I have no patience for bureaucracies that proclaim that they are unable to innovate. It's not that they are unable to do so, it's that they don't want to do so.
The other day as I walked through SFO, I heard live music. Live! Looking over, there was Bart Davenport and his band, playing real good for free. Probably not for free, actually, but collecting plenty of tips in the box out front. They sold a lot of CDs too.
What a great venue. What a service (for Bart, for me, for the airport).
Have you noticed that most airports feature the same restaurants? It's not an accident. The people who run these chains have organized themselves to be good at dealing with municipal organizations.
Same thing goes for design firms, creative firms, accountants etc. that deal with large corporations.
In my experience, 40% of the fee goes for the work and 60% goes to pay for the do-overs, staffing, project management and hassle that comes from working from big organizations and committees.
A lot of small businesses get burned when they charge just the 40% and the client expects that the other 60% comes for free. It doesn't.
If you want to be good at this capability, you can. You can buy it and learn it and then turn around and sell your skill. But it's unlikely you will randomly back into it.
When we talk about quality, it's easy to get confused.
That's because there are two kinds of quality being discussed. The most common way it's talked about in business is "meeting specifications." An item has quality if it's built the way it was designed to be built.
There's another sort of quality, though. This is the quality of, "is it worth doing?". The quality of specialness and humanity, of passion and remarkability.
Hence the conflict. The first sort of quality is easy to mandate, reasonably easy to scale and it fits into a spreadsheet very nicely. I wonder if we're getting past that.
Consider two eggs:
If I go the local diner, I can get a high quality diner egg, over easy. The egg is a standard manufactured egg, created in quantity by drugged chickens in prison. It retails (raw) for about 14 cents. The egg is cooked on a griddle the way it always is, a grill neither spotless nor filthy, covered with a sheen of slightly old oil. It's cooked on one side until set, flipped for a few seconds, put on a plate, given a shake of iodized salt and served, usually with a piece of generic white bread toast.
This is the regular kind. The kind most people grew up with. Easy to produce on demand, reliable and expected.
If I make an egg at home, I'll use a free range egg from the farmer's market, which I'll happily pay 39 cents for. This egg tastes like an egg, and the extra money pays for a local farmer and a (slightly) happier chicken. I'd cook it in a very hot cast iron skillet with really tasty olive oil, and I'd leave it in longer until it gets crisp around the edges, then I'd put some David's salt on it (which, due to its pointy edges, in fact does taste better). All told, it costs about thirty one cents more altogether.
This is the undependable kind. You might not be able to get the eggs. Cleaning the pan is more work too. But this is a remarkable egg, an egg worth talking about, an egg worth crossing the street for, an egg worth writing about.
If you can do this to an egg for thirty cents, imagine what happens when you bring the same approach to quality to your job.
How do you get your boss to approve something, the customer service people to understand the pain a system is causing or the folks in engineering to see things your way?
Powerpoint was invented for this precise function, and we all know what’s become of that.
Here’s a new way that’s extraordinarily effective: Make a video.
Take a Flip or cheap video camera and interview your customers. Ask them questions and show the answers to your team. Ji Lee at Google masterminded this man on the street interview:
Invest an hour and suddenly, it’s not you who’s talking, asking, complaining or being ignorant. It’s your customers.
How big is the gap between customer and die-hard fan? In other words, between engaging and loving, between attending and craving?
For World of Warcraft, it's huge. It's very difficult to spend just an hour or two. There's a chasm between encounter and enjoyable experience. Tetris was oriented in precisely the other way–everyone who tried it instantly became almost as smart as an expert.
If you want to be an insider at the Four Seasons restaurant, you might have to go thirty times and spend $3,000 over time. There's a barrier to becoming an insider.
For Star Trek, not so much. After one TV episode, you might not know a Tribble from a Romulan, but you've probably figured out the whole Vulcan thing. Much more approachable, much easier to fake your fanhood.
There are very few products, services or organizations that are simultaneously easily approachable and quite deep. That's an opportunity for you if you can figure out how to be both, but choosing just one is a more likely scenario. So, which are you?
The best businesses and the best projects are a quantum leap above the competition. This gulf represents competitive insulation, because others can't figure out how to get up there with you.
Amazon, for example, has a leap between it and other online retailers. Sure, you might be able to mimic part of what they've got, but the gulf is so huge, it's hard to imagine displacing them any time soon.
Nike has spent billions on advertising, sponsorship, manufacturing, technology and distribution. It's a quantum leap between them and some start-up that wants to compete.
I think going for the leap is essential for creating a business for the ages, and I want to speculate that there are three ways to make it:
BUY IT–you can raise a lot of money or spend a lot of the company's R&D or marketing money and just buy yourself a huge head start and this provides insulation. (This is my least favorite, because spending like a drunken sailor often leads to other drunken behaviors, including remorse the next day).
SNEAK UP THE CURVE–you can quietly develop your business fairly cheaply and then, by the time the competition notices you, it's too late. Build a Bear Workshop is a great example of this. One store at a time they built a brand, a cash flow and a nationwide footprint that makes it awfully difficult for others to compete. McDonald's did the same thing.
THE NETWORK EFFECT–some markets are ready for one (and usually only one) intermediary to show up and be the default winner. Twitter and Comdex and Alexander Graham Bell are great examples of this.
There are probably some others (like make a genius innovation in your basement and then patent it) but these three are good ones to start with.
We frequently confuse internal biochemistry (caused by habits and genetics) with external events. If we didn't, marketing wouldn't work nearly as well.
Our brains are busy processing chemicals that internally change our moods, but find a way to rationalize those mood changes based on events and purchases in the outside world. We often act as though money can buy joy, but of course, it works better when we're joyful in the first place.
We don't say, "I'm genetically pre-disposed to mild depression," or "I haven't exercised in a while and I spend a lot of time watching TV," instead, we say, "I'm disappointed because I don't make enough money and my boss is mean to me." And yet, someone in the very same circumstances seems much happier than we are. And somehow, nothing ever happens in our career that makes everything all right forever.
We don't say, "I'm grouchy because of hormones." Instead, we say, "He deserved that outburst. He was being a jerk." Of course, he was the same guy last week and you sort of liked him.
We don't say, "When I dress and act like the people around me, I can feel safe as a member of their tribe." Instead, we think, "I feel good when I'm with my friends."
We don't say, "I have a very complex relationship with money because my parents spoiled me." Instead, we say, "Hey, the bank gave me a credit card so it's okay to buy things that I deserve."
We don't say, "I eat to drown out the way I feel about my mom," instead we say, "Hey, if it's on a salad bar, it must be good for me. And anyway, next month is my birthday."
The external world is remarkably consistent, and yet we blame it for what's going on inside of us. People who think the world is going to end always manage to find a new thing that's going to cause it to end. People itching to be bummed out all day long will certainly find an external event that give their emotion some causal cover. The thinking happens long before the event that we blame the thinking on.
Products are remarkably similar, yet we use their marketing stories as an extension of our self-image and self-esteem. Should a new phone really make you that happy?
Colleagues are almost always trying to work with us, yet it's easy to blame them when anxiety about other events triggers time-honored patterns in our behavior.
Hang out at the mall two weeks before the prom. Can those items on the rack really pacify the raging anxieties of the teenagers waiting to buy them (or is the social triggers that do it)? Watch McKinsey doing a multimillion dollar consulting gig for a Fortune 500 company. Are they really telling the board something that couldn't have been discovered by a few talented folks in the finance department? Or are they paying for peace of mind?
Marketers spend billions of dollars identifying common biochemical events, and then they launch products and services with stories that align with those events. As a result, we spend money on external forces in an attempt to heal internal pain. Marketers want the equation to be, "if you buy this, everything will be all right."
The reason the New York Times matters isn't about the delivery of news (it's old by the time it arrives) or even the analysis (which is often spotty or wrong or banal or biased or boring). No, the reason it matters is because everyone else reads it.
That's the reason certain trade shows matter.
Or industry journals or blogs.
You can change the definition of "everyone" and customize it for your industry or passion, but the fact is, we need to read what everyone else is reading in order to have a sense of being in sync. If it's in there, it matters, because everyone else read it.
If a publication like this doesn't exist, go ahead and create it, because you'll profit.
The internet eliminates the friction and the barriers that made it natural for there to be just a few media outlets per sector. This change led to an explosion in choices. But as things settle down, we're busy searching for the thing that 'everyone else' who matters reads.
The moment 'everyone else' stops reading Conde Nast magazines or Publishers Weekly or other trade journals, they fold. It'll happen almost overnight, because reading them in isolation, without a connection to the community just isn't worth it.
On July 4, birthday of the USA, we're supposed to blow off fireworks, eat hot dogs and buy a Chevrolet.
On Columbus Day, birthday of an early imperialist, we're supposed to shop and march in a parade.
On Martin Luther King Jr. day, marvelously, we're supposed to participate in a national day of service.
So, what should we do on your birthday?
With all due respect to Hallmark, the idea of sending people cards and presents on their birthday seems both selfish and small-minded. It seems to me that we could think bigger.
On the birthday of your company or brand, what would you like your customers to do?
On your birthday, what should your friends do? Let's say you have a shoe buying fetish. Perhaps on your birthday, your friends could buy shoes–for themselves, not for you. Share the joy, right? Or perhaps buy shoes for their friends?
On my birthday, it would make me really happy if people started a project, launched an idea or engaged in a difficult interaction that made something good happen. Make a difference day.
The bike shop is busy in June. If you bring your bike in for a tune up, it will cost $39 and take a week.
A week!
What if someone says, "I have a bike trip coming up in three days, can you do it by then?"
At most bike shops, the answer is a shrug, followed by, "I'm sorry, we're swamped."
The problem with telling people to go away is that they go away. And the problem with treating all customers the same is that customers aren't the same. They're different and they demand to be treated (and are often willing to pay) differently.
So, why not smile and say, "Oh, wow, that's a rush. We can do it, but it's expensive. It'll cost you $90. I know that's a lot, but there you go."
Outcome: Maybe they'll still leave. But maybe they'll happily pay you for the privilege of doing business with you. Why should this be your choice, not theirs?
If you do tax accounting for mid-size businesses, why not offer a special last-minute service? A service in which you process shoeboxes filled with unsorted papers? A service that costs less but happens during your slow season?
There are two really good reasons to turn down special requests:
1. because you're marketing yourself as extremely busy and perfectly willing to turn down good work.
2. because you want to market yourself as someone who is a rigid artist, a stick in the mud or a crotchety perfectionist. This works great for pizza places.
July 3, 2009
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