Business Ownership and Management
Ideas are sometimes Slippery and Hard to Grasp
I started this blog with the goal of becoming an “idea exchange,” as well as a way to pass along lessons learned to help others. Typical guidance for a blog is to focus on one thing and do it well to develop a following. That is especially important if you want to monetize the blog, but that is not and has not been my goal.
One of the things that has surprised me is how different the comments and likes are for each post. Feedback from the last post was even more diverse and surprising than usual. It ranged from comments about “Siri vs Google” to feedback about Sci-Fi books and movies to Artificial Intelligence.
I asked a few friends for feedback and received something very insightful (Thanks Jim). He stated that he found the blog interesting but wasn’t sure of the objective. He went on to identify several possible goals for the last post. Strangely enough (or maybe not), his comments mirrored the type of feedback that I received. That pointed out an area for improvement, and I appreciated that as well as the wisdom of focusing on one thing. Who knows, maybe in the future…
This also reminded me of a white paper written 12-13 years ago by someone I used to work with. It was about how Bluetooth would be the “next big thing.” He had read an IEEE paper or something and saw potential for this new technology. His paper provided the example of your toaster and coffee maker communicating so that your breakfast would be ready when you walk into the kitchen in the morning.
At that time, I had a couple of thoughts. Who cared about something that only had a 20-30-foot range when WiFi had become popular and had a much greater range? In addition, a couple of years earlier, I had a tour of the Microsoft “House of the Future,” in which everything was automated and key components communicated. But everything in the house was all hardwired or used WiFi – not Bluetooth. It was easy to dismiss his assertion because it seemed to lack pragmatism. The value of the idea was difficult to quantify, given the use case provided.
Looking back now, I view that white paper as having insight. If it was visionary, he would have come out with the first Bluetooth speakers, car interface, or even phone earpiece and gotten rich, but it failed to present practical use cases that were easy enough to understand yet different enough from what was available at the time to demonstrate the real value of the idea. His expression of idea was not tangible enough and, therefore, too slippery to be easily grasped and valued.
I believe that good ideas sometimes originate where you least expect them. Those ideas are often incremental – seemingly simple and sometimes borderline obvious, often building on another idea or concept. An idea does not need to be unique to be important or valuable, but it needs to be presented in a way that makes it easy to understand the benefits, differentiation, and value. That is just good communication.
One of the things I miss most from when my consulting company was active was the interaction between a couple of key people (Jason and Peter) and myself. Those guys were very good at taking an idea and helping build it out. This worked well because we had some overlapping expertise and experiences as well as skills and perspectives that were more complementary. That diversity increased the depth and breadth of our efforts to develop and extend those ideas by asking the tough questions early and ensuring we could convince each other of the value.
Our discussions were creative, highly collaborative, and a lot of fun. We improved from them, and the outcome was usually viable from a commercial perspective. As a growing and profitable small business, you must constantly innovate to differentiate yourself. Our discussions were driven as much by necessity as intellectual curiosity, and I believe this was part of the magic.
So, back to the last post. I view various technologies as building blocks. Some are foundational, and others are complementary. To me, the key is not viewing those various technologies as competing with each other. Instead, I look for potential value created by integrating them with each other. That may not always be possible and does not always lead to something better, but occasionally it does, so to me, it is a worthwhile exercise. With regard to voice technology, I believe we will see more, better, and smarter applications of it – especially as real-time and AI systems become more complex due to the use of an increasing number of specialized chips, component systems, geospatial technology, and sensors.
While today’s smartphone interfaces would not pass the Turing Test or proposed alternatives, they are an improvement over more simplistic voice translation tools available just a few years ago. Advancement requires the tools to understand context in order to make inferences. This brings you closer to machine learning, and big data (when done right) significantly increases that potential.
Ultimately, this all leads back to Artificial Intelligence (at least in my mind). It’s a big leap from a simple voice translation tool to AI, but it is not such a stretch when viewed as building blocks.
Now think about creating an interface (API) that allows one smart device to communicate with another, like the collaborative efforts described above with my old team. It’s not simply having a front-end device exchanging keywords or queries with a back-end device. Instead, it is two or more devices and/or systems having a “discussion” about what is being requested, looking at what each component “knows,” making inferences based on location and speed, asking clarifying questions and making suggestions, and then finally taking that multi-dimensional understanding of the problem to determine what is really needed.
So, possibly not true AI (yet), but a giant leap forward from what we have today. That would help turn the science fiction of the past into science fact in the near future. The better the understanding and inferences by the smart system, the better the results.
I also believe that the unintended consequence of these new smart systems is that they will likely make errors or have biases like a human as they become more human-like in their approach. Hopefully, those smart systems will be able to automatically back-test recommendations to validate and minimize errors. If they are intelligent enough to monitor results and suggest corrective actions when they determine that the recommendation does not have the optimal desired results, they would become even “smarter.” There won’t be an ego creating a distortion filter about the approach or the results. Or maybe there will…
Many of the building blocks required to create these new systems are available today. But it takes vision and insight to see that potential, translate ideas from slippery and abstract to tangible and purposeful, and then start building something cool and useful. As that happens, we will see a paradigm shift in how we interact with computers and how they interact with us. It will become more interactive and intuitive. That will lead us to the systematic integration that I wrote about in a big data / nanotechnology post.
So, what is the real objective of my blog? To get people thinking about things differently, to foster collaboration and partnerships between businesses and educational institutions to push the limits of technology, and to foster discussion about what others believe the future of computing and smart devices will look like. I’m confident that I will see these types of systems in my lifetime, and I believe in the possibility of this occurring within the next decade.
What are your thoughts?
It’s not Rocket Science – What you Measure Defines how People Behave
I previously wrote a post titled “To Measure is to Know.”
The other side of the coin is that what you measure defines how people behave. This is an often forgotten aspect of Business Intelligence, Compensation Plans, Performance reviews, and other key areas in business. While many people view this topic as “common sense,” based on the numerous incentive plans you run across as a consultant and compensation plans you submit as a Manager, that is not the case.
Is it wrong to have people respond by focusing on specific aspects of their job that they are being measured on? That is a tricky question. This simple answer is “sometimes.” This is ultimately the desired outcome of implementing specific KPIs (key performance indicators), OKRs (objectives and key results), MBOs (Management by Objectives), and CSAT (Customer Satisfaction), but it doesn’t always work. Let’s dig into this a bit deeper.
One prime example is something seemingly easy yet often anything but – Compensation Plans. When properly implemented, these plans drive organic business growth through increased sales, revenue, and profits (three related items that should be measured). This can also drive steady cash flow by closing deals faster and within specific periods (usually months or quarters) and focusing on models that create the desired revenue stream (e.g., perpetual license sales versus subscription license sales versus SaaS subscription sales). What could be better than that?
Successful salespeople focus on the areas of their comp plan where they have the greatest opportunity to make money. Presumably, they are selling the products or services that you want them to based on that plan. MBO and OKR goals can be incorporated into plans to drive toward positive outcomes that are important to the business, such as bringing on new reference accounts. Those are forward-looking goals that increase future (as opposed to immediate) revenue. In a perfect world, with perfect comp plans, these business goals are codified and supported by motivational financial incentives.
Some of the most successful salespeople are the ones who primarily care only about themselves (although not at the expense of their company or customers). They are in the game for one reason—to make money. Give them a well-constructed plan that allows them to win, and they will do so in a predictable manner. Paying large commission checks should be a goal for every business because properly constructed compensation plans mean their own business is prospering. It needs to be a win-win design.
However, suppose a salesperson has a poorly constructed plan. In that case, they will likely find ways to personally win with deals inconsistent with company growth goals (e.g., paying a commission based on deal size but not factoring in profitability and discounts). Even worse, give them a plan that doesn’t provide a chance to win, and the results will be uncertain at best.
Just as most tasks tend to expand to use all the time available, salespeople tend to book most of their deals at the end of whatever period is used. With quarterly payment cycles, most of the business tends to book in the final week or two of the quarter, which is not ideal from a cash flow perspective. Using shorter monthly periods may increase business overhead. Still, the potential to level out the flow of booked deals (and associated cash flow) from salespeople working harder for that immediate benefit will likely be a worthwhile tradeoff. I pushed for this change while running a business unit, and we began seeing positive results within the first two months.
What about motiving Services teams? What I did with my company was to provide quarterly bonuses based on overall company profitability and each individual’s contribution to our success that quarter. Most of our projects used task-oriented billing, where we billed 50% up-front and 50% at the time of the final deliverables. You needed to both start and complete a task within a quarter to maximize your personal financial contribution, so there was plenty of incentive to deliver and quickly move to the next task. As long as quality remains high, this is a good thing.
We also factored in salary costs (i.e., if you make more than you should be bringing in more value to the company), the cost of re-work, and non-financial items that were beneficial to the company. For example, writing a white paper, giving a presentation, helping others, or even providing formal documentation on lessons learned added business value and would be rewarded. Everyone was motivated to deliver quality work products in a timely manner, help each other, and do things that promoted the growth of the company. My company prospered, and my team made good money to make that happen. Another win-win scenario.
This approach worked very well for me and was continually validated over several years. It also fostered innovation because the team was always looking for ways to increase their value and earn more money. Many tools, processes, and procedures emerged from what would otherwise be routine engagements. Those tools and procedures increased efficiency, consistency, and quality. They also made it easier to onboard new employees and incorporate an outsourced team for larger projects.
Mistakes with comp plans can be costly – due to excessive payouts and/or because they are not generating the expected results. Backtesting is one form of validation as you build a plan. Short-term incentive programs are another. Remember, without some risk, there is usually little reward, so accept that some risk must be taken to find the point where the optimal behavior is fostered and then make plan adjustments accordingly.
It can be challenging and time-consuming to identify the right things to measure, the proper number of things (measuring too many or too few will likely fall short of goals), and provide the incentives to motivate people to do what you want and need. But, if you want your business to grow and be healthy, it must be done well.
This type of work isn’t rocket science and is well within everyone’s reach.
Are you Visionary or Insightful?
Having great ideas that are not understood or validated is pointless, just as being great at “filling in the gaps” to do amazing things does not accomplish much if what you are building achieves little toward your needs and goals. This post is about Dreaming Big and turning those dreams into actionable plans.
Let me preface this post by stating that both are important and complementary roles. But, if you don’t recognize the difference between the two, it becomes much more challenging to execute and realize value/gain a competitive advantage.
The Visionary has great ideas but doesn’t always create plans or follow through on developing the idea. There are many reasons why this happens (distractions, new interests, frustration, lack of time), so it is good to be aware of that, as this type of person can benefit by being paired with people willing and able to understand a new idea or approach, and then take the next steps to flesh out a high-level plan to present that idea and potential benefits to key stakeholders. People may view them as aloof or unfocused.
The Insightful sees the potential in an idea, helps others understand the benefits and gain their support, and often creates and executes a plan to prototype and validate the idea – killing it off early if the anticipated goals are unachievable. They document, learn from these experiences, and become more and more proficient with validating the idea or approach and quantifying the potential benefits. They are usually very pragmatic.
Neither of these types of people is affected by loss aversion bias.
I find it amazing how frequently you hear someone referred to as being Visionary, only to see that the person in question could eliminate some of the noise and “see further down the road” than most people. While this skill is valuable, it is more akin to analytics and science than art. Insight usually comes from focus, understanding, intelligence, and being open-minded. Those qualities matter in both business and personal settings.
On the other hand, someone truly visionary looks beyond what is already illuminated and can, therefore, be detected or analyzed. It’s like a game of chess where the visionary person is thinking six or seven moves ahead. They are connecting the dots for the various future possibilities while their competitor is still thinking about their next move.
Interestingly, this can be a very frustrating situation for everyone.
- The Visionary with an excellent idea may become frustrated because they feel an unmet need to be understood.
- The people around that visionary person become frustrated, wondering why that person isn’t able to focus on what is important or why they fail to see/understand the big picture.
- Others view the visionary ideas and suggestions as tangential or irrelevant. It is only over time that the others understand what the visionary person was trying to show them – often after a competitor has started executing a similar idea.
- The Insightful wanting to make a difference can feel constrained in static environments, offering little opportunity for change and improvement.
Both Insightful and Visionary people feel that they are being strategic. Both believe they are doing the right thing. Both have similar goals. What’s truly ironic is they may view each other as the competition rather than seeing the potential of collaborating.
A strong management team can positively impact creativity by fostering a culture of innovation and placing these people together to work towards a common goal. Providing little time and resources to explore an idea can lead to remarkable outcomes. When I had my consulting company, I sometimes joked, “What would Google do?” to describe that amazing things were possible and waiting to be done.
The insightful person may see a payback on their ideas sooner than the visionary person, and that is due to their focus on what is already in front of them. It may be a year or more before what the visionary person has described shifts to the mainstream and into the realm of insight – hopefully before it reaches the realm of common sense (or worse yet, is entirely passed by).
I recommend that people create a system to gather ideas, along with a description of what the purpose, goals, and advantages of those ideas are. Foster creative behavior by rewarding people for participation regardless of what becomes of the idea. Review those ideas regularly and document your commentary. You will find good ideas with luck – some insightful and possibly even visionary.
Look for commonalities and trends to identify the people who can cut through the noise or see beyond the periphery and the areas having the greatest innovation potential. This approach will help drive your business to the next level.
You never know where the next good idea will come from. Efforts like these provide growth opportunities for people, products, and profits.
Investing in Others – Becoming a Mentor
I have been very fortunate throughout my career. There have been incredible opportunities, risks with big rewards, and lessons learned from mistakes and failure (e.g., one of the biggest lessons learned early is that most mistakes will not kill you, and therefore you can find a way to recover from them). In hindsight, the people who saw something in me and invested in my career – my mentors – have been most valuable in shaping my career.
None of these people had to help me. It’s possible that they did so for their own benefit (i.e., the better I do my job, the easier it is for them), but I believe they were passing along a valuable gift. I was lucky to have been given these gifts early in my career, as they have been invaluable personally and professionally.
As a mentee may not recognize either the value of what you are receiving, or the effort that has gone into providing that gift to you. You fully appreciate what others have done for you only years later.
In my first programming job, my manager (Jim) assigned me to work with different key people and would follow up every time to ask what I had learned. One day he gave me my first project. I was excited but anxious because I did not want to fail my mentor.
I only had six months of experience, and this was a big project for an important automotive customer (Subaru, for the first fully customized customer loyalty coupon system for a major auto manufacturer in the late 1980s). It was a stretch for me, and the system had to be production-ready in six months.
Jim let me build it, checked daily to see if I had questions, and would provide feedback and direction if I asked. Aside from that he pretty much left me alone. He seemed more confident in my ability to succeed than I did at the time.
After two months, I thought I was finished. We reviewed everything, and Jim constructively picked apart my system – pointing out various flaws and then discussing the logic and reasoning behind my decisions. We spent half a day on this exercise, and it was only years later I realized that he was helping me learn more than simply validating the system design.
After another two months, we reviewed this system’s second iteration. He told me while this version would work and would be acceptable from anyone else, I still had time remaining, and he was confident that I could do even better next time. He provided a couple of tips about high-level areas he focused on while designing and developing systems and left it at that.
When I returned with the third iteration system, he reviewed it, smiled, and said he could not have done this better himself. At first, I was proud of completing my first independent project, but later I realized how much I had learned in those six months. This experience provided me with a lifelong benefit as well as provided the motivation to help others in a similar manner. My mentor was (and still is) a great leader!
As a manager this person had so many reasons not to give me the project, to just tell me what to do, and to not let me redo it (twice). From a short-term management perspective, what he did was wasteful. But, from a big-picture perspective, he was doing things that helped me create more value for the company for the 3-4 years I continued working there. The benefits outweighed the cost; Jim was wise enough to see that.
Several years ago, a young woman in Australia contacted me via LinkedIn, asking for suggestions on improving her skills to advance her career. I gave her many assignments over a year and she did amazing work. She advanced in her company, later relocated to another country, and then switched industries. She currently holds a high-level position and has been very successful. It made me feel good knowing that my efforts played a small part in her advancement.
From my perspective, it all comes down to how you view people and relationships. Are they like commodities that are used and replaced as needed, or are they assets that can grow in value? I like to think that I have helped several people’s “career portfolios,” which helps ensure that business is not a zero-sum game. Hopefully, those people will do the same thing, increasing leverage on those investments that started with Jim.
So, what do you think?
Where Ideas, Experiences, and Lessons Learned Intersect 