Value Borne

An Unconventional Way To Retain a Client

2012-09-16T21:23:00.004-05:00

I have always thought that honest goes a long way. This approach to life may be interpreted as naive, but I do believe that becoming trustworthy will often work out for your best interests in the long run. Trustworthiness is beneficial both in your personal and work life.

Charles Green has been an advocate of trustworthiness for a long time, and stresses the importance of using trust as a competitive advantage. However, becoming easy to be trusted by others often implies taking counter intuitive actions and significant risks. In one of his books, he has an an excellent example of how an auditing firm approached a situation with an unsatisfied client that was thinking of changing supplier. New auditing companies were called to present proposals for the required services, and this auditing firm did the following:

"Instead of using their 90-minute time slot to do a conventional presentation, four of their partners acted out a skit for the four client executives. They role-played those very execs having that decisive meeting"

The company took a risk, talked about their current decline in their performance, and how they would improve it. The result: they were awarded the business again.

At the end, honesty's all we've got.

Knockoffs Decrease Sales. Really?

2012-09-16T12:33:00.001-05:00

Authors Kal Raustiala and Chris Sprigman have a new book out, The Knockoff Economy, exploring the effects of imitation on innovation and on profitability.

Common sense would say that when imitations (knockoffs) of products appear on the market, the sales of that product will be negatively impacted. But is this really the case?

The studies the authors conducted show that as long as users can distinguish between the originals and knockoffs, the availability of knockoffs have several positive effects:

There is free advertising for the brand of the original product

There are increased sales in the long run, when customers that use the knockoffs products are able to transition into the originals, or in other words, when they can afford them.

A short excerpt from the book:

"In short, copies of branded goods—counterfeits—can have a counter intuitive effect on originals. While these copies can steal away some would-be buyers of the original, they also can help create new buyers through the advertising effect. Some counterfeit buyers “graduate” to the real thing, whereas others who never buy a counterfeit become buyers of the original because the counterfeits serve as advertising."

In conclusion, imitations of your product may actually be good for your company.

At the end, if you are continuously the best in your category, everything will work fine, no matter how many try to imitate you.

Are you the best in what you intend to do?

Trailers and Lean Accounting

2012-09-16T12:10:00.001-05:00

Bill Waddell, famous lean expert and consultant, describes in a short talk the basics of Lean Accounting. It is always positive to see that leaders of various continuous improvement disciplines agree that an accounting and measurement system focused on real value and not artificial numbers is an essential component of effective management.

An example of a company that understand real value and effective metrics is ATC Trailers. You can understand their lean journey in this short video, and how they defined distinct value streams and eliminated waste to deliver products more quickly and profitably. End result: delighted customers, motivated employees and a growing company.

Are you using an adequate scorecard to manage and grow your business? Are you focusing on performing value added activities and eliminating waste?

Sleep No More, Zimbardo and Milgram

2012-09-16T11:00:00.000-05:00

Stanley Milgram and Philip Zimbardo are two recognized psychologists that conducted a some of the most famous social experiments in history to try to better understand human behavior. What they were trying to prove in their own ways was that behavior can be significantly altered by your surroundings, and a certain environment will induce you to behave in ways that you would not expect to under normal circumstances.

Enter Sleep No More, a fascinating and different type of theater play, created by an group called Punchdrunk. Instead of attendees sitting and watching the show in traditional style, they are given masks, walk through rooms, decide when to interact with actors, follow actors into rooms, and even eat and drink. Every decision the viewer makes shapes your experience, and by being anonymous participants do things that they would normally not do. Often, at the end of the show, attendees are surprised of their actions.

Read all about behavior, your surroundings and Sleep No More in the latest Freakonomics podcast, Fear Thy Nature.

Are you sure you would act as usual, if your surroundings change significantly?

The Flip a Coin With a Twist Method

2012-09-09T22:18:00.004-05:00

Ever been in a dilemma, and have no idea what to do?

When implications are so big that even an conflict resolution diagram will not help you find an answer, there is always the traditional "flip a coin" advice. But is it really effective?

Although flipping a coin may feel that you are leaving your decisions to randomness, there is an alternative method with a twist, that includes your gut feelings.

Making decisions is part of life. When unable to decide, the flip a coin with a twist may help you out.

So what will it be? Heads or Tails?

Instant America Infographic

2012-09-09T22:07:00.001-05:00

In a world were information can be accessed immediately with the tap of a finger, the click of a mouse or a couple of keystrokes, have you asked yourself how the instantaneous world we live in has changed our behavior?

OnlineGraduatePrograms.com created an interesting infographic that shows how impatient we have all become. To illustrate through an example:

1 in 4 people abandon a website that takes more than four seconds to load.

The internet has become as essential as electrical power, one of the great inventions of the ultimate geek.

I just have to wonder what Nikola would have done with the internet.

Are You A Linchpin?

2012-09-09T21:56:00.000-05:00

If you don't know about Seth Godin's Linchpins, maybe Hugh's illustration can help to understand the gist of it.

Bottom line: Are you indispensable? If not, what are you doing about it?

The Laws of Subtraction - Free Preview

2012-09-09T21:48:00.000-05:00

Matt May, the former Toyota consultant and innovation expert, is in the process of writing his newest book, The Laws of Subtraction.

Matt has reminded us over the years that what constitutes an elegant solution is the ability to remove excess detail, and even leave some things unresolved so that users can fill in the blanks. The Laws of Subtraction guide us through three critical choices inherent in every difficult decision in business, work and life:

What to pursue versus what to ignore?
What to leave in versus what to leave out?
What to do versus what to don’t?

You can download a free preview of his new book, were the Laws of Subtraction are discussed:

What isn’t there can often trump what is.
The simplest rules create the most effective experience.
Limiting information engages the imagination.
Creativity thrives under intelligent constraints.
Break is the important part of breakthrough.
Doing something isn’t always better than doing nothing.

In a world were time is limited, it is essential to decide what not to focus on, and just subtract it from your life.

TEDs Top 20 Talks of All Time

2012-09-09T21:33:00.001-05:00

You've probably watched many TED videos before.

If not, TED was a venture started in 1984, as an annual conference with speakers sharing new ideas about Technology and Design. Afterward, it's objective was to promote "ideas worth sharing" about different topics that impact our life, and has featured speakers such as Malcolm Gladwell, Bill Clinton, Larry Page and many other celebrities.

Regardless of your acquaintance with TED videos, it might be worth your while to look at the top 20 TED Videos of all time.

Do you have any ideas worth sharing?

Dan Pink's Inspirational Quotes

2012-09-09T21:25:00.002-05:00

We all need some inspiration from time to time. Need some? Check out the three quotes that author Dan Pink keeps on this wall.

“Live as if you were living already for the second time and as if you had acted the first time as wrongly as you are about to act now.”– Viktor Frankl

“Remembering that you are going to die is the best way I know to avoid the trap of thinking you have something to lose.”– Steve Jobs

“Being a professional is doing the things you love to do — even on the days you don’t feel like doing it.”– Julius Erving

If you haven't read Viktor Frankl's Man's Search for Meaning, please do.

Steaks, Patents, Trade Secrets and Trademarks

2012-07-09T00:45:00.000-05:00

Want to learn the difference between patents, trade secrets and trademarks, using a Vegas Steak as reference? These kind of analogies only happen at Freakonomics, but as usual offer practical ways to learn.

If you are interested in where the Coca-Cola secret recipe falls in the Intellectual Property domain, and if the the rumor that only few executives at the company actually know the recipe is true?

John Wanamaker famously said: "Half the money I spend on advertising is wasted; the trouble is I don't know which half."

Seems the Marketing Execs at Coca-Cola do know which half is working.

Beyond the Jipp Curve

2012-07-09T00:21:00.000-05:00

The Jipp Curve proves that there is a relationship between telephone density (teledensity) and the gross domestic product (GDP) of a country. Back then, data showed that richer countries had higher penetration and use of telephone lines.

With the introduction of Smartphones a little more than decade ago, the Jipp Curve has been turned over its head, and Smartphone growth is spreading faster than any other previous technological innovation. Some other incredible facts, taken from Dan Pink's blog:

In 2006, smart phones accounted for just 6% of U.S. mobile phones sold that year. Today, "smart phones represent more than two-thirds of all U.S. mobile-phone sales."

"In 1982, there were 4.6 billion people in the world, and not a single mobile-phone subscriber. Today, there are seven billion people in the world — and six billion mobile cellular-phone subscriptions." Of those subscriptions, 73 percent are now in the developing world, even though those countries account for just 20 percent of the world's GDP."

Right now the world has 1.4 billion PCs in use. "Mobile phones, on the other hand, are already selling more than 1.4 billion units every single year."

Even if the world's connectedness will continue to bring enormous benefits to mankind, I wonder when being online, all the time, will overwhelm us to the point of saying, enough!

It is incredible to think about how two decades ago, without internet and Smartphones, everything worked well. I guess every generation asks this question at a given point in time.

Means I'm getting old, I guess.

The Secret of Life, According to Steve Jobs

2012-07-08T23:58:00.000-05:00

There are many inspiring speeches out there. From no other than Steve Jobs, I recently watched an obscure interview about life and changes that he gave when he was still working at NeXT, before returning to Apple as CEO.

Some excerpts from the interview:

"When you grow up, you tend to get told that the world is the way it is and your life is just to live your life inside the world, try not to bash into the walls too much, try to have a nice family, have fun, save a little money. That's a very limited life. Life can be much broader, once you discover one simple fact, and that is that everything around you that you call life was made up by people that were no smarter than you. And you can change it, you can influence it, you can build your own things that other people can use. Once you learn that, you'll never be the same again.

"The minute that you understand that you can poke life and actually something will, you know if you push in, something will pop out the other side, that you can change it, you can mold it. That's maybe the most important thing. It's to shake off this erroneous notion that life is there and you're just gonna live in it, versus embrace it, change it, improve it, make your mark upon it. — Steve Jobs

Steve Jobs could have been a certified jerk, but his relentless focus on doing things with the potential to change the world, is admirable.

I just hope more of us had his vision and courage.

Don't Break The Chain!

2012-07-08T23:46:00.001-05:00

Turns out Seinfeld was not only brilliant at comedy, but also at suggesting a simple tool that can make your life more productive.

It has even become an iPhone app, which I recently downloaded, and started to test. Aptly titled Wonderful Day, you can take a look at the introductory video to understand how it works. I'm planing on using it for getting disciplined on daily blogging, daily reading and healthy eating.

I can imagine Seinfeld's voice reminding his audience: "don't break the chain!".

If Seinfeld's methodology doesn't work, you can always use Charles Duhigg's habit changing methodology, which is simple and effective.

How disciplined are you in the things you want to achieve? Are you breaking the chain?

Measuring Wizards

2012-07-08T23:32:00.000-05:00

Charke Ching, a TOC colleague recently wrote a humorous short story about wizards and quality, in an attempt to illustrate the possible consequences of applying the concept of "you can't manage what you don't measure" combined with the Law of Unintended Consequences.

Clarke's story reminds me of Eli Goldratt's famous phrase:

"Tell me how you measure me and I will tell you how I will behave", or the flipside "If you measure me in irrational ways, do not complain if I behave irrationally".

Long story short: be careful what you measure and what you reward.

A critical skill of any effective manager is the ability to bring out the best of people, by identifying what specific behaviors are productive to the organization, and then reinforcing them and rewarding them appropriately. It is the systematic application of this reinforcement process, along with a rewarding environment, that can propel your organization to superior levels of performance.

What are the key things you measure in your organization? How is that working for you?

Guess Who's Back?

2012-07-01T17:04:00.000-05:00

After some weeks of handling delicate family matters, ending some previous projects and starting some new ones, I am "back in business".

Even if this blog was created initially for my personal development, it is good when a friend asks you where have you been and when you'll be back.

Thanks to all for reading. And please give me feedback, to continuously improve!

The Icarus Deception, a Godin Kickstarter Project

2012-07-01T16:35:00.001-05:00

It all started with the Domino Project, an initiative for authors based on the assumption that when you have a tribe, or group of people following you, publishing your work under a different model may work, and big advances, publishers and brick and mortar bookstores may not be necessary.

Seth Godin's latest initiative expands on his previous work, and is based on the following assumptions:

You have a "tribe" of people that follow you, respect you, and are eager to know and share your thoughts

Your tribe is big enough to help you fund and launch projects, in exchange for something special in return, such as a special edition of a book, exclusive interview, or others

Brick and mortar distribution will work in your favor, expanding on the initial efforts of your tribe

The book to be published under this format is called the Icarus Deception, launched as a Kickstarter Project. It was funded in record time, just a few hours, showing how big Godin's tribe is. With this book, Godin will try to challenge the notion that you need to convince the publisher of a new book idea before publishing a book, instead of convincing your audience and by default, your publisher.

Do you have a big enough tribe? Find something you are good at, and start building it slowly over time. This is one of the biggest asset you'll have in the long run.

The Dip, Revisited

2012-07-01T16:15:00.002-05:00

For all of you that like Seth Godin and his thoughts, The Dip is one of his bestselling books, talking basically about when it's time to quit something you are doing...or stick with it until you make it.

Some excerpts (paraphrased) from his book:

The famous phrase, "winners don't quit", is jut wrong.
Winners quit, the right things, at the right time, all the time.
Quit the wrong stuff, stick to the right stuff. Have the guts to do just this.

If you want a short audio introduction of the Dip, listen here.

Jim Collins has some thoughts along these lines too, with his New Year's Resolution Stop Doing List, where he advice readers to stop doing stop that make you lose focus on what you really want, as time for all of us is the scarcest resource and limited.

So, how good are you at quitting? Are you focusing on the right things?

You're Not Special

2012-07-01T16:08:00.000-05:00

We have all heard famous high school and graduation commencement addresses, and some become internet phenomenons such as Steve Jobs' "Stay Hungry Stay Foolish". It's difficult to find a really inspiring graduation speech, isn't it?

David McCullough, an English teacher at Wellesley High School recently gave an inspiring speech to the summer high school graduates. In his speech, titled "you are not special", David suggests that with so many people in the world with your same qualifications, we are all basically a commodity, regardless of the Lake Wobegon effect. It all boils down to how much you care, and if that inspirations follows you for a long enough time, to get over the the Dip.

Are you still a commodity? How many people are knocking on your door, begging you to work for them?

The Executive and The Consultant

2012-07-01T15:23:00.005-05:00

For all of us who have been both independent consultants and employees, the Deming impersonator Mike Micklewright explains the difference between both roles very clearly.

For some of us, the ever lasting conflict between security (having a stable job) and satisfaction (attempting to solve problems in a wide variety of industries) is not easy to break. Some find other income generating activities, others work as internal consultants for companies, others find jobs as consultants. Having a job also does not guarantee stability, and can sometimes make your mind "dormant", as you become used to a job's procedures and processes.

The key is to never lose the "consultant mindset", regardless of what you do for a living. Look at things from a higher perspective. Always think and make decisions as if you were the owner of the company. Constantly read about new things, share, learn. Experiment, Learn, Experiment again. Tap into the wisdom of crowds. Ask why constantly. Give yourself time to reflect and think.

We all have a consultant mindset. How often do you use it?

The Constanza Principle

2012-07-01T15:12:00.001-05:00

There is a famous Seinfeld Episode where George Constanza starts doing the opposite of what his inner mind suggested. After adopting his contrarian view on life, Constanza starts being very succesful in most of his endeavors.

Now, we all now the "lizard brain" or amygdala is there since evolutionary times to protect you from danger and to protect your family...but every once and again it may be good to stop listening to it, as hyenas and other dangers are not as common as before.

How often do you listen to your lizard brain? What if you said yes, instead of no?

Standing On The Shoulders of Giants

2012-06-05T07:36:00.000-05:00

This week I am at the yearly TOC ICO in Chicago, understanding the latest development in Theory of Constraints and meeting good friends and colleagues. It will be the first conference without Eli Goldratt, and the conference theme has been based on one of Eli's last ideas, which is based on the famous Newton quote: "If I haven been further it has been because I have been standing on the Shoulders of Giants".

Last year, Eli G developed a process to help TOC practitioners to improve the current body of knowledge. The basic (summarized) version is the following:

1. Identify a Giant, or a current solution that you want to expand on
2. Identify the Area Not Addressed by The Giant, or the new area you want to expand the solution into
3. Get on the Shoulders, using previous effective concepts that have worked well in the past
4. Identify the Conceptual Difference, or have the courage to identify "inconsistencies" between expected results and current results in the new area that you want to expand the solution into
5. Identify the wrong assumption, or check which of the current assumptions that the solutions uses is not valid in the new area of application
6. Conduct the full analysis, or do your due diligence

Although the process is a little difficult to grasp at first, the basic idea is that when you are trying to improve a particular solutions for a problem, try to find the instances where it is not working (untouched area), find why it is not working (wrong assumption) and expand the solution, using previous knowledge.

Improving and finding better solutions is not easy, but as Eli Goldratt used to say:

Do you want an easy life or a meaningful life?

The Power of Reflection

2012-06-04T18:09:00.001-05:00

Reflection after the fact is not a popular practice among western management. True, meetings to analyze results are held, but are root causes identified? Or is it an exercise in finding the best excuse possible to explain results we don't understand?

Management gurus have implicitedly suggested reflection in their general approaches to continuous improvement. Some examples could be (in bold the reflection part of the process):

Deming, with the Plan-Do-Check-Act
John Boyd, with OODA, Observe, Orient, Design, Act
Eli Goldratt, with the Five Focusing Steps, warning of inertia in Step 5.

Matt May recently described the reflection process that the former and very successful NY chief of police William Bratton used to apply with his team. Initially developed by the US Army, the method is called an After Action Review (AAR), and some of the main principles are the following:

It is mandatory and held after a key milestone, to check the effectiveness of a strategy, tactic or action
It reviews both expected and unexpected effects that were observed in reality, regardless of if they were positive or negative in nature
Three basic questions are asked to understand the results: what was supposed to happen, what actually happened, how do we account for the differences.

The analysis of expectations versus results is ingrained in the Toyota Culture, as part of the kata that everyone must follow. The late Eli Goldratt also placed great emphasis to understand the cause and effect of environments, and particulary when surprises, or gaps between expectations and results happened. He used to tell the story of a fashion clothing manufacturer that sold all the collection they had launched early in the season. Management was very excited as this had been a great success. But then Eli reminded them that what it meant was they had run out of stock, and were unable to replenish as quickly as possible, and if this could have been done, sales would have been significantly larger. This insight caused the management to reflect about these kinds of situations, and redefine their criterias of success.

So, do you reflect on what your actions and the gap between expectations and reality? If so, what can you improve?

Math52, a Kickstarter Project for Learning Math

2012-06-01T08:16:00.000-05:00

Who said math should always be a boring subject? Enter Math 52, a project currently being funded in Kickstarter:

From Math's 52's pitch in Kickstarter:

"According to a Raytheon study, 61% of middle school students would rather take out the garbage than do their math homework, and teacher job satisfaction is at its lowest point in over twenty years. Students and teachers are hungry for something new...but not everyone knows what that looks like."

Math52 intention is to teach Math through weekly videos, using concepts that are easy to relate to:

How far would you have to run to burn off a Big Mac?
Do people with small feet pay too much for shoes?
Is it ever a good idea to buy AppleCare...
...and what can this tell us about health insurance?

Although the platform used for teaching isn't very different than the other multiple online education alternatives, what's interesting is their way of approaching subjects, which on first hand seems to have behavioral economics related subjects and use a style similar to Steve Levitt and Stephen Dubner, the authors of Freakonomics.

Do you have an idea you could launch using Kickstarter? What are you waiting for?

Raising The Bar, Constraints and Creativity

2012-05-31T01:00:00.001-05:00

The late Eli Goldratt, founder of the Theory of Constraints, proposed that in order to find innovate ideas to improve a situation, you should raise the targets or objectives significantly. As an example, if you were the manager of a company and needed to increase sales, what kind of responses do you think you would you get when asking the following questions to your team:

How do we increase sales by 10%?
How do we increase sales by 100%?

To answer the second question, a totally different mindset, probably a paradigm shift, is required. Complemented with positive reinforcement measurements, the approach should be effective.

Tina Seelig, of Stanford University's Technology Ventures, offers an alternative approach to get the creative juices flowing: change the constraints. Although Tina is using the word constraint in a way similar to linear optimization, the idea is to impose less flexible rules, which usually means limiting the amount of resources available, so that there is no other choice than two think in alternative (and possibly counter intuitive) ways of solving problems.

Her approach reminds me of the situation Toyota had after the second world war, and when the company was in a disastrous financial position. Under severe cash limitations, the company had to figure out how to make quality cars, at a low cost, and had them available when the customer needed them. The rest, as they say, is history.

So, in what ways are you motivating your team to find creative solutions? Are you raising the bar, limiting the available resources, or both?