Tuesday, October 25, 2011
Monday, October 24, 2011
Sunday, October 23, 2011
The Wisdom of Crowds by James Surowiecki
Chapter 5: Shall We Dance? Coordination in a Complex World
Page 84-107
5.1. William H Whyte
5.2. Brian Arthur -> El Farol Problem
Ann M. Bell & William A. Sethares
5.3. Thomas C Schelling -> Schelling Points
5.4. Stanley Milgram
Page 84-107
5.1. William H Whyte
5.2. Brian Arthur -> El Farol Problem
Ann M. Bell & William A. Sethares
5.3. Thomas C Schelling -> Schelling Points
5.4. Stanley Milgram
Made to Stick by Chip Heath and Dan Heath
We can engage people's curiosity over a long period of time by systematically "opening gaps" in their knowledge - and then filling those gaps.
After the lead, information is presented in decreasing order of importance. Journalists call this the "inverted pyramid" structure - the most important info (the widest part of the pyramid) is at the top.
Becoming an expert in something means that we become more and more fascinated by nuance and complexity.
Becoming an expert in something means that we become more and more fascinated by nuance and complexity.
When you say three things, you say nothing.
Palm Pilot and James Carville (on the Clinton Campaign) had teams comprised of people who were knowledgeable and passionate about their work - had the capability and desire to do a lot of different things to argue every issue and engineer every feature. Yet in both cases the team needed a simple reminder to fight the temptation to do too much.
People are tempted to tell you everything, with perfect accuracy, right up front, when they should be giving you just enough info to be useful, then a little more, then a little more.
Schemas in Hollywood - Use analogies - Speed was pitched as Die Hard on a bus.
Schemas in Hollywood - Use analogies - Speed was pitched as Die Hard on a bus.
Understand a compact message because they invoke concepts that you already know.
There is value in sequencing information - not dumping a stack of information on someone at once but dropping a clue, then another clue, then another. This method of communication resembles flirting more than lecturing.
Unexpected ideas, by opening a knowledge gap, tease and flirt. They mark a big red X on something that needs to be discovered but don't necessarily tell you how to get there.
Sinatra Test - If I can make it there, I'll make it anywhere
When one example alone is enough to establish credibility in a given domain
Testable credentials - Are you better off now than you were four years ago? Ronald Reagan in the 1980 debate against Carter. Instead of focusing on statistics of inflation, employment rate, interest rates, he deferred to his audience.
The problem is that when you hit listeners between the eyes they respond by fighting back. The way you deliver a message to them is a cue to how they should react. If you make an argument, you're implicitly asking them to evaluate your argument - judge it, debate it, criticize it - and then argue back, at least in their minds. But with a story, Denning argues, you engage the audience - you are involving people with your idea, asking them to participate with you.
The problem is that when you hit listeners between the eyes they respond by fighting back. The way you deliver a message to them is a cue to how they should react. If you make an argument, you're implicitly asking them to evaluate your argument - judge it, debate it, criticize it - and then argue back, at least in their minds. But with a story, Denning argues, you engage the audience - you are involving people with your idea, asking them to participate with you.
Someone tapping a tune can hear the song in their head, while listeners of the tapping cant.
Stories can almost single handedly defeat the Curse of Knowledge. In fast, they naturally emboady most of the SUCCESs framework. Stories are almost always concrete. Most of them have Emotional and Unexpected elements. The hardest part of using stories effectively is making sure that they're Simple - that they reflect your core message. It's not enough to tell a great story, the story has to reflect your agenda.
Stories can almost single handedly defeat the Curse of Knowledge. In fast, they naturally emboady most of the SUCCESs framework. Stories are almost always concrete. Most of them have Emotional and Unexpected elements. The hardest part of using stories effectively is making sure that they're Simple - that they reflect your core message. It's not enough to tell a great story, the story has to reflect your agenda.
Ultimately, the test our success as idea creators isn't whether people mimic our exact words, it's whether we achieve our goals.
The first villain is the natural tendency to bury the lead - to get lost in a sea of information. One of the worst things about knowing a lot, or having access to a lot of information, is that we're tempted to share it all.
The second villain is the tendency to focus on the presentation rather than on the message. Public speakers naturally want to appear composed, charismatic, and motivational. And, certainly, charisma will help a properly designed message stick better. But all the charisma in the world doesn't save a dense, unfocused speech.
The first villain is the natural tendency to bury the lead - to get lost in a sea of information. One of the worst things about knowing a lot, or having access to a lot of information, is that we're tempted to share it all.
The second villain is the tendency to focus on the presentation rather than on the message. Public speakers naturally want to appear composed, charismatic, and motivational. And, certainly, charisma will help a properly designed message stick better. But all the charisma in the world doesn't save a dense, unfocused speech.
To beat decision paralysis, communicators have to do the hard work of finding the core. Lawyers must stress one or two points in their closing arguments, not ten.
The Curse of Knowledge, is a worthy adversary because in some sense it's inevitable. Getting a message across has two stages: the Answer stage and the Telling Others stage. In the Answer stage, you use your expertise to arrive at the idea that you want to share. Doctors study for a decade to be capable of giving the Answer. Business managers may deliberate for months to arrive at the Answer.
The Curse of Knowledge, is a worthy adversary because in some sense it's inevitable. Getting a message across has two stages: the Answer stage and the Telling Others stage. In the Answer stage, you use your expertise to arrive at the idea that you want to share. Doctors study for a decade to be capable of giving the Answer. Business managers may deliberate for months to arrive at the Answer.
Business managers seem to believe that once they've clicked through a PowerPoint presentation showcasing their conclusions, they've successfully communicated their ideas. What they've done is share data. If they're good speakers, they may even have created an enhanced sense, among their employees and peers that they are "decisive" or "managerial" or "motivational". But, like the Stanford students, the surprise will come when they realize that nothing they've said had impact. They've shared data, but they haven't created ideas that are useful and lasting. Nothing stuck.
The Communication Framework:
For an idea to stick, for it to be useful and lasting, it's got to make the audience:
- Pay attention - Unexpected
- Understand and remember it - Concrete
- Agree/Believe - Credible
- Care - Emotional
- Be able to act on it - Story
Symptom: Apathy - No one seems fired up about this
Solution: Remember the Mother Teresa effect - people care more about individuals than they do about abstractions. Tell them an inspiring Challenge plot or Creativity ploy story. Tap into their sens of their own identities like the "Don't Mess with Texas" ads.
Curse of knowledge tempts people to use language that is sweeping, high-level, and abstract: The most efficient manufacturer of semiconductors? The lowest-cost provider of stereo equipment! World class customer service!
Psychologists have uncovered situations where the mere existence of choice, even choice among several good options, seems to paralyze us in making decisions.
Psychologists have uncovered situations where the mere existence of choice, even choice among several good options, seems to paralyze us in making decisions.
Three barriers to talking strategy - The Curse of Knowledge, decision paralysis, and the lack of a common strategic vocabulary - emerge for different reasons, but they can be overcome in similar ways.
Be concrete - Specific and sensory - So everyone understands you message in a similar way.
- Say something unexpected - Don't waste your time communicating a common sense strategy - Identify the uncommon sense - new or different aspects of the strategy.
- Tell stories - A good story is better than an abstract statement
The conventional wisdom is that leaders should spend a lot of their time presenting and discussing strategy. The most common refrain in strategic communication is repetition, repetition, repetition. Keep repeating the strategy, again and again, until it finally sinks in. Here's the problem: Repetition doesn't prevent the Curse of Knowledge or encourage two-way communication.
Rather we are proposing that leaders treat strategy as a two-step process: Step 1 is determining the right strategy. Step 2 is communicating it in a way that allows it to become part of the organizational vocabulary. Both are necessary.
If strategies are to be living and active - if they are to become embodied in the actions of employees and outside partners - they must be woven into day-to-day conversations and decisions.
If your frontline employees can talk about your strategy, can tell stories about it, can talk back to their managers and feel credible doing so, then the strategy is doing precisely what it was intended to do: guide behavior.
To make an idea simple, then, first find the core of your lesson, then anchor it in knowledge that your students already have.
Sticky = understandable, memorable, and effective in changing thought or behavior.
SUCCESs: Simple, Unexpected, Concrete, Credible, Emotional, Stories
Sticky = understandable, memorable, and effective in changing thought or behavior.
SUCCESs: Simple, Unexpected, Concrete, Credible, Emotional, Stories
The Villain: The Curse of Knowledge - It's hard to be a tapper. Creativity starts with templates: Beat the curse with the SUCCESs checklist:
- Simple
- Find the Core - Commander's intent - Determine the single most important thing. Inverted pyramid. Don't bury the lead. The pain of decision paralysis. Names, names, names.
- Share the Core - Simple = core + compact. Proverbs: sound bites that are profound. Visual proverbs: The Palm Pilot wood block. How to pack a lot of punch into a compact communication:
- Tap into existing schemas: The pomelo
- Create a high concept pitch: Die Hard on a bus
- Use a generative analogy: Disney's cast members
- Unexpected
- Get Attention: Surprise - Break a pattern - The surprise brow: a pause to collect information.
- Hold attention - Interest - Create a mystery - Highlight a knowledge gap. Use the news-teaser approach.
- Concrete
- Help people understand and remember. Write with the concreteness of a fable. Make abstraction concrete by redefining it. Provide a concrete context. Put people into the story. Use more hooks in your idea.
- Help people coordinate - Find common ground at a shared level of understanding. Set common goals in tangible terms - Our plane will land on runway 4-22. Make it real. Why concreteness helps - white things vs white things in your fride. Create a turf where people can bring their knowledge to bear. Talk about people, not data.
- Credible
- Help people believe
- External credibility - Authorities and anti-authorities
- Internal credibility - Use convincing details - Jurors and the Darth Vader toothbrush. Make stats accessible - Nukes as bbs. The Sinatra Test. Use testable credentials.
- Emotional
- Make people care - Mother Teresa principle - If I look at the one, I will act
- Use the power of association -
- Appeal to self interest
- Appeal to identity - Don't mess with Texas
- Stories
- Get people to act
- Stories as simulations - Tell people how to act
- Stories as inspiration
The Age of Unreason by Charles Handy
- Hardcover: 278 pages
- Publisher: Harvard Business School Press; First Edition, Fourth printing edition (December 1990)
- Language: English
- ISBN-10: 0875842461
- ISBN-13: 978-0875842462
- Product Dimensions: 7.8 x 5.2 x 1.2 inches
- Shipping Weight: 8.8 ounces
From Library Journal
Handy, a British specialist in organizational management, predicts that the 21st century will be the Age of Unreason. In an era when changes in business and society will be "discontinuous" or patternless, he suggests that our thinking must become discontinuous or "unreasonable" in order to use such changes to our advantage. While his thesis is generally in line with strategists like Tom Peters ( In Search of Excellence, LJ 2/15/83), Handy focuses more on the philosophy, rather than the mechanics, of adaptive change in society. His examples from the business world are interestingly extended to social institutions like marriage and family. Nicely written, this should be popular with open-minded management types. A good addition to management collections.
-Mark L. Shelton, Columbus, Ohio
Copyright 1990 Reed Business Information, Inc. --This text refers to an out of print or unavailable edition of this title.
-Mark L. Shelton, Columbus, Ohio
Copyright 1990 Reed Business Information, Inc. --This text refers to an out of print or unavailable edition of this title.
Product Description
Named one of the ten best business books of 1990 by Business Week, The Age of Unreason is now available in paperback. Charles Handy maintains that in an era of random change, it is necessary to break out of old ways of thinking in order to use change to one's advantage.
About the Author
Charles Handy is an author and broadcaster living in London. He is a Fellow at the London Business School where he was a professor for many years. His books have sold over one million copies around the world. He has been, in his time, an oil executive, a business economist, a professor, and Chairman of the Royal Society of Arts.
The Art of Innovation by Tom Kelley with Jonathan Littman
From getAbstract.com
- How to get the most out of a brainstorming session
- What personalities and roles are essential to forming an effective innovation team
- Which seven secrets lead to better brainstorming
With his tour through the inner workings of design firm and idea factory IDEO, Tom Kelley achieves the nearly impossible: He presents creative and innovative observations about creativity and innovation. Toss aside ordinary innovation books and tear into this beautifully constructed showpiece. Kelley distills the often amorphous concepts of brainstorming and teamwork into directives with honest-to-goodness real-life applications. His notions about prototyping are fresh, insightful and practical. His bigger-picture ruminations illustrate not only how organizations should work at innovation, but also how easily dumb bureaucracy can smash creative initiative. If the book has one failing it is that reading it can be a bit like watching a home movie of a friend's children: Your role is clearly to join in the adulation. That aside, getAbstract recommends this treatise as one of the few can't-miss books in the creativity genre.
About the authors
Tom Kelley is the general manager of IDEO, a design consultancy specializing in product development and innovation.Jonathan Littmann wrote The Fugitive Game and The Watchman, and contributes to Red Herring magazine.
The E-Myth Revisited by Michael E. Gerber
The E-Myth Revisited: Why Most Small Businesses Don't Work and What to Do About It by Michael E. Gerber (Mar 3, 1995)
- Paperback: 268 pages
- Publisher: HarperCollins; Third Edition edition (March 3, 1995)
- Language: English
- ISBN-10: 0887307280
- ISBN-13: 978-0887307287
- Product Dimensions: 7.9 x 5.3 x 0.8 inches
Technician, Entrepreneur, Manager
The reason most small businesses don't work is that they are run by a "Technician", someone who knows how to do the technical work involved in a job, without much thought to two other, equally important roles described in the book, the "Entrepreneur" and the "Manager". These are not separate people, but distinct elements of our personalities. In other words, while we might be biased towards one, we all have all of them, and to successfully run a small business, they must all play a role.
- The Technician is someone - a bicycle mechanic, computer programmer, cook, etc... - who is an expert in his or her craft. This often leads these people to go into business for themselves - they're good at what they do, and they know it, so why not reap the rewards of their labor? The technician is happiest doing the work they are good at and ignoring the rest, which is, in the end, a recipe for failure.
- The Entrepreneur is the dreamer, the one who sets out to do something new, who reaches for the stars. The Entrepreneur lives in the future, thinking about what could be (rather than in the present). The Entrepreneur is often frustrated by how slow the world seems to move.
- The Manager is the detail-oriented one, who dots the i's and crosses the t's, the one who remembers to pay the bills, and wants a well-organized world with no surprises; a world where things happen in an orderly, predictable manner.
All of these components are necessary in the founder of a business: without the Entrepreneur, you might as well keep working for someone else as a Technician. Without any technical ability, the Entrepreneur must rely on others to get anything done, and without the organizational abilities of the Manager, the other two would probably find themselves with the electricity in the office turned off because they had other things to do than pay the bills.
The "Franchise Prototype"
If the business is to thrive, it must move beyond the founder: a business that is wholly dependant on the founder and their abilities is not really a business, but rather a very burdensome job for founder. Every time you are out sick or take a vacation or are otherwise absent, the business stops too.
A real business is one where the founder has created a system so that the business can run itself without their constant presence. The book describes this as the "Franchise Prototype". The inspiration for this comes from franchise businesses such as McDonalds, Subway, Burger King and so on, where there are manuals describing in minute detail how to run the business, so that customers will have the same experience the world over. The book does not suggest that you necessarily try and create a business to be franchised, just to treat it as if it were in some critical aspects: you need a well-documented system to run the business. Instead of running the business (fixing bicycles, writing computer programs, cooking), you need to work on the business - you need to spend time creating a business that is an entity that can operating and thrive on its own.
The Model
The model your business should follow must have these attributes:
- It provides consistent value to your customers - it can't be great one day and lousy the next.
- It should not require brilliant people to work: certainly, you may need someone with some bicycle mechanic training if you're running a bicycle shop; the idea is not to have people with no skills, but simply to not depend on having people of rare talent in order to work, and indeed to utilize the people with as little skill as possible. The system is what takes ordinary people and enables them to consistently do high quality work.
- Everything about the business should be documented in operations manuals.
- Everything about the model should be uniform: from the dress code to the facilities, everything should follow previously agreed upon standards.
Innovation, Quantification, Orchestration
Innovation is creativity applied to providing a product or service in a more efficient, higher quality, or more profitable way. You need to be continuously innovating in order to improve your business.
Quantification is combined with innovation to determine what actually works. If you're not measuring it, how can you tell if a change is good or bad for business? If you spend money for a new web site, and you're not measuring how much money is coming in through it, how can you tell if the money spent on it was worth it? You need as much data as possible - with time you'll learn what the critical numbers are, and be able to tell how things are going by keeping an eye on them.
Orchestration is the standardization of what works: once you've tried and measured some particular innovation, it must become part of "standard operating procedure". Once something has been orchestrated, it becomes a part of the business that everyone has learned and knows, not some secret recipe that lies only within the mind of the founder. This ensures consistent quality for your customers.
Aims, Objectives, Opportunities
The author explains that in order to make your business work, you must have a "Primary Aim" in life - not business, but your life. Without that, your business may come to consume you.
Your "Strategic Objective" is what you want to do with the business in order to fulfill your "Primary Aim" in life. This could be simply to sell the business on for a million dollars after 10 years, or develop a business that generates $100,000 in annual revenue without your involvement, or whatever else will allow you to live your life as you see fit. There are several important considerations, the first of which is money, and how much if it you are aiming to make.
The second thing to consider is whether a given opportunity is, as the book says, an "Opportunity Worth Pursuing"; something that can meet your financial needs, first and foremost. The key question to ask is: "does the business I have in mind alleviate a frustration experienced by a large enough group of consumers to make it worth my while?". Another key consideration when determing what kind of business your in, is to look not at the thing you sell, but the feeling you create for your customers about your product and business. An insurance company sells you a financial instrument, but the feeling they are really selling is "peace of mind". A flashy car is more than just a bunch of metal and plastic, it's an image, and a feeling.
Organization Strategy
Rather than starting out and just "jumping in", you need to determine, from the beginning, what roles your company needs, and who will fill them. The example given in the book lists 12 positions, and explains how they are divided up between two founders in a company, who must not only fill those roles, but define them so that they can, as the company grows, easily find people to place in those positions, with a well-defined structure and environment for them to thrive in. "Replace yourself with a system", to quote the book. Each position should have a "position contract" with a list of things for which that position is accountable, and even if few people are performing multiple jobs, they should agree to and sign those contracts.
Management Strategy
The management strategy outlined is once again, a matter of having systems in place. Certainly, you need people that believe in what your company does to make those systems work, but having a system in place that doesn't require a fantastic manager.
People Strategy
The people strategy is outlined as a sort of "game" to be played
- The 'game' is not simply a condescending way of getting people to do what you want.
- Make sure it's something you'd be happy to do yourself; otherwise other people wont' want to participate either.
- Allow for rewards and victories, but don't make it so that people can reach the 'end' of the game.
- Be open to change when it's necessary.
- It is not self-perpetuating - it has to be nurtured.
- It has to make sense. Weird and arbitrary rules discourage people.
- There has to be fun involved - maybe not always, but without it, work is only dreary, something to get away from as early as possible every evening.
Marketing Strategy
You must speak to people's unconscious minds - all the rational arguments in the world won't win over someone whose unconscious mind has already said 'no'. You need to learn about your key demographics, and how they think and regard not just products, but the world around them. You need to gather data about who they are. Learn about how other people market to similar demographic targets.
Systems
The book discusses three kinds of systems that are important for your business, with an eye to adopting them in order to make things ever more predictable and consistent.
- Hard systems are physical things that systematically resolve problems and free people to concentrate on meaningful work for your customers. They are things that are introduced to solve time consuming problems that do contribute to the success of the company. An example might be a tool to make cleaning a kitchen faster and more efficient.
- Soft systems are "people systems" - those practices and methods put in place to give people a framework for doing their job. These systems, in many cases, make it so that relatively less-skilled people can do high quality work, because they're following a system created by an expert.
- Information systems are systems put in place to gather information and data about the business and its operations. With actual data, it's possible to test different hypothesis and see which ones work the best. With data, it's possible to know how the business is doing compared to the same metrics at an earlier date in time.
Review
"Gerber loves to exhort people to develop powerful visions for theircompanies." -- Fortune
"Thanks to Gerber l have freed up over three hours a day, significantly increased my sales, more than doubled my bottom line, and been able to take my first vacation in four years." -- Trish Lind, T. Lind Graphics, St. Paul, Minnesota
"Without a doubt, the most important message for our company over thenext decade." -- The John Hancock Insurance Group
"Thanks to Gerber l have freed up over three hours a day, significantly increased my sales, more than doubled my bottom line, and been able to take my first vacation in four years." -- Trish Lind, T. Lind Graphics, St. Paul, Minnesota
"Without a doubt, the most important message for our company over thenext decade." -- The John Hancock Insurance Group
Product Description
In this first new and totally revised edition of the over two million copy bestseller, The E-Myth, Michael Gerber dispels the myths surrounding starting your own business and shows how commonplace assumptions can get in the way of running a business. Next, he walks you through the steps in the life of a business -- from entrepreneurial infancy through adolescent growing pains to the mature entrepreneurial perspective: the guiding light of all businesses that succeed -- and shows how to apply the lessons of franchising to any business, whether it is a franchise or not. Finally, Gerber draws the vital, often overlooked distinction between working on your business and working in your business. After you have read The E-Myth Revisited, you will truly be able to grow your business in a predictable and productive way.
About the Author
Michael E. Gerber is the founder and CEO ofE-Myth Worldwide, based in Santa Rosa, California. He is also the bestselling author of The E-Myth Contractor, The Power Point, The E-Myth, The E-Myth Revisited, and The E-Myth Manager, as well as a highly sought-after speaker and small business revolutionary.
The Innovator’s Dilemma by Clayton M. Christensen
Key Points
- Disruptive technologies or innovations are innovations that upset the existing “order of things” in a particular industry. The usual process is a lower-end innovation that appeals to customers who are not served by the current market. With time, because the capacity/performance of the innovation exceeds the market’s needs, the innovation comes to displace the market incumbents.
- Incumbents generally don’t react to disruptive innovations until it’s too late, because they don’t represent an interesting market, being low end and often low cost. One successful strategy might be to hive off a separate “company within a company” that is responsible for the firm’s response to the disruptive technology. A smaller, more nimble organization is better placed to work in the initially smaller and less lucrative market that the innovation is creating.
Summary
Initially, Christensen examines why firms fail despite being leaders in their market, willing and able to compete with the best, and capable of continuous innovations within their industry.
“Sustaining technological changes” are not the problem for leaders in an industry. Time and time again, they showed their ability to compete in the high end of their market, innovating and at times dealing with radical technological changes. Yet, because these are sustaining innovations, they are almost always best utilized by the firms that already have the best position in an industry. These are changes that follow an “s-curve”, increasing performance as their customers come to expect. New market entrants attempting to compete by means of these sorts of innovations often fail, because the established firms nearly always have more money, more established relationships with clients, a better reputation, and more technological prowess in the market. “The leaders … did not fail because they became passive, arrogant, or risk-averse or because they couldn’t keep up with the stunning rate of technological change.”
However, the story changes radically when it comes to what are called “disruptive innovations” - these are the “changes that toppled the industry leaders”. These are not radical improvements - quite the contrary, disruptive innovations are usually an innovation that are either so much cheaper that they open a new market, or start in a niche that the industry doesn’t care about because it’s too small. However, often the performance of the disruptive technology grows faster than users’ needs, with time catching up to, and surpassing the more high-end or mainstream technologies that are the domain of industry leaders.
An example that has nothing to do with “high tech” comes from the mechanical excavator industry. This industry was dominated by steam shovels until the 1920’s, when gasoline powered engines began to replace them. This was, however, not a disruptive innovation, but a sustaining one, even though the design of the machines changed radically from that of a steam-powered system of cables, to that of a gasoline engine driving a system to extend and retract the cable connected to the bucket. The new engines were more capable than the old ones, and were better at doing more work more reliably, and cheaper than the old system. Despite the radical change in the industry, the same firms that were strongest in steam shovels stayed on top. The disruptive change came with the introduction of hydraulic-actuated systems after World War II - a change that eliminated nearly all of the established players by about 1970, in favor of companies that entered the market with hydraulics. The first hydraulic-based excavators were less capable than the cable systems that were in existence, and certainly couldn’t compete with them. However, they were small enough that they could be deployed for jobs previously done by hand, opening up a new market, in which the desired attributes were quite different from the big jobs that the cable actuated excavators were used for. The technology involved in hydraulics continued to improve, however, and with time eventually equaled and then surpassed the needs formerly filled by cable-based systems. In the meantime, though, the established firms were still going strong, and didn’t do much, if anything, to deal with the new competitor (because it wasn’t really seen as a competitor, not being sufficient for their existing clients’ demands) until the new arrivals were “in the midst of their mainstream market”. By the time the established companies introduced their own hydraulics, however, it was too late, and the later entrants were by then better positioned with the new technology.
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