is scientific and our results conclusive, the more we set ourselves up for errors on the magnitude of New Coke. By recognizing the inherent flaws in approaching human preference as science, we can still reap the benefits of new perspectives while avoiding the pitfalls of over-confidence.

The Wizard of Ads

2005-08-29T06:05:00.000-07:00

"We're off to see the wizard...the wonderful wizard of ads...." A couple of weeks ago, I attended a free seminar by Roy H. Willams (Aka, the Wizard of Ads) at his beautiful retreat in the Texas Hill Country West of Buda. I heard about the seminar through members of Bootstrap-Austin. Scanning the reviews of Roy's books on Amazon.com, I figured it would be an interesting day. What an understatement!

A short time after I arrived at the Wizard Academy, Roy materialized on the stage, and like a modern day Merlin, demonstrated the craft of artful persuasion. What followed was a fascinating multimedia presentation on how the brain processes information, the challenges businesses face to be heard and remembered, the pitfalls of blindly following tried-and-true approaches to market research and advertising, and the effect of 40 year cultural cycles (shifting emphasis between "me" and "we") that influence whether messages are embraced or rejected.

Those of you who know me, or have read other articles of my blog, know that I take a long-term view toward building successful businesses and products: I believe that customers and markets can be won, but never held, unless you are committed to building the relationship (and the product line)...unless you commit the same loyalty to your market that you ask in return. One of the things I appreciated in Roy's presentation, and his writing, is a clear distinction between "quick fixes" that become less effective over time, and building longer-term brand recognition. Some critics feel he is a little "preachy" about his emphasis on responsible advertising. Some people should not be running companies.

On a more personal note: last week, Product Principles (my consulting group) decided to not pursue forming an LLC. Two of the members are so engaged in individual projects that they do not have the time to help build the business. It was an amicable decision for us to each focus on individual projects. I hope to have other opportunities to work with Chris, John, Lisa and Jeff again.

The last few days, I have been thinking about keys to move my business forward: lead qualification, face time, clarifying my value proposition, and Roy's concept of a "gravity well". One of the "Wizard" messages I have taken to heart is that I cannot persuade people to do anything they have not already imagined themselves doing. The people who could benefit most from my services are the ones whose products and businesses are just being formed. Unfortunately, the probability of my involvement at this stage is less than being called in to perform triage on companies in crisis. Unless a leader has experienced the pain of developing a product which misses the target so badly that the finest advertising campaign cannot resuscitate it, or conversely, has experienced the rewards of recruiting passionate customers who honed, tested and evangelized his products making them successful in the market, I have a difficult sell. That is where lead qualification, face time, and a clear value proposition needs to come forward. A friend and successful salesman put it this way: "always look for the MAN (Money, Authority, Need)". Good advice.

My ultimate goal is to partner with a visionary leader/business who wants to build long-term value by repeatedly delivering on the unarticulated desires of a growing market. I have accomplished this vision multiple times and can tell you that success in this area is like no other! I want to help more clients and businesses experience it! Are you the visionary MAN I seek (or do you know one I should meet)? If so, let me know you are there!

Best to you in all your endeavors!

Tracking Down the Illusive Product Manager

2005-07-10T08:01:00.000-07:00

I am convinced that the people who are best suited to Product Management instinctively recognize one another as any two members of the same species would in the wild. For those of you who find this idea bizarre, here is one person's view on identifying the illusive Product Manager in the wild world we refer to as the job market....

The best Product Managers I know describe themselves as "chameleons" and "jack-of-all-trades", but when you talk to one at length, you discover they are NOT "generalists" or "master's of none" (as the popular saying goes). Rather, they are people who love to learn, love to share ideas, and love to turn ideas into something physical and tangible...these people can get intellectually stimulated by almost any topic enough to dive in and master it... THEN either teach it or employ it in some new way. Strong Product Managers may have many degrees but they are just as likely to have none; they tend to be avid readers and self-starters. They have a knack for understanding and blending in with people throughout different organizations and levels. They are rarely strong introverts or extroverts; they are more likely near the middle...working well with both people and tasks.

When you look at a Product Manager's resume, the career path will not likely be linear (unless the resume was carefully architected to appear linear). To find that illusive Product Manager in a sea of applicants, look for business accumen and evidence of high level mastery/leadership within multiple specialized fields. Look for details sprinkled throughout the resume indicating interest and pride that goes beyond a standard list of industry jargon. Choose a topic in the resume and ask the applicant a detailed "how did you..." question. The true Product Manager will become energized while sharing his/her experiences and insights. This same interest and enthusiasm will carry over to any area of the resume you probe. Share a little about your company's challenges and you will see a Product Manager's interest and energy will carry over to your business as well.

Oh, yeah, and Product Managers tend to feel a need to share their visions of business utopia on the web! There are some great sites and great people scattered around out there; some of which you will find through my links.

Business Blogging on the Rise

2005-05-11T16:52:00.000-07:00

Business Blogging on the Rise: "Currently, only a few Fortune 500 companies have launched blogs, such as Boeing, Sun Microsystems, and GM; however, smaller businesses seem to be adopting them more quickly.
'Blogs are tailor-made for small businesses, and they are a better tool for them,' said Anita Campbell, editor of the blog Small Business Trends. 'Large businesses have to worry about what they can say in their blogs. They have to worry about SEC regulations and their different constituents, so small businesses have a better chance of making blogs work for them.'
That's not to say smaller businesses will not have issues when leveraging blogs for marketing purposes. They can be dangerous tools if they are not used cautiously. Businesses need to watch out for the type of information employees post, ensuring proprietary information is not shared. Employees also must evaluate the consequences of writing for blogs, which could inadvertently cause corporate scrutiny if questionable material is posted.
Despite the risks, blogs are gaining ground as credible sources of information with Internet users. According to a recent survey by Hostway, a Web-hosting and managed services provider, 45% of 2,500 respondents feel blogs are as or more credible than television commercials, and 45% feel that blogs are more credible than Internet advertising. Forty-one percent feel blogs are as or more credible that radio advertising.
Business blogging consultants agree that it is yet to be proven that blogs are a good direct-response marketing tool, but they can be an excellent tool to build relationships and create brand equity as more Internet users see them as viable sources of information.
'Blogs can help in networking and creating industry contacts and business partners. They can also be excellent selling tools, particularly with affiliate"

USATODAY.com - CEOs refuse to get tangled up in messy blogs

2005-05-11T16:44:00.000-07:00

Curious about which top executives are embracing the "blog phenomena" and the risks and rewards for doing so?

"Some large companies, including Boeing, General Motors, Hewlett-Packard and Sun Microsystems, are letting senior executives blog, but not a single blogger is known to be a Fortune 1000 chairman and/or CEO. In part, that seems surprising. Blogs, short for weblogs, are personal Web sites for posting thoughts, rants and opinions in chronological order. One written by a CEO would slice through traditional media gatekeepers and bring him or her unedited to the desktop of customers, employees, Wall Street analysts and competitors. A blog by a prominent CEO would attract instant traffic, could influence public opinion, perhaps steer legislation and maybe sell a few widgets. But despite all of the power and sway that awaits an early adopter, it's going to take a brave CEO with thick skin to enter the blogosphere...."

The Product Management Triad

2005-05-11T15:37:00.000-07:00

Another excellent article from Pragmatic Marketing...this one from Steve Johnson (click the title bar to view the full article with one of the most complete descriptions I've ever seen for the key Product Management roles):

"How many product managers do you need? What are their roles in the company? Is product management a support role for sales or marketing communications or development? I'm often asked to contrast product management, product marketing, program management and other titles in a high-tech company. All are poorly understood and are defined differently everywhere I go. An ideal solution for many companies is the 'product management triad'."

"Some product managers have a natural affinity for working with development, others for sales and marketing communications, and others prefer to work on business issues. Finding these three orientations in one person is an almost impossible task. Instead, perhaps we should find three different people with these skills and have them work as a team."

"Start with a business-oriented senior product manager for product strategy. Make this person a Product Line Manager (PLM) or director. Now add a development-oriented Technical Product Manager (TPM) and a sales-oriented Product Marketing Manager (PMM)...."

Thanks to my friend Brian Massey for sending this link to me (and Steve Johnson for teaching me about the "Blog this" tool).