A few weeks ago, I wrote about Reid Hoffman’s book Alliance and his innovative ideas on how to structure the employee company relationship. One issue that some people raised to me was it sounded great, but if your company does not believe in creating tours of duty, it was not very useful. I am not much for giving non-actionable advice (hence why I am not a consultant ☺), so I wanted to address the situation by discussing what you can do to leverage this powerful concept even if your company does not.
What is a tour of duty
I do not want to go into too much detail since you may have read my post in October, but to recap: A tour of duty occurs when the employer and employee mutually agree on a finite project, with goals for the employees contribution. It also includes how the tour of duty will benefit the employee. To create a fictitious example, say Uber wants to open the Las Vegas market to its service. When recruiting a VP, rather than pitching them on working for Uber for life, the hiring manager specifically lays out that the task will be a two-year project to penetrate Las Vegas. The employee will need to work with the legal team to counteract the local taxi companies and then recruit drivers. The candidate would learn how to lobby local governments and launch a location-based tech product. Both agree that at the end of the two-year tour of duty, there may be another tour of duty at Uber that is mutually beneficial or the employee might use the skills he learned to help another company. Continue reading “Define your own tour of duty”
A recent article in the Harvard Business Review, “Making Charity Pay” by Michael Norton and Jill Avery, shows how business can use philanthropy to improve profitability. They point out that charity can enhance customer loyalty, brand awareness and sales. To impact metrics positively, however, you need to implement the cause-based initiatives appropriately.
Norton and Avery analyzed both successful and unsuccessful charitable initiatives and determined that success is driven by companies aligning causes that resonate with customers in a way that drives sales.
The first part of the equation is aligning the cause with the customer. With most successful initiatives, it means looking beyond causes that are important to you, the leadership team or maybe even your local community. You need to talk to your customers and understand what causes are important to them. One simple technique I have found particularly successful is surveying your users and asking them to rank the causes you are considering for the initiative. Continue reading “Using charity to improve revenue”
I have always said the best measure of a company and its customer relationships is not how they avoid unhappy customers but how they deal with unpleasant situations. Inevitably, you will do something that some customers do not like. Rather than focusing on avoiding the inevitable, there is more value in building a strong plan to react to these unhappy people and turning them into a resource. In fact, if they are engaged enough to complain to you rather than just go to a competitor, unhappy customers have the potential to be VIPs if you handle them appropriately.
A recent KISSmetrics blog post by Josh Brown, “5 Ways to Turn Your Unhappy Customer Into A Valuable Resource,” provides strong tactical advice on addressing unhappy customers. By applying these tactics, you not only improve the word of mouth the users generate, but also increase lifetime value by building customers (or players) who will continue to purchase your product.
Make your customers feel heard
The most effective way to be liked and admired is by listening to other people, a philosophy around which Dale Carnegie built a career. It is no different when dealing with your customers. An unhappy customer often cares more about being heard and understood than having their issue resolved. This means you need to listen to them and acknowledge their problem, not simply fix it.
As the Brown writes, “if you respond to an unhappy customer by immediately trying to get to a solution, it can possibly backfire and make the customer even more upset. Being unhappy or angry with a company or product puts the customer in a highly emotional state, so the first thing you should try to do is get them into a more agreeable frame of mind.”
Social media is often an opportunity to leverage this principle. You may see multiple Facebook posts about a problem and immediately fix it. While that sounds great, if you do not acknowledge the posts and communicate with the active community, they may not be satisfied and can negate the impact of the fix. Continue reading “Turning unhappy customers”
For those who watch sports, we almost universally admire the “high-motor” players. It might be fans, announcers, teammates, but whoever it is, we love players who give an incredible effort on every single play. In baseball, it is the player who sprints to first base even on a pop-up with a 99 percent chance of being out. In American football, it is the player who runs 90 yards to tackle someone who just intercepted a pass before they score a touchdown even if the team is down by 35 points (who can forget Don Beebe in the Super Bowl for the Bills). In basketball, it is the relatively small player who gets more rebounds than the 7-footer because they want it more.
In this post, I want to raise the question: Are you a high-motor worker? If they did live commentary on the tech industry, would the announcers talk about your intangibles? I often write about how to lead or build a team, but today I want you to focus on you.
There are two questions:
- Are you a high-motor worker?
- Do you want to be? As with most of my posts, there is not a right or wrong approach. You can be a great leader or employee without being high motor; there are only a few in every sport. There is nothing wrong with not being one of them, as it depends on your priorities or needs.
The goal of this post is not to be critical of people or behaviors, but to help make you more self-aware so you can be the person you want to be.
Go hard on every play
There are two elements to being high motor. The first is going hard on every project, even when it seemingly does not matter. In a business setting, it is often referred to when people are acting with a sense of urgency. Continue reading “Are you a high-motor worker?”
I hate writing about the next big thing because it is usually trite, clichéd or just hype, but I read a great piece in the Harvard Business Review about the collaborative economy (“Sharing’s Not Just for Start-Ups” by Rachel Botsman) that I wanted to share. Most of us have come across and probably used start-ups leveraging collaboration or sharing, companies such as Airbnb (where people share excess rooms with travelers) or Uber and Lyft (where people who need a ride can find a driver who is looking to earn extra funds. In and of itself, this is an exciting space with many promising early stage companies, from peer-to-peer lending (money club) to online lessons (Udemy). What I found interesting in Botsman’s article is how this opportunity can be extended to many other businesses.
There are great opportunities in the collaborative economy to create additional revenue streams (which may supplant their core business at some point) or provide channels for user growth. Botsman starts by discussing Marriott, the hotel chain, which rolled out an offering in conjunction with LiquidSpace so people and businesses could book excess conference rooms at market clearing prices. Not only did this initiative create a new revenue stream for Marriott by generating income from rooms that were sitting unused, it also helped grow the customer base. Continue reading “The collaborative economy is an opportunity for all companies”
There was an interesting post recently on the Kissmetrics blog, “5 Psychological Principles of High Converting Websites,” that had some very interesting insights not just for website conversion but for overall product performance. Although I do not agree with all of these principles, understanding how your users think or play is crucial to success.
Law of pithiness
The article starts with the law of pithiness, in which people tend to order their experiences in a symmetrical, simple manner. They prefer things that are clear and orderly, and are afraid of complex, complicated ideas or designs. The law of pithiness leads to a design principle that I think is critical: The simpler your product or game, the greater its chances for success. If it is a game, every second of training or tutorial reduces the chance it succeeds. If it is a product, the easier it is to use and the simpler it makes the users life, the more powerful it will be. Uber is successful because it takes about 15 seconds to hail a taxi, set the destination and pay. Social casinos games are habitually in the top grossing because you download the game, click on a slot machine, and you are playing. The more complex or difficult the process, the less likely for success.
Law of past experience
This principle suggests people interpret current experiences by their past experiences. If you try to change the way they need to do things, they are likely to not understand or rebel. For example, in your shopping cart or buy page, you may have a clever attractive icon for people to buy, but they are more likely to make a purchase if you have a button that says buy now because they remember that is how they make a purchase. Also, if you have an existing product with a large user base, you may improve the product but lose many of your existing users because they are used to using the product in a traditional way. For many years, in the land-based slot machine business, even when the slots went digital and only needed the push of a digital button, they had to include a mechanical arm because that is how people felt they should play a slot machine. Continue reading “Psychology that can improve your metrics”
One of the best books I read this year is The Alliance: Managing Talent in the Networked Age by Reid Hoffman. The core concept in the book is that there is no longer employment for life but there is still a way to build a win-win relationship between employers and employees. Hoffman and his co-authors suggest a tour-of-duty type relationship, where employer and employee agree to a short or medium term engagement with a defined goal.
The current reality
Hoffman begins by pointing out that in the at-will era (when employers can and do fire employees at their discretion), employees thus think of themselves as “free agents,” seeking out the best opportunities for growth and changing jobs whenever they get a better offers. He points to a 2012 study that found even though about half of employees wanted to stay with their current employer, most of them felt that they would have to take a job at a different company to advance their careers. Hoffman writes, “loyalty is scarce, long-term ties are scarcer, but there’s plenty of disillusionment to go around.”
Related to this point, employees’ trust of management is at an all-time low. One reason employees do not trust their employer is that the foundation of the relationship is built on dishonesty. When employees are courted, they are told about the fantastic long-term opportunities. When they answer interview question, they comment on how there goal is to spend their life contributing to the company. Both parties know this is nonsense but feel they must utter these phrases. It creates a relationship built on lies and a relationship without trust is a relationship without loyalty. A business without loyalty is a business without long-term thinking. A business without long-term thinking is a business that’s unable to invest in the future and thus one doomed to fail.
Tour of duty concept
A tour of duty is when the employer and employee mutually agree on a finite project, with goals for the employee’s contribution. It also includes how the tour of duty will benefit the employee. To create a fictitious example, say Uber wants to open the Las Vegas market to its service. When recruiting a VP, rather than pitching them on working for Uber for life, the hiring manager specifically lays out that the task will be a two-year project to penetrate Las Vegas. The employee will need to work with the legal team to counteract the local taxi companies and then recruit drivers. The candidate would learn how to lobby local governments and launch a location based tech product. Both agree that at the end of the two-year tour of duty, there may be another tour of duty at Uber that is mutually beneficial or the employee might use the skills he learned to help another company. For example, he may go over to Peapod to open the Austin market with the skills he learned at Uber. Uber benefits by having a successful launch in Las Vegas, and the employee is more valuable and has a great new opportunity. The important thing is both parties are honest with each other and they have built a mutually beneficial relationship. Continue reading “Using tours of duty to have a better company employee relationship”
I have written multiple times about collaboration and how valuable it is, and a recent piece in the Harvard Business Review – “Bringing out the best in your team” by Brian Bonner and Alexander Bolinger – reminded me of one critical ingredient. As all of us have experienced repeatedly, from case studies in business school to conference calls to team meetings, usually a small subset of the group drives the call or meeting. This phenomenon leads to two problems:
- The people dominating the meeting are not necessarily the ones with the most relevant knowledge.
- Everyone at the meeting should have something valuable to add, otherwise they should not be at the meeting, so letting a few monopolize restricts the knowledge shared.
Effectively, outgoing people get the most air time and visibility even if they are not the most expert on the topic or problem. Continue reading “Bringing out the best in your team”
You often hear how important it is to look at a person or company’s history before hiring, investing, etc., and although it is crucial, it is also crucial to do more than look superficially. Conversely, just looking superficially can cause significant damage and lead you into a bad decision.
Using track record when hiring
Probably the most important factor when considering a candidate is what they have previously done in their career. While a weak candidate can shine for a day of interviews and a great candidate may not be good in an interview environment, what a person has done previously in their career is a strong indicator of what they can do for you.
The challenge is how to analyze a person’s track record. If you look on LinkedIn, 90 percent of people are all in the top 10 percent. In some cases (though I have found it rare among candidates for senior positions), people lie about their prior roles and achievements. This issue is easy to uncover; you just need to ensure you do your due diligence on background and reference checks. The one caveat is not to rely on the references that you are given, as almost anyone can find three or four people (often friends) that will say good things about them. You need to dig deeper, for key positions and achievements figure out who they reported to or worked with, then reach out directly to those people (I usually use LinkedIn) to get the real story.
The other key element of checking candidates’ track records is understanding their true roles on the major achievements they tout. Continue reading “Look closely at track record, with the emphasis on closely”
I recently wrote about the winner-takes-all economy, based on what I read in The Second Machine Age by Erik Brynjolfsson and Andrew McAfee. The authors also provided some fascinating insights into how recombinations are driving economic growth. The insights about recombinations is very helpful in understanding the type of start-ups that are most likely to succeed.
Effectively, recombinations are taking different technological improvements and combining them to create disruptive products. An example they use is Waze, the smartphone app that provides optimal driving directions. Waze is a recombination of a location sensor, data transmission device (that is, a phone), GPS system, and social network. The team at Waze invented none of these technologies; they just put them together in a new way. None of these elements was particularly novel. Their combination was revolutionary.
While recombinations initially feel like something that would drive incremental innovation, because you are combining multiple rapidly increasing technologies it leads toexponential growth that creates staggeringly big numbers, ones that leave our intuition and experience behind.
The authors cite economist Martin Weitzman, who developed a mathematical model of new growth theory, in which the fixed factors in an economy—machine tools, trucks, laboratories, etc— are augmented over time by pieces of knowledge that he calls ‘seed ideas,’ and knowledge itself increases over time as previous seed ideas are recombined into new ones. This is an innovation-as-building-block view of the world, where both the knowledge pieces and the seed ideas can be combined and recombined over time. This model has a fascinating result: Because combinatorial possibilities explode so quickly, there is an infinite number of recombinations of the existing knowledge pieces. Continue reading “Creating billion-dollar businesses through recombination”