Monday, October 31, 2011

Steve Jobs: never be embarrassed about working hard, no matter what the result

From Mona Simpson's eulogy for her brother Steve Jobs:

He was never embarrassed about working hard, even if the results were failures. If someone as smart as Steve wasn’t ashamed to admit trying, maybe I didn’t have to be.

Kahneman: "What you see is all there is"

Here's another great excerpt from Nobelist Daniel Kahneman's new book, "Thinking, Fast and Slow," via the New York Times Magazine. Here, Kahneman discusses his Israeli army assignment of assessing leadership candidates on the basis of a group exercise, an assignment that the group learned, to its dismay, did little to predict future leadership success:

Despite our certainty about the potential of individual candidates, our forecasts were largely useless. The evidence was overwhelming. Every few months we had a feedback session in which we could compare our evaluations of future cadets with the judgments of their commanders at the officer-training school. The story was always the same: our ability to predict performance at the school was negligible. Our forecasts were better than blind guesses, but not by much.

We were downcast for a while after receiving the discouraging news. But this was the army. Useful or not, there was a routine to be followed, and there were orders to be obeyed. Another batch of candidates would arrive the next day. We took them to the obstacle field, we faced them with the wall, they lifted the log and within a few minutes we saw their true natures revealed, as clearly as ever. The dismal truth about the quality of our predictions had no effect whatsoever on how we evaluated new candidates and very little effect on the confidence we had in our judgments and predictions.

I thought that what was happening to us was remarkable. The statistical evidence of our failure should have shaken our confidence in our judgments of particular candidates, but it did not. It should also have caused us to moderate our predictions, but it did not. We knew as a general fact that our predictions were little better than random guesses, but we continued to feel and act as if each particular prediction was valid. I was reminded of visual illusions, which remain compelling even when you know that what you see is false. I was so struck by the analogy that I coined a term for our experience: the illusion of validity.
I had discovered my first cognitive fallacy.

Decades later, I can see many of the central themes of my thinking about judgment in that old experience. One of these themes is that people who face a difficult question often answer an easier one instead, without realizing it. We were required to predict a soldier's performance in officer training and in combat, but we did so by evaluating his behavior over one hour in an artificial situation. This was a perfect instance of a general rule that I call WYSIATI, "What you see is all there is." We had made up a story from the little we knew but had no way to allow for what we did not know about the individual's future, which was almost everything that would actually matter. When you know as little as we did, you should not make extreme predictions like "He will be a star." The stars we saw on the obstacle field were most likely accidental flickers, in which a coincidence of random events - like who was near the wall - largely determined who became a leader. Other events - some of them also random - would determine later success in training and combat.

I see this every day: "We had made up a story from the little we knew but had not way to allow for what we did not know." And leaders are the best creators of stories out of this limited information - whether or not they are true. They are also powerful and persuasive. This is how delusion expands from individuals, to groups, to entire corporations.

Saturday, October 29, 2011

Jonah Lehrer: it's important to find "the upside of error"

Jonah Lehrer takes up our favorite subject in his Wall Street Journal Saturday column ("The Art of Failing Successfully"). He refers to the work of Carol Dweck (of course), and includes this nugget:

The psychologist David Nussbaum has shown that whether we tend to learn from mistakes or brush them aside, the response is rooted in repairing our self-esteem. Failure is never fun, but success requires that we learn to fight through our frustration and find the upside of error.

Lehrer also refers to this Bob Dylan song that contains the lyric, "there's no success like failure, and failure's no success at all." Enigmatic, just like its creator!

Thursday, October 27, 2011

"Corrections are more heartwarming than perfections"

From the terrific "You're the Boss" small business blog on the New York Times website, a quote from restaurant owner Bruce Buschel, reflecting on what he has learned from his first year in operation:

After seeing it firsthand, over and over, I actually believe what I have been preaching, that every misstep is an opportunity to deepen the connection to the guests. Corrections are more heartwarming than perfections.

Wednesday, October 26, 2011

Manolo Blahnik's big error - crepe heels create "strange movements"

This story is from shoe designer Manolo Blahnik, as published in Newsweek's "My Favorite Mistake" series:

The first time I had a major mistake was due to my inexperience. In 1972 I was invited by Ossie Clark, one of the biggest designers on earth, to do this collection at the Royal Court Theatre in London. I made these divine, fabulous heels. I think it was my first shoe, actually. They were royal-blue suede with acid green inside, and a sole made of crepe rubber, which is beautifully white. It’s like walking on snow, but in rubber.

For the heels not to bend, they needed a steel spine inside. I didn’t realize that. So here we are. The fashion show started. Everybody in London was there. It was extraordinary to see all these models coming down the runway. I looked down and saw all the shoes going—boom, boom boom! The heels were moving around and bending. The models were moving in such a strange way. It was movements you’ve never seen before, even in the sirens of Hollywood in the ’40s. I thought, “Oh, my God, this is the end of my career definitely. Tonight, it’s finished.”

It was humiliating for me to see what happened at my first fashion show. But when it ended, people came up to me and said, “Congratulations. This is divine! Those shoes are great. It’s sexy. Blah blah blah.” I didn’t see it that way—I thought it was a horrible thing.

But people loved it. People thought, “How strange. How original.” Mr. Clark was in heaven. Even Cecil Beaton, the English photographer, said to me, “Oh, you do create some strange movements.” And indeed, it was strange. I think they liked it because of the way the girls walked, so insecure and swaying around in the bottoms.

Tuesday, October 25, 2011

Nobelist Daniel Kahneman: "Experts may be in the grip of an illusion"

The field of behavioral economics, basically unknown thirty years ago, has had a profound influence on management, negotiations, marketing and many other fields [sadly, it seems to have had less influence on economics, a subject that sorely needs some shaking up]. The dean of behavioral economics is Daniel Kahneman, recipient of the Nobel Memorial Prize for Economics in 2002 along with Vernon L. Smith.

Behavioral economics upends traditional economic thinking by asserting that people are not rational actors - instead they are composed of biases, blind spots, evolutionary holdovers and other components that get in the way of logical thinking. As a result, we act in ways that seem perfectly sensible to us, but bewilderingly mysterious to others. These defects (or so Mr. Spock would call them) contribute to both our making mistakes and failing to learn from them.

Kahneman has a new book, "Thinking, Fast and Slow," which was excerpted in the New York Times Magazine. In the excerpt, Kahneman relates a story from his long-ago assignment with the Israeli military, in which his team of psychologists were unable to predict leadership qualities based on a field test designed to establish exactly that. Notice below that true expertise involves humility - recognizing mistakes quickly and absorbing those lessons, again and again. [There's a simple name for this process: "experience."]

We often interact with professionals who exercise their judgment with evident confidence, sometimes priding themselves on the power of their intuition. In a world rife with illusions of validity and skill, can we trust them? How do we distinguish the justified confidence of experts from the sincere overconfidence of professionals who do not know they are out of their depth? We can believe an expert who admits uncertainty but cannot take expressions of high confidence at face value. As I first learned on the obstacle field, people come up with coherent stories and confident predictions even when they know little or nothing. Overconfidence arises because people are often blind to their own blindness.

True intuitive expertise is learned from prolonged experience with good feedback on mistakes. You are probably an expert in guessing your spouse's mood from one word on the telephone; chess players find a strong move in a single glance at a complex position; and true legends of instant diagnoses are common among physicians. To know whether you can trust a particular intuitive judgment, there are two questions you should ask: Is the environment in which the judgment is made sufficiently regular to enable predictions from the available evidence? The answer is yes for diagnosticians, no for stock pickers. Do the professionals have an adequate opportunity to learn the cues and the regularities? The answer here depends on the professionals' experience and on the quality and speed with which they discover their mistakes. Anesthesiologists have a better chance to develop intuitions than radiologists do. Many of the professionals we encounter easily pass both tests, and their off-the-cuff judgments deserve to be taken seriously. In general, however, you should not take assertive and confident people at their own evaluation unless you have independent reason to believe that they know what they are talking about. Unfortunately, this advice is difficult to follow: overconfident professionals sincerely believe they have expertise, act as experts and look like experts. You will have to struggle to remind yourself that they may be in the grip of an illusion.

Monday, October 24, 2011

From "The Progress Principle," face mistakes squarely

"The Progress Principle: Using Small Wins to Ignite Joy, Engagement, and Creativity at Work," by Teresa Amabile and Steven Kramer, is the best business book I've read in a long, long time. The authors studied 12,000 diary entries, which tracked hundreds of workers across numerous working groups within several companies, and developed a fascinating and surprising picture of employees' "inner work lives"-- how they perceived themselves, their work, their leadership and companies. The crucial finding is reflected in the book's title: the most significant contributor to a rich and happy inner work life is continual progress (even modest progress) toward goals--the "progress principle."

The book is not about mistakes or learning from mistakes, but our favorite subject makes more than one appearance. Here's a short excerpt:

No matter how skilled people are, or how well designed and well executed the projects, problems and failures are inevitable in complex, creative work. We found that inner work life was much more positive when problems were faced squarely, analyzed, and met with plans to overcome or learn from them. Inner work life faltered when problems were ignored, punished, or handled haphazardly.

Learning from success mattered, too. Our participants' thoughts, feelings, and drives fared better when successes, even small ones, were celebrated and then analyzed for knowledge gained. They fared worse when success was ignored, or when its true value was questioned. [p 106]

Sunday, October 23, 2011

Reed Hastings reflects on Qwikster & pricing controversies

Netflix CEO Reed Hastings has come in for a lot of criticism in 2011. Whether or not you agree with Hastings' strategic moves and tactics around the future of Netflix' DVD-by-mail and movie-streaming businesses, watching the process unfold in public view is a rare and educational experience. In this interview in the New York Times Magazine, Hastings reflects (pretty soon after the fact) on the decisions he made and the fallout that ensued:

You really botched the handling of the DVD spinoff, Qwikster. In your recorded launch announcement, you flubbed your lines. You somehow neglected to secure the Qwikster Twitter handle. Then, facing a backlash from shareholders and consumers, you put the kibosh on the whole idea. Seriously, what’s the deal?
Over the last couple of years, we’ve been moving toward streaming, doing the Starz deal, doing the Xbox deal. We simply moved too quickly, and that’s where you get those missed execution details. It’s causing, as you would expect, an internal reflectiveness. We know that we need to do better going forward. We need to take a few deep breaths and not move quite as quickly. But we also don’t want to overcorrect and start moving stodgily.
Last month, when announcing Qwikster, you apologized for the way Netflix handled its price hikes, writing, “In hindsight I slid into arrogance based upon past success.” But wasn’t introducing Qwikster the way you did the most arrogant move of all? 
No, I think it was just a mistake in underestimating the depth of emotional attachment to Netflix.

Friday, October 21, 2011

Tim Harford describes "chasing losses" and other cognitive processes that impede learning from mistakes

There's a terrific excerpt from Tim Harford's book "Adapt: Why Success Always Starts with Failure" on the Co.Design blog. Harford discusses several traps in learning from mistakes, and uses choreographer Twyla Tharp's experience with her show "Movin' Out" as a frame to discuss how these traps work, and how Tharp avoided them. An excerpt of the excerpt:

The first of those quirks leads to denial. It’s why Sir James Crosby sacked Paul Moore rather than accept his valid critique of the bank, why Joseph Stalin ordered Peter Palchinsky to be killed for his correct analysis of the great Soviet engineering projects, and why Donald Rumsfeld forbade his senior general to use the accurate word “insurgency.” It seems to be the hardest thing in the world to admit that we have made a mistake and to try to put it right....

The second trap our minds set for us is that we chase our losses in an attempt to make them go away. [Editor's note. Anyone who has gambled in a casino knows of this pitfall.] Recall Frank, the luckless contestant on Deal or no Deal: having discarded the box containing half a million euros, he proceeded to reject ever more reasonable offers from the Banker until he ended up with next to nothing. All because, to quote the psychologists Kahneman and Tversky, he had not “made peace with his losses.”...

The final danger Tharp avoided is one we might call “hedonic editing,” borrowing a term coined by Richard Thaler, the behavioral economist behind the book Nudge. While denial is the process of refusing to acknowledge a mistake, and loss-chasing is the process of causing more damage while trying to hastily erase the mistake, hedonic editing is a subtler process of convincing ourselves that the mistake doesn’t matter.

Related posts:
Tim Harford challenges us to "make good mistakes."
Twyla Tharp on the usefulness of failure

Thursday, October 20, 2011

Opposing Views: Netflix restructure - bold embrace of the future or customer debacle?

It can be very rewarding to look at a mistake from multiple viewpoints. How would an optimist view this situation? A pessimist? When is a mistake not really a mistake?

Netflix' recent moves to decouple their streaming and video-by-mail businesses & raise their prices yielded some very interesting interpretations. Here are a couple of noteworthy ones.

From Dan Frommer on

The future of Netflix’s business is streaming video — not mailing plastic discs to your home. So the businessmotivation behind Netflix’s move to split its DVD rental business off as Qwikster is clear. If it allows Netflix to focus on the future, this decision could pay off big, and people will someday laugh and joke about this weird transition.

From Jason Gilbert in the Huffington Post:

The embattled CEO of Netflix has done a good, smart, honorable and difficult thing by axing Qwikster. He has shown that he is not insensitive to the demands and grievances of his customers, and that he is not afraid to admit, in public, that he has made a mistake. There is also the possibility that the most exciting development from Qwikster--namely, that Netflix would be getting into the video game business--is still on: A Netflix representative told tech blog SplatF that the company is "still considering" renting out games. Good for them, and good for Hastings.

What is not good for them, or good for Hastings, is that the existence of Qwikster is not an awful collective nightmare that will vanish upon waking. The very real Qwikster debacle is still a reality, as is the bungled price hike and aftermath. The misstep suggests to the public that Hastings is out of touch with what his customers want, a perception that a CEO cannot afford to have. It was a smart decision to mercy-kill Qwikster as quietly as possible before launch--even if it did prevent the rubber-necking American public the catharsis of watching it fail--though Netflix is still a damaged, blemished company in the wake of Hastings' four months of mistakes. Hastings has righted his wrong, but he has not elevated the company back to that high point of consumer confidence where it once so comfortably lived.

As with any major strategic move, a final grade can't be assigned for years, and only with the benefit of hindsight will we either "laugh and joke" about the meaningless static around this move, or mourn what Netflix could have been if they hadn't screwed up so badly. So, check back here in 2015 and see who was right.

[Image from Francis Carnauba via Flickr Creative Commons]

Wednesday, October 19, 2011

Scott Anthony cites "strategy gurus to avoid" - including himself!

In a great post on, Innosight's Scott Anthony pricks the bubbles of highfalutin strategy gurus:

About a year ago I miscalculated — badly — on the Microsoft Kinect. In terms of speed of adoption, only Apple's iPad has rivaled the Kinect. Aside from some tough comments on my blog, the long-term repercussions were low. That's pretty much what happens to a pundit who gets it wrong — nothing.

And this:

The non-user. This pundit makes bold predictions about a product or service he's never used. Remember, a wide gulf separates a corporate press release or a carefully scripted demo and in-the-field reality. I ran into this trap when I started getting excited about Research in Motion's Playbookbefore the product had even been officially launched. The product's performance didn't live up to early press releases and has struggled in the market.

Finally, this:

The freeze framer. Back in 2005 I wrote a piece [PDF] looking at a new video recorder introduced by Pure Digital Technologies, the Flip. I said the simple, easy-to-use product had one fatal flaw — customers had to drop it off at drugstores to get videos processed. How many would do that, I wondered? The mistake I made was assuming that Pure wasn't already working on its second version, which featured a simple mechanism to load video onto computers. The company took off and was ultimately acquired by Cisco for hundreds of millions of dollars. (Cisco strangely shut down Pure Digital this year, but that's a different story.) Markets are dynamic, and if pundits don't take the long view they can make mistakes. 

How cool is it that Anthony is comfortable enough in his own skin to base a blog post on his bad predictions?

Tuesday, October 18, 2011

With all these backup systems, there's still a single point of failure

TechCrunch reported this about RIM's explanation for the worldwide email delivery issues in October 2011:

RIM held a quick press conference call today to address the ongoing outages which started in Europe but have spread to the rest of the world, including the US. The message was straightforward: a “core switch failure” in their European unit (though they did not give the exact location) that failed to turn over to one of the backup systems. The total failure resulted in a backlog of messages that they are chewing through at this moment.

So RIM had backup systems, but they were dependent on a "core switch" - ostensibly a single one - to do its job. This story reminded me of an experience I had a few years ago.

My company had contracted with a large hosting provider for data center services. The company touted their highly secure building, bulletproof systems, redundant power & network, and backup diesel generators. We signed up and felt fully protected.

A few months later, a massive snowstorm hit the town where the data center was located. The electricity went out soon after the storm started. A few hours later, our servers went down. What happened?

We found out the next day, after we came back online, that a technician had noticed fuel leaking from the diesel generator as they prepared to start them up. This was a fire hazard, of course, so the generators remained powered off until the mess could be cleaned up and the fire department could affirm that the generators were safe.

So this facility with redundant everything had, after all, a single point of failure: if fuel was leaking, they couldn't provide backup power. Herein is a lesson for business continuity folks everywhere.

Here's RIM Co-CEO Mike Lazaridis talking about the issue:

Monday, October 17, 2011

"Hey, would you like to help create the World Wide Web?" "No, thanks"

An interesting story from Ian Ritchie, former head of Office Workstations Limited (OWL), an early maker of hypertext software for personal computers, speaking at TEDGlobal 2011. Ritchie describes how he (and several others) were in a position to help Tim Berners-Lee realize his dream of the World Wide Web, but failed to see it Berners-Lee's way and declined to participate. And the rest is history.

Sunday, October 16, 2011

Dan Schneider - a novel way to memorialize a dumb mistake

From Adam Bryant's New York Times Corner Office column. Schneider is CEO of SIB Development and Consulting, a company that helps businesses reduce spending with vendors.

We had an employee who was working on a project for a Fortune 5 company, a major project. He’d been working on it for a month, compiling data, and he didn’t back up his hard drive. So it’s a month’s worth of work, tons of data. We were able to get the hard drive recovered but it cost about $1,500 to have the people recover it. Everybody looked at me like they thought I was just going to fire him or kill him.

And I don’t know where I got the idea, but I just said: “You’ve got to go buy everybody ice cream. We’re having an ice cream party.” Because I realized that if I yell at everybody, they’re just going to figure I’m a jerk. But if we’re all sitting around eating ice cream, everybody knows why we’re eating ice cream — it’s because this guy screwed up. That will set in and they’ll remember it and then just maybe they’ll think, “Oh, yeah. We had ice cream last week. Maybe we should back up our work.” Knock on wood, we haven’t had to recover any more hard drives.

Saturday, October 15, 2011

Wall Street Journal collects 10 CEO video apologies

The Wall Street Journal "Deal Journal" blog has collected YouTube clips of 10 CEO apologies, the most recent being RIM Co-CEO Mike Lazaridis apologizing for the company's lengthy service outage:

You can view the entire collection here.

Thursday, October 13, 2011

Lesson from Steve Jobs: Don't Dwell On Your Mistakes

From "The Power of Taking the Big Chance," a compendium of lessons Steve Jobs' colleagues learned from him, as reported by Steve Lohr in the New York Times:


Steve Capps, a computer scientist, describes creating the Macintosh, which shipped in 1984, as a constant process of making decisions — part experiment and part product development, with steps ahead mixed with many setbacks. “Steve kind of knew what he wanted, but he didn’t precisely,” says Mr. Capps, who designed software for Macintosh.

Mr. Jobs, Mr. Capps remembers, was the arbiter on countless hardware, software and design choices. “His combination of incisiveness and decisiveness, I think, really explained his success,” Mr. Capps says.

Mr. Jobs was also decisive in recognizing mistakes, even when they were his own. For example, he favored one model of a disk drive — for reading computer programs stored on small, removable so-called floppy disks — while other members of the team championed another design. They kept their disk project going surreptitiously. When they showed him the result, he embraced it. “He turned on a dime,” Mr. Capps says. “Don’t dwell on your mistakes. It’s a great lesson.”

Wednesday, October 12, 2011

Tuesday, October 11, 2011

Novartis' Joseph Jimenez: forecasting errors caused by culture, not process

This story, from Novartis CEO Joseph Jimenez via Adam Bryant's Corner Office series in the NY Times, has echoes of Amy Edmondson's research into high-performing hospital teams. Read the story, and I'll tell you what I think the connection is:

Q. What are the most important leadership lessons you’ve learned?

A. One occurred when I was a division president of another company. I was sent in to turn the division around after four years of underperformance. It was a declining business. And when I got there, I completely misdiagnosed the problem. I said: “Look. We’re missing our forecast every month. What’s wrong?” I brought in a consulting firm, and we looked at what was wrong. And the answer was that we had a bad sales and operations planning process, where salespeople, marketing people and operations people were supposed to come together and plan out the next 18 months and then forecast off of that. So I said: “O.K. We’re going to fix this. We’re going to have the consulting team come in and help us make that a better, more robust process, with more analytics.”

And it turned out it wasn’t at all about analytics. Because once we did that, and we put that new process in place, we still continued to miss forecasts. So I thought, “Something’s really wrong here.” I brought in a behavioral psychologist, and I said: “Look, either I’m misdiagnosing the problem or something’s fundamentally wrong in this organization. Come and help me figure it out.” She came in with her team and about four weeks later came back and said: “This isn’t about skills or about process. You have a fundamental behavioral issue in the organization. People aren’t telling the truth. So at all levels of the organization, they’ll come together, and they’ll say, ‘Here’s our forecast for the month.’ And they won’t believe it. They know they’re not going to hit it when they’re saying it.” The thing she taught me — and this sounds obvious — is that behavior is a function of consequence. We had to change the behavior in the organization so that people felt safe to bring bad news. And I looked in the mirror, and I realized I was part of the problem. I didn’t want to hear the bad news, either. So I had to change how I behaved, and start to thank people for bringing me bad news.

Edmondson found that hospital teams with the highest outcomes also had the highest reported incidence of mistakes. When she dug into this paradox, she found that the high-performing teams had the psychological safety to share mistakes so they could be fixed and avoided in the future. The poorer-performing teams tended to cover up their mistakes.

Monday, October 10, 2011

Netflix backs off - a little - from their radical restructuring

This appeared on the New York Times Media Decoder blog this morning:

Abandoning a break-up plan it announced last month, Netflix said Monday morning that it had decided to keep its DVD-by-mail and online streaming services together under one name and one Web site.

The company admitted that it had moved too fast when it tried to spin-off the old-fashioned DVD service into a new company called Qwikster.

“We underestimated the appeal of the single web site and a single service,” Steve Swasey, a Netflix spokesman, said in a telephone interview. He quickly added: “We greatly underestimated it.”

Mr. Swasey said that the Netflix chief executive Reed Hastings declined an interview request. But in a statement, Mr. Hastings said, “Consumers value the simplicity Netflix has always offered and we respect that. There is a difference between moving quickly — which Netflix has done very well for years — and moving too fast, which is what we did in this case.”

Others will likely pile on with criticism of the change, its timing, the original decision, etc. I, for one, respect them for adjusting quickly. And it will be interesting to see what, exactly, Netflix does look like 4 or 5 years from now.

Related post: Reed Hastings: "I messed up" in communicating price increases

Thursday, October 6, 2011

Mistake: Being Too Small. Solution: "Look Bigger"

This post by Scott Weiss of Andreesen Horowitz doesn't dwell on a mistake as much as recovering from one. As a tech startup selling to large enterprises, Scott's company IronPort learned that they were being disqualified from consideration because of their size alone. [This is an issue faced by B2B-focused startups everywhere.] As one prospect stated: “We like what you guys are doing but there’s no way we’d replace the aorta of our communications infrastructure with a beta box from a 20-person startup.”

So: the mistake, as Scott and his fellow leaders determined, was acting small. Now, the fascinating part: Scott goes into great detail about what they did to fix their mistake.

We felt like the little kid that kept getting turned away at the height chart at the rollercoaster—we can handle the ride, just give us a chance! Somehow, we had to find a way to look bigger and more credible quickly. After an intense brainstorming session, we hit upon a really important concept: since perception was reality, any weakness that the customer couldn’t see and couldn’t touch did not exist. By being absolutely maniacal about each of our customer touch points, we would appear to be far bigger than we were. No matter how rinky-dink the “man behind the curtain” was, it didn’t matter because the Great Oz would be massively impressive.

What IronPort did to change how they were perceived included both surface items (website design, business cards, custom faceplates for their servers) and, most profoundly, operational strategies and tactics:

All of these details mattered, but the key to the entire plan to make our little company appear big was to perform like the very best large companies. For us, this meant dramatically beefing up customer care (CC). In general and especially in high tech, CC had been a backwater—treated like a cost center to be minimized. Since this was arguably the most important early customer touch point, we took a completely opposite approach: we treated it like a marketing expense. With a firm belief that this was the primary catalyst for word of mouth, we invested heavily in the entire post-sale ecosystem. Our approach was to answer email inquiries instantly and telephone calls on the second ring with little to no hold time. We concentrated on how to deliver the best possible experience first and then went back and figured out how to cost-optimize it later

To me, it's very instructive that customer service was the key operational area that made IronPort appear bigger than they actually were. Telling the board and investors that they needed to staff up in customer service must have been a difficult discussion. But, as Scott points out, support was the most visible aspect of their service offering to customers; therefore, it needed to be world-class if they were to be viewed that way. I have never read a better business case for excellent customer service before (and I've read a few).

There's more elaboration on all these items in Scott's entire post.

Wednesday, October 5, 2011

Watch the creation of Steven Johnson's book cover - mistakes and all!

A very cool video depicting in time-lapse the creation of the cover of Steven Johnson's book, "The Innovator's Cookbook: Essentials for Inventing What Is Next." It's a great metaphor for the innovation process itself - play, experimentation, failure, adjustment, leading to the end product.

Try to see where a significant mistake arises in the process, and when it's rectified. Fascinating!

Tuesday, October 4, 2011

Should Edison have listened to customers?

Since Steve Jobs' retirement announcement, there has been lots of talk of Apple's mantra that they must lead the customer ("You can't just ask customers what they want and give it to them.").

But here's a story about where listening to customer input would have made a real difference to another innovator, Thomas Edison. Edison's original vision for the phonograph was as a tool to record office dictation. After the device's commercial introduction, users had a different idea. This story is from "The Wizard of Menlo Park: How Thomas Alva Edison Invented the Modern World" by Randall Stross.

Everyone who tried out the phonograph - everyone but Edison, that is - was struck by its beautiful reproduction of music, which it handled far better than the sound of the human voice. [An] article in the Atlantic Monthly that had pointed out the machine's shortcomings as a device for office stenography also heaped praise on its ability to magnify musical sounds without distortion. Although there were very few recorded songs available for sale, the reports from the field showed avid interest among consumers. At the first convention of phonograph dealers in 1890, one distributor reported that one customer was "a crank on the subject," spending as much as $100 a week for musical cylinders (about $2,000 in current dollars).

[Edison associate Alfred] Tate and other Edison associates did their best to persuade Edison of the commercial potential of a phonograph marketed for entertainment purposes, but Edison was so attached to his original notion that the phonograph was best suited to office dictation that he could not let go of it....

Tate speculated in his memoirs afterward that Edison was reluctant to accept the phonograph as a machine for playing music because he did not want his phonograph associated with wind-up music boxes. Edison was dedicated to bringing out "useful" inventions, a mission that would be sullied by its association with something as frivolous as Victorian "toys" marketed to adults.

Edison's phonograph was eventually eclipsed by the Victrola, of course, and the man who invented this amazing technology never made a fortune from it. So this is a lesson in innovation: per Steve Jobs, don't ask customers what they want, but after you let them have a product, watch very carefully what they do with it.

[Photograph via Wikipedia]