Monthly Archives: November 2009

Nov 21

Go-to-Market Paper Available Online

By kevin | Announcements

I recently republished a paper I wrote some years ago about the how’s and why’s of tuning up your go-to-market strategy.  Here’s the lead on it . . .

At some point it occurs to every executive. Maybe it’s a nagging thought in the middle of a meeting or while playing chess with a tough opponent. Maybe it’s a raging impatience. Hopefully it’s a strategic and permanent insight. “It” often sounds like this: “”We’re spending all this time, money, and resource on marketing, sales, fulfillment, information technology, and about forty other things. Tell me again how they all fit together“?

Or let’s put it in the positive.

The demand side of our business, the supply side, and the supporting infrastructure must all line up through clear strategies and initiatives that serve customers and produce value.

Well you’ve just defined a go-to-market strategy.

  • Go-to-market strategy: A coherent set of choices that align your people, processes, products, premises (physical and virtual channels), and partners to deliver your brand promise, the desired customer experience, and tangible value.

This paper can also be downloaded from the DQI Website.

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Nov 21

Sailing with Pirates: What Was Choice B?

By kevin | Random Walk

Although piracy continues unabated off the Somali coast, “we the people” have largely moved on to more compelling matters like the Palin book barrage, Lou Dobb’s retirement, and oh yes, Health Care reform.  A couple of items did sneak into the popular press in the past week that cause me to wonder “what were the thinking?”

The first that comes to mind is the case of a British couple named Chandler.

The Chandlers, married for 28 years, took early retirement about three years ago, sailing around the world. In an entry on a Web site in June they wrote that they were headed for Tanzania, after initially delaying a voyage there “because of the Somali pirate problem.”

You already can surmise the rest: They got within range of the bad guys who grabbed them, apparently in plain view of a Royal Navy boat (another matter entirely).  Now the pirates are issuing videos, ransom demands, and death threats.

If you’re the Chandlers, this is clearly not good.  But I am left asking, not only “what were they thinking?”, but what was the alternative they rejected when they chose to go whistling by pirate land?

One of the big decision traps is a failure to grapple with uncertainty.  One of the big ways that shows up is the understandable assumption that the future will look like the past . . . in other words, all the interesting uncertainties are known and accounted for.  Another version is a failure of imagination: You have no interest in thinking about what you don’t know and what could go wrong.  Finally (but not exhaustively), you may have identified the key uncertainties and decided to go forward anyway.

I have no idea the Chandler’s thought process, but at least according to the news item, the Chandlers were aware of the whole pirate problem.  If your intent is to sail around the world on a 38 foot boat (hardly a yacht by the way), sticking reasonably close to land is probably a good idea, but not something you’re going to have much luck with when it comes to crossing either the Pacific or the Atlantic.

Tanzania is just south of Somalia, separated by a chunk of Kenyan coast line.

  • Choice A is keep to the coast.  Key Risk Factor: Capture by Pirates.  Probable outcome: Held for ransom; death possible.
  • Choice B is to head east towards India. Key Risk Factor: Weather.  Probable outcome: You get wet; death possible.

Meanwhile, news of another pirate attack, this one on a ship called the Maersk Alabama raises another version of the same question, “What were they thinking?”

Somali pirates attacked the Maersk Alabama on Wednesday for the second time in seven months and were thwarted by private guards on board the U.S.-flagged ship who fired off guns and a high-decibel noise device.

Hmmmm, something about the name of that ship is familiar.  Oh, wait . . .

Pirates hijacked the Maersk Alabama last April and took ship captain Richard Phillips hostage, holding him at gunpoint in a lifeboat for five days. Navy SEAL sharpshooters freed Phillips while killing three pirates in a daring nighttime attack.

I guess the whole thing worked so well the last time the locals thought they’d try to crash that party again.

Four suspected pirates in a skiff attacked the ship again on Wednesday around 6:30 a.m. local time, firing on the ship with automatic weapons from about 300 yards (meters) away, a statement from the U.S. Fifth Fleet in Bahrain said.

An on-board security team repelled the attack by using evasive maneuvers, small-arms fire and a Long Range Acoustic Device, which can beam earsplitting alarm tones, the fleet said.

In this case, the pirates live to play another day.  It doesn’t matter what they were thinking.  The ship owners looked at the same information available to the Chandlers, framed the problem statement differently, and came up with what appears to have been a superior choice.

Note to owners of 38 foot sail boats: Think about taking another route.

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Nov 16

Beware the Escalation of Commitment Trap

By kevin | Decision Making

I’m always on the lookout for pieces about decision making at work, or better still, great examples of decision traps at work.  Richard Thaler writes about one of those traps called “escalation of commitment” in the New York Times when he describes a game that’s sometimes called a dollar auction.  I’ve seen it done several ways but a common form is to auction off a $20 bill.  It goes like this . . .

Bidding starts at $1 and goes up in $1 increments. The winner pays the [auctioneer] whatever the high bid was, and gets the $20. Here’s the catch: the second-highest bidder also has to pay, but gets nothing in return.

Typically, a few brave or stupid [bidders] — nearly always male — open the bidding but fairly quickly only two bidders remain and they discover they are in a war of attrition. The bidding slows when someone bids $20, but then resumes with neither wanting to “lose.” If the two students are particularly stubborn, prices can go over $50. [I have seen it go higher than that]

The dollar auction game was invented by a pioneer of game theory, Martin Shubik of Yale, and it illustrates the concept of “escalation of commitment.” Once people are trapped into playing, they have a hard time stopping. (Consider Vietnam.) The higher the bidding goes, and the more each bidder has invested, the harder it is to say “uncle.” The best advice you can give anyone invited to play this particular game is to decline.

Another version of this same trap is called “sunk cost thinking” which is exactly what it sounds like:  You stay with an investment or keep doing something because you’ve already paid for it. It is one of the big reasons why the US is still prosecuting wars in Iraq and Afghanistan and why tax payers continue to pour billions of dollars into rescuing firms that should be shuttered.

I haven’t actually tried it (and probably won’t), but Thaler holds up yet another example of this decision trap at work.  It’s a company called Swoopo, a self-described “entertainment shopping” company.  It works like this . . .

Swoopo sells new merchandise using unusual auction formats. Let’s concentrate on one of them, the so-called penny auction.

Typically an item — say, a laptop that retails for $1,500, is offered for sale. The bidding starts at a penny, and goes up in one-cent increments, but it costs bidders 60 cents to make a bid. Each auction has a scheduled closing time, but as the deadline nears, that time is extended by 20 seconds whenever someone bids.

The site’s home page displays several attractive objects for sale with closing times fast approaching. It is mesmerizing.

One winning strategy might seem to be this: Bid at the last second, just before an auction is about to end. To “help” you do so, the site offers an automatic bidding program called a Bid Butler that allows you to make bids in the last 10 seconds. Alas, others can also use this automatic program, and you soon discover that just as the clock is ticking down and you’re about to make your big score, a bunch of other Bid Butlers get busy, the price jumps by a few cents, and the clock adds more time. Items can remain “in their final seconds” for days.

What makes this procedure so devilish is that while bidders are looking at what seem to be amazing bargains, the Web site is raking in the money. Because Swoopo collects 60 cents for each penny bid, its revenue is the selling price multiplied by 60. This means that if a computer you covet sells for $100, seemingly a bargain, Swoopo collects $6,000 in revenue, a very juicy profit.

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Nov 15

Lessons Learned From A Guy Who Made $20 Billion in Two Years

By kevin | Random Walk

Here’s a story lead from the WSJ that should get your attention:

Even as the financial system collapsed last year, and millions of investors lost billions of dollars, one unlikely investor was racking up historic profits: John Paulson, a hedge-fund manager in New York.

His firm made $20 billion between 2007 and early 2009 by betting against the housing market and big financial companies. Mr. Paulson’s personal cut would amount to nearly $4 billion, or more than $10 million a day. That was more than the 2007 earnings of J.K. Rowling, Oprah Winfrey and Tiger Woods combined.

Wow, $20 billion seems like a lot of money, even in these post-trillion times.  How did he do it?  The short answer is that he went short the housing market and then financial services companies.  For those not in the biz, it means he bought a bunch of insurance on the first and then bet on the second.  For those still not tracking the story, he was on the other side of . . .

  • All those credit default swaps that sunk the big financial companies, you know, the ones the tax payers bailed out? Well not all of them.
  • Investors, some of whom were folks like you and me, some of whom were some of the “savviest” investors in the game who wanted a piece of that free money.
  • Ultimately tax payers whose great, great grandchildren will still be paying the Chinese government for funding the clean up.

Continue reading

Nov 14

Stopped by Bikeexif Today

By kevin | Bikes

For some reason I had not stopped by Bikeexif for the longest time.  It is without question one of the most stunning motorcycle sites on the web.  Shoot, it’s one of the prettiest sites of any description on the web.  Grab a cup of your favorite beverage and go while away the time looking at the amazing photos of the most mouthwatering bikes

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Nov 14

What We Can Learn About Leadership From Conducting

By kevin | Random Walk

This is an absolutely delightful contemplation on leadership through the eyes of a orchestra conductor. 

Think about the dynamics such a person must master . . .

There is the responsibility to the composer, perhaps a minor one, perhaps one like Mozart who takes tea with the Gods.

There are the musicians, each of whom have a story to tell, a skill to display, a wellspring from which to draw.  How to bring those stories together?  How to highlight this one just so? 

And of course there is you, the conductor, with your story, your experiences, your beliefs about structure, process, control, meaning, and more. 

As Talgam points out, there isn’t a single way.  In fact, if you as a musician had the opportunity to play for more than one great conductor, you might find their differences in approach maddening. But by some means, they each are able to bring together and balance the seeming tensions to bring out the best in the individual story teller / musicians, the meaning they find in the music, all within the structure and integrity provided by the composer (who may be centuries gone).  Wonderful.

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Nov 13

Afghanistan Escalation as a Case Study in Decision Making

By kevin | Decision Making

It is surely the height of arrogance to propose an expert point of view on Afghanistan unless you have the relevant information.  I don’t have foreign policy or military expertise, but I do have a point of view on decision making, so at the risk of hubris, here goes . . .

One of the problems I see (already I’m in trouble) is that there is no shared problem definition.  That’s pretty typical of a class of puzzles many refer to as “wicked problems.”  No surprise here but this is where the problems begin. In the case of Afghanistan, it’s easy to spot the following problem definitions or frames:

According to one piece I read recently, the problem as defined by Sec Def Gates is, “How do we signal resolve and at the same time signal to the Afghans as well as the American people that this is not an open-ended commitment?”

The problem that General McChrystal sees relates specifically to the mission he’s been tasked with, which is to fight an insurgency.  Current Army doctrine on that topic says protect the civilians from the bad guys, kill bad guys, and work on building a civil society.

The problem many politicians see is “How do I position myself to score political points?”

The problem that many US citizens see is a pointless war.

The problem that many who think about these things see is how to not destroy the finest military our country, and maybe the world, has ever seen because of eight years of nonstop war.

You see where I’m going with this and you can further appreciate that each of these problem definitions, or “frames,” lead the honest thinker in different directions, both in terms of the alternatives you would consider and the trade-offs you might make.

What is true is that the collective we will not arrive at a common definition of the problem.  There was a time that could have happened, indeed did happen, but that time is now long past.  The question President Obama and his aides are asking is both geopolitical as well as simply political: Balancing the perceived need to continue to prosecute two wars in the Middle East while keeping the general populace onboard.  None of the alternatives are appealing on a good day, and it’s no longer a good day.

As a citizen, I have a point of view on what I think should happen.  As someone that thinks daily about quality decision making, I am annoyed by those who think Obama is dithering or prevaracating.  His predecessors had the dual luxury of having starting this war when the public was with them as well as an ideological lens that eliminating competing points of view and the alternatives that came with them.  Obama is not an idealogue when it comes to foreign policy and is genuinely trying to make a quality decision.  What must trouble him is the abiding fear that despite his best intentions, the outcomes will most likely not be good.

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Nov 03

Europe. Where the History Comes From

By kevin | Random Walk

It’s nearing the end of Day 5 in BCN, so at this point I think I can fairly say that I am now an expert on all things Barcelonian, particularly because I have now been to not one but two museums having to do with the history of the city and the surrounding area, not to mention a day visit to the ancient hub of the area, Tarragona.  So what have I surmised?

There are no fat people

This seems important given the raging debate about health care (if that’s what it’s really about) in the US.  Here in Barcelona, which is in Europe which is as all Americans know vastly inferior to the US, health care comes as part of the standard equipment package.  People get up late, eat more often, eat later, drink more, drink more often, go to bed later, live longer, live healthier lives, aren’t half as fat, and don’t obviously mope about bemoaning the fact that they’re not Americans.  For that matter, most don’t even speak English!

Taxes are evil

I’ve been to Spain several times, the first time more than thirty years ago. Franco was still holding down the fort and the country was far poorer and much more closed.  The south had also not yet been annexed by the English or reinvaded for at least the second time by the Moors.  Three decades on, the evils of joining the EU can be seen everywhere.  The infrastructure is modern and works well.  The harbors are clean.  The population is secular and open to the world.  The overall standard of living is up to varsity standards.  Think how much better a place it would be if none of those tax dollars from Northern Europe had never shown up!

Earth may only be 6000 years old but Spain is much older

I don’t know why I thought about this but it is absolutely clear to me that the people who think that the earth is only 6000 years ago have never seen any of it.  Here in Spain, the previous gold medal winner for Religious intolerance, folks have been living and building on the same patches of land for, oh, 400,000 years or so.  I tried to imagine all those liths (neo, paleo, etc.) telescoped into just 6000 years and, well, spots like Barcelona would have been pretty darned crowded with all those different civilizations building on the same foundations at exactly the same time.  Must have been quite a sight.

God of the month club

If by some miracle some lithic person could have lived for a couple of thousand years, besides meeting Adam and Eve, here’s what his life would have been like.

  1. A bunch of people show up from somewhere else.   Depending on the era, those people came from the North, East, or South.
  2. They bring some cool new stuff (pottery, bronze, Iron, ivory, silk, the alphabet, numbers, etc.).
  3. They reorganize the populace (again) . . .
  4. So they can tax the populace (again, still, more).
  5. They impose a new order (political, military, social, religious).
  6. They fight a war or two.
  7. Repeat and rinse.

So for several thousand years, the basic idea was, “Hi, we’re new on the block, we’re here with a brand new belief system which you will now follow, and you now work for us.”  The only thing that changed was the name on the back of the uniform.  How or why anyone thinks that Christianity was a better deal for Joe and Mary Peasant than being a Visigoth or a Carthaginian, or a Husky is beyond me.

Picking a pocket near you for a thousand years

Going to the history museum snapped me out of my picked-pocket funk.  Somehow it helped to realize that the good people of Catalonia have been banditing and pirating since before Jesus was a gleam in Mary’s eye made me feel less singled out.  The search for an honest man is best conducted elsewhere.

Where did Islam go wrong?

Somehow I had forgotten that one of the waves of Iberian occupiers were the Moors.  During their time here, they built cool buildings, generally civilized the southern part of the Peninsula, and introduced every conceivable cultural, scientific, and material wonder to Europe (via the monks of Catalonia).  They also left the Christians and Jews alone to do their thing, which at that particular time in history did not involve slaughtering each other.  That came later after the One True Church managed to pull together enough flash, bang, boom to toss the Moors out and get things properly sorted.

Not long after, the Christian nobility re-enslaved (they didn’t call it that) the peasantry, the Plague made a star turn, and the Inquisitors stopped by for a couple of centuries (including the counter reformation).  If you were one of those lithic peasants who’d been hanging around for a couple of thousand years, this wouldn’t have been your favorite epoch.

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