Selling the Problem vs. Selling the Solution

Entrepreneur and investor Dave Bailey has written an outstanding column for Medium.   Bailey addresses the importance of focusing as an entrepreneur on the problem you are trying to solve.   He argues that startups often become enamored with their solution or their technology in particular, but they don't explain adequately the customer need that they are addressing.  What pain point are you alleviating?  What problem are you solving for the user?   How will take away a roadblock, inefficiency, or frustration that users are experiencing?   Bailey explains:

As Steve Jobs said: you have to start with the customer experience and work backwards to the technology. Jobs understood that when you try to reverse-engineer the need statement from the product, it’s too easy to lose touch with reality.

After 6 months of intense product development — this happened to me. My product was my baby and I wanted to talk about with everybody.  When I didn’t lead with the need, it was often greeted with confused looks. I was giving people the ‘answer’ without telling them the question — like a weird game of ‘Jeopardy’.

Even when I did start with the need, I only afforded it a sentence or two. I’d describe the need to perfectly frame my product. In other words, I did the exact opposite to Steve Jobs. At when the confused looks continued, I got defensive. ‘Trust me, it’s a problem — ok?

Bailey recommends writing a customer need narrative.  He argues that it's more than one sentence.  It's a clear and compelling paragraph that "outlines a thesis on how to make peoples’ lives better."  Certainly, many entrepreneurs fall in love with their idea.  They get excited about the technological innovation.   Unfortunately, many forget that the product is simply a means to an end.  Keep the end in sight, with the end being a better experience for the user.   Sell your problem first, not your idea.  

Herb Kelleher on Market Share

Entrepreneur Joel Gascoigne tweeted a quote from Southwest Airlines co-founder Herb Kelleher yesterday. The quote describes Kelleher's views on the pursuit of market share vs. profitability. I think he's hit the nail right on the head.

The Dark Side of Board of Director Mentoring Relationships

Joann Lublin wrote a Wall Street Journal article this week titled, "Boards Try Buddy System to Get Newcomers Up to Speed."   Lublin describes how some boards have assigned mentors to new directors, so that experienced board members can help newcomers assimilate to the culture of the group.   Lublin offers the example of Carol Martz mentoring new director Amy Chang at Cisco Systems.  She explains, 

More boards are pairing new members like Ms. Chang with seasoned mentors like Ms. Bartz as they scramble to improve their oversight of management in the face of intensified investor scrutiny. Board buddies can help newcomers figure out the boardroom’s cultural norms, power brokers—and even the right place to sit.  Mentors make sure “you don’t come in as a bull in a china shop,” observes Steven R. Walker, managing director of the board services group at the National Association of Corporate Directors.

I certainly understand the importance of helping new directors learn the ropes when joining a board.  These mentoring relationships certainly appear to have a good intent.  However, I do have some worries about such systems.  What if the mentors provide the wrong message?  What if they encourage newcomers to refrain from challenging the status quo, expressing dissent, or asking the tough questions.  In the article, Martz acutally encourages Chang not to apologize for asking a challenging question.  However, some directors might provide very different advice.  They might promote norms that include conflict avoidance and deference to management.   Long-time directors might protect the harmony of the group, and in doing, send a signal that speaking up is not welcome.  Rocking the boat might not be the right strategy during your first board meeting. However, discouraging people from ever rocking the boat might also be a very dysfunctional dimension of some of these mentoring conversations.  

Curiosity Affects the Brain, Enhances Learning

Several years ago, Daisy Yuhas wrote an interesting article about new neuroscience research regarding curiosity and leanring. I came across the article today, and I thought it was worth sharing the key lessons. Yuhas explains the findings from a study about how intellectual curiosity affects the brain and shapes learning.

Neuroscientist Charan Ranganath and his fellow researchers asked 19 participants to review more than 100 questions, rating each in terms of how curious they were about the answer. Next, each subject revisited 112 of the questions—half of which strongly intrigued them whereas the rest they found uninteresting—while the researchers scanned their brain activity using functional magnetic resonance imaging (fMRI).

During the scanning session participants would view a question then wait 14 seconds and view a photograph of a face totally unrelated to the trivia before seeing the answer. Afterward the researchers tested participants to see how well they could recall and retain both the trivia answers and the faces they had seen.

Ranganath and his colleagues discovered that greater interest in a question would predict not only better memory for the answer but also for the unrelated face that had preceded it. A follow-up test one day later found the same results—people could better remember a face if it had been preceded by an intriguing question. Somehow curiosity could prepare the brain for learning and long-term memory more broadly.

To me personally, the implications are quite profound.  As a professor, I should strive to tap into and stimulate a person's intellectual curiosity about a particular subject.  If I can do that successfully, they may learn more effectively.   Similarly, we can leverage these findings as we think about how we train workers in our organizations.  If workers approach a new task with curiosity, then perhaps they will learn the required skills more effectively.   

Scott Galloway's "Amazon Clinic"

For those intrigued by my post yesterday regarding Amazon and possible future acquisition targets, you should take a look at NYU Professor Scott Galloway's talk titled "Amazon Clinic."  He presents some fascinating and startling data on the state of retail in the United States, including the dramatic overbuilding of malls in past decades and the steep decline in foot traffic over the past few years.  

Bryant Alumni Reception in Minneapolis

Several days prior to running the Twin Cities Marathon, I'll be hosting a reception for Bryant alumni in Minneapolis along with Robin Warde, Director of Alumni Engagement at Bryant.  The event will take place at 4 Bells in Minneapolis on Thursday, September 28th.  Hope to see many alumni, including former students, at this event.  For more information, click here.  

Andrew Curtis Podcast

If you are interested, Andrew Curtis interviewed me for a recent episode of his podcast.  You can access it via iTunes here.

Will Amazon Buy Nordstrom Next?

Back on May 11th, NYU Professor Scott Galloway appeared on Kara Swisher's Recode Decode podcast. During that conversation, he predicted that Amazon would acquire Whole Foods. One month later, Jeff Bezos made his move. Amazon purchased the organic supermarket retailer for $14 billion. Yesterday, Professor Galloway appeared on Swisher's podcast again. This time, he predicted that luxury retailer Nordstrom might be Amazon's next big acquisition target. He explained, "It would be cheap, it’s in Seattle, they’re operationally very sound, it’s a great company and they’re [Amazon is] trying to establish relationships with high-end brands, which they have been unable to do. Nordstrom has those and a lot of credibility, and a lot of wealthy households have a Nordstrom credit card."

Like many brick and mortar retailers, Nordstrom has experienced a sales slowdown as mall traffic has declined. In fact, news reports in June indicated that the Nordstrom family was considering taking the company private. Earlier this week, the company announced that it was opening a test store next month called Nordstrom Local. The Wall Street Journal explained the concept: 

Nordstrom Local, scheduled to open Oct. 3 in West Hollywood, Calif., will span 3,000 square feet, far less than the 140,000 square feet of one of Nordstrom’s standard department stores. It will contain eight dressing rooms, where shoppers can try on clothes and accessories, though the store won’t stock them. Instead, personal stylists will retrieve goods from nine Nordstrom locations in Los Angeles, or through its website. The stylists can also pull together looks for shoppers through a “style board” app.

Is this acquisition a real possibility? I can certainly see Professor Galloway's logic. However, as he notes in the podcast, the company is led by the Nordstrom family. Indeed, the firm's ownership structure could be a formidable obstacle. The Nordstrom family owns roughly 1/3 of the company, and family members continue to lead the retailer. Amazon would find it very difficult to acquire the company without the family's consent. However, Galloway's comments do make you wonder whether other retailers might be acquisition targets. As Amazon contemplates opening a second headquarters with up to potentially 50,000 employees, it's clear that Bezos' ambitions know no limits. Could a luxury apparel retailer be next? Nieman Marcus, anyone? They have been struggling. They announced an exploration of strategic alternatives several months ago. Perhaps they might be a target. They are not as operationally sound as Nordstrom's, and they have considerably more debt, but perhaps it's a more attainable target.

Three Ways Leaders Can Build Trust

I was asked a very important question today during a presentation to a group of senior finance executives from a wide array of Fortune 500 companies.   One person asked, "How does a leader build trust?  What are the most important and effective ways to do so?"  I offered three suggestions. 

1.  Acknowledge your own mistakes.  Be transparent about those situations in which you stumbled, and talk about how you learned from those incidents.  They will come to trust you and be willing to come forward to talk about their concerns and failures if you acknowledge ways in which you struggled during your career.  

2.  Avoid engaging in the charade of consultation (a phrase coined by my friend and best-selling author Michael Watkins).   In other words, if you have already made up your mind about a decision, don't engage the team in a lengthy analysis and dialogue, all the while steering them to your preordained decision. You're wasting their time and insulting their intelligence.  They recognize that the decision has already been made, and their trust in you will erode if you engage in this charade. 

3.  As Teddy Roosevelt once said, "“People don't care how much you know until they know how much you care."  In other words, they won't trust you simply because of your competence.  You have to show them that you care about them as individuals.   If they believe that, then they will trust and follow you.  

Picking the Right Job for You Based on an Interesting Interview Question

Christa Quarles, CEO of OpenTable, described her favorite job interview question recently in an interview with CNBC. She likes to ask candidates: "What part of this role do you love and you can't stop doing? And what part do you hate doing?" Quarles knows the most important facets of the role she is trying to fill. If someone loves those critical facets of the job, then Quarles feels comfortable with that candidate. In short, she wants to make sure that the candidate's passion matches the needs and demands of this particular role.

However, the second part of the question is important as well. What do you hate? As she says, everyone has certain work that is less desirable to them. Quarles goes on to ask the candidates how they will manage those aspects of the job... work that must be done, but understandably, may not be the type of activity about which the candidate is passionate. 

I'm struck by this question, because I think every job seeker should ask themselves this question during the search process. The candidate should be trying to understand the job description and the demands of the role, and they should be asking themselves if they will be excited about enough of that activity to make the work meaningful and fulfilling to them. The candidate also has to think about the negative aspects of the job and whether they can handle that work without becoming frustrated or disengaged. No one wants to work diligently to land a job that they will, for the most part, hate doing.

Do You Find Your Calling or Craft It?

I listened to an episode of the Hidden Brain podcast in which Shankar Vedantam interviewed Yale Professor Amy Wrzesniewski.  The episode focuses on the notion of finding your calling.  When it comes to choosing a job or profession, many people advocate finding your passion.  According to this line of thinking, if you search long and hard, you can discover your vocation or calling, and as a result, you will find your work meaningful.   If you do meaningful work, then you will be happier, more engaged, and more productive. What's the problem with that line of thinking?  Well, what if you spend a great deal of time pondering your future, and you cannot discern your calling?  What if you simply aren't sure?  Many young people become incredibly frustrated because they simply aren't sure what their calling is.  They don't know how to find it.  

Professor Wrzesniewski has a different point of view, one that bears serious consideration.  She has studied how people find meaning in their work.  Wrzesniewski argues that some people engage in a practice she calls "job crafting."  On the podcast, she explains her study of workers who cleaned the halls and rooms at a hospital.  When asked to describe their job, some workers talked strictly about the responsibilities listed in the job description.  In contrast, others defined their job differently.  They talked about how they engaged with doctors, nurses, patients, and the patients' families.  They viewed their job as involving responsibilities beyond those mandated by their supervisors.  According to Wrzesniewski, these workers had "crafted" their job in a way that felt much more meaningful to them. They were part of the process of caring for these patients, not simply the person responsible for washing the floors or taking out the trash.   

Wrzesniewski argues that we can all engage in the job crafting process.  In so doing, we can make meaning in our work.  We don't necessary find meaning only by searching our soul to discover our calling.  We can also find meaning by shaping how we define the job we do, the roles we play in an organization, and the constituents with whom we interact.  Wrzesniewski argues that job crafting often involves thinking how we interact with others at our organization.  We often find meaning in those relationships and in how we serve various constituents.  

We Dwell on the Negative

New research from Stanford Professor Zakary Tormala and graduate student Aaron Snyder examines how individuals weigh the pros and cons when making a decision. They found that people tend to dwell on the negative. According to their research, "People feel more conflicted when faced with many positives and a few negatives than they do when faced with many negatives and a few positives."   Tormala explains: "“Suppose you are evaluating a person — for example, a job candidate — and you make a list of his or her positive and negative qualities. Even assuming you come up with positives and negatives that are equally relevant and compelling, the negatives tend to carry more weight.”   Adding just one or two negatives to a list of many positives can cause people to feel conflicted, uncertain, and ambivalent about a decision.   Put simply, we dwell on those negatives, even if they are few in number.  

Is there something inherently wrong with this bias toward negativity?  I worry that it may lead to much indecision, and that inability to take action can be a problem in many situations.   Moreover, it may cause us to lose confidence in our ability to make the right call in tough circumstances.  We might exhibit far too much risk aversion in certain situations because of this negativity bias.  On the other hand, perhaps the mind has found a way to prevent us from making rash decisions.  It might just be pumping the brakes for us a bit, so that we don't simply look at the world through rose-colored glasses, as we are want to do in many circumstances.  How do we find the right balance?  Often, the team around us can help us.   Some people are inherently more positive than others.  They can push back when some are dwelling on the negative.  Similarly, some members can challenge those who are exhibiting overconfidence or excessive optimism.  

A Strategy for Solving Problems Creatively

Theodore Scaltsas wrote a Harvard Business Review article last year in which he outlined an interesting strategy for solving problems creatively. Scaltsas explains that the brain mines our past experience for possible solutions when it faces a problem. Yet we think of creativity as inventing entirely new solutions to perplexing challenges. Are we really inventing something new each time we come up with an ingenious solution to a vexing problem? Perhaps not. Scaltsas explains: 

So how do new solutions emerge? The answer to that question is rooted in how one approaches the problem. Although the brain’s solution-generating mechanism is inherently predictive (bringing familiar solutions to a given problem) you can also address an intractable problem by reinventing the problem itself. Doing so coaxes the brain into proposing old solutions for types of problem these old solutions have not solved before.

One way of triggering these solutions is to imagine ways out of the fix you’re in by imagining that the circumstances blocking your progress are being lifted one by one. This produces different versions of the challenge. One of these new hypothetical versions may well resemble a type of problem that you have solved in the past. Your mind will then fire out a whole new set of solutions, one or more of which may work. If the solution you select for the new version of the challenge is untypical for the original version, it can certainly qualify as a creative solution to the new one.

What Scaltsas has proposed is essentially a strategy for helping people reframe complex problems. By reframing in this manner, one triggers the mind to search for solutions embedded in our past experience. To make this concept more concrete, Scaltsas uses a famous historical example. He recounts the story of Odysseus and the Trojan Horse. He explains how Odysseus reframed the problem, and thereby came up with a deceit-based strategy rather than a combat-based plan for defeating the enemy: 

The lesson is not that the Trojan Horse was a new solution per se. Misdirection of that kind is the staple of any con artist. The creativity lies in the fact that Odysseus was able to transform the 10-year-old problem of overpowering the Trojans into a problem of deceiving them, which opened up a whole new set of ready-made solutions that he was already master of. And given the 10 years the Greeks had spent failing to win the war, Odysseus was able to make a convincing case that his treating the core problem not as one of combat but as one of deceit offered an unexplored path to success.

Homes for our Troops

Exactly one month from today, I'll be running the Twin Cities Marathon (October 1st).  The marathon represents one of my goals during this sabbatical year from Bryant University.  I'm running to raise funds for an organization called Homes for our Troops, an amazing and well-managed charity that helps build specially adapted homes for severely disabled veterans.  I hope you will join me in support of this incredible organization, rated four out of four stars by Charity Navigator.   You can donate by clicking here.  Thanks so much for your support!  

Avoiding Analysis Paralysis

University of Chicago Professor Sanjog Misra commented to the business school's magazine about the problem of analysis paralysis.  Professor Misra offered an interesting perspective on how to avoid this classic decision trap.  He teaches a class focused on the use of algorithms and data analysis in marketing.  Misra argued that you have to be very clear about the question you are trying to answer BEFORE you begin your analysis.   Moreover, he advocated for more clarity about the answer you are trying to achieve.  Misra recommended trying to sketch out the parameters of an idea answer before you start evaluating the data.  He explained:

This isn’t a totally new idea, just new to analytics. In the business world, one wouldn’t want to put out a call for proposals with no details about what he or she is looking for. We wouldn’t want to wade through a million proposals to decide what suits our needs. That would be silly. Instead, when you put out a call for proposals or a purchase order, you typically outline a very detailed specification of what you want. Similarly, it’s worthwhile speccing out the “answer” you are looking to find. You don’t go around aimlessly.  One of my interpretations of Peter Kennedy’s 10 commandments about data analysis is, “Thou Shall Not Fish.” That’s something I emphasize in my classes. Of course, sometimes mining for data is actually what’s required. So if the objective is to fish, then you should be fishing. If it isn’t, the commandment applies.

How Confident Should We Be in Our Hiring Decisions?

Hiring decisions are so critical for leaders, yet they often prove to be the most vexing choices that individuals have to make. Organizations are constantly seeking better ways to screen candidates. Today, I came across a fascinating quote from renowned behavioral economist Richard Thaler about our ability to make good hires. Thaler refers to some interesting research about the National Football League draft. Here's his comment:

“Take all the [NFL football] players picked at a certain position, and rank them in the order in which they’ve been picked. Now ask yourself, ‘What’s the chance that nth player is better than the n + 1?’ If teams were perfect, it would be 100 percent. If they were coin flipping, it would be 50 percent. Across all the drafts and all the positions, the answer is 52 percent. The next time you’re hiring somebody and you’re absolutely sure that this person is the answer, ask yourself whether you have as much information as NFL teams, who got to watch the guy play [in college] for three years.”

Now that is a sobering commentary.  Consider how much work the NFL executives and coaches do in preparation for the draft.  It is an incredible amount of research.  Yet, the success rate clearly doesn't prove to be very good.  The factors that trip up NFL general managers are similar to the issues that impair corporate hiring decisions.  Can the person fit our system?  Do they have the right attitude as well as talent/skills?  Can the person be coached?  Do they have a great resume, but perhaps lack certain key intangibles?  Do they excel in certain areas, but are those the right metrics on which we should focus?  

High Status Firms: Hiring Advantage but Retention Challenge

Scholars Matthew Bidwell, Ethan Mollick, Roxana Barbulescu, and Shinjae Won have written a new paper titled, “I Used to Work at Goldman Sachs! How Firms Benefit From Organizational Status in the Market for Human Capital.” The scholars discover, unsurprisingly, that high status firms have a powerful hiring advantage. Knowledge@Wharton summarizes the key finding: 

If a firm is high status, it possesses a hiring advantage (“preferential labor market access” in the paper’s language), but the advantage is not what one might think. It isn’t better pay or more interesting or challenging work: It’s the belief that having worked for such an employer can help you get a better job later on.  “You essentially can pay people in reputation,” says Mollick. “They will take less salary early on because the reputation will result in a higher salary later.” 

How substantial was the impact of status in the employment choices made by MBA graduates in the study? According to the authors, the impact was especially critical in investment banking (shocker!), "where respondents’ odds of accepting a job offer nearly doubled with a one-unit increase in their perception of the firm’s reputation."

Interestingly, though, the hiring advantage that high-status firms possess turns into a retention disadvantage later on in people's careers.   These workers may value status over pay when they are looking for a job right out of school, but eventually, they want firms to show them the money!   The scholars found that, "Workers’ pay rises faster with seniority in high-status firms than lower-status firms."    What's going on?  Now these workers have the high-status firm on their resume.  They view themselves as highly attractive candidates on the job market.  Indeed, they probably do have many outside opportunities that are quite lucrative. Thus, they demand high wages if the firm wishes to retain them.  Of course, many of these high-status firms that recruit at top business schools understand that retention will be difficult.  They don't even mind as people leave in many cases.  They cultivate their alumni network, much as a university would.  Why?  After all, these former employees who leave a banking or consulting firm become potential clients for the firm when they move to a different company.  

Failure Has Become Fashionable

Everyone is talking about becoming more tolerant of failure these days.  You read it everywhere.  Failures are really learning opportunities.   You learn more from failure than success.  You have to be willing to fail if you wish to innovate.  Experimentation entails some failures; without them, you won't create anything truly bold.  You have to make it ok to fail.  

Is it really true? Should failure be acceptable in your organization?  HBS Professor Amy Edmondson has noted that there is a spectrum of reasons for failure.  Some failures are truly preventable.  They result from people knowingly deviating from procedures or not paying close enough attention to specifications.  These types of failures are blameworthy events.  They are not acceptable.  At the other end of the spectrum are intelligent failures.  These failures result from the experimentation process.   In these situations, people are trying to learn through hypothesis testing or exploratory experiments.   These types of failures, according to Edmondson, are praiseworthy events.  

Are all experiments praiseworthy?  Of course not.  Some experiments are well-designed and carefully  implemented.  Others are hastily arranged and not well-designed.  You want to encourage people to make smart bets.  They should be engaging in enlightened, disciplined trial and error in the iterative process.  They shouldn't just be haphazardly trying new things.  Failures that emerge from a well-designed experiment are praiseworthy events.  We should not send the message, though, that all testing is good testing.  We should encourage people to put some thought into how they execute tests, experiments, and prototypes.  Are they designed in such a way to elicit highly useful user feedback?  Was data collected in an unbiased way, or were people simply trying to confirm what they already believed?  Did people pick the right sample, and were appropriate controls chosen if a hypothesis was  being tested?  These types of questions need to be asked when people fail during the iterative process.   We want to tolerate certain types of failure because we want to maximize learning. However, poorly designed tests and experiments do not lead to effective learning.  

Supporting Homes for our Troops

Thank you so much to all my readers who have contributed to my campaign to support Homes for our Troops.  I'm running the Twin Cities Marathon on October 1st to support this amazing organization that builds specially adapted homes for severely disabled veterans.  I'm very grateful for your contributions to date.  If anyone would still like to contribute or learn more about my effort, you can visit my campaign page here.  Thanks!  

Is It a Curse to Be Labeled a Star?

Jennifer and Gianpiero Petriglieri have written a terrific Harvard Business Review article titled, "The Talent Curse."   In this essay, they argue that being labeled as a "high potential" or "future leader" can be detrimental to many talented employees.   The label changes their behavior and mindset, and as a result, their stress level increases, performance suffers, and attitude toward the organization sours.  They explain:

In an age when companies wage wars for talent, it is hard to acknowledge that for some people, being recognized as talented turns out to be a curse. But it does. Aspiring leaders work hard to live up to others’ expectations, and so the qualities that made them special to begin with—those that helped them excel and feel engaged—tend to get buried. They behave more like everyone else, which saps their energy and ambition. They may start simply going through the motions at work—or, like Thomas, look for an escape hatch. This curse strikes the talented even in companies that invest heavily in their development—places where executives are sincerely dedicated to helping people thrive.

What are the signs that being labeled as a star may actually be a curse for you?  They cite three symptoms of trouble. First, are you determined to prove that you are worthy of your label as a star, rather than focused on simply using your talents effectively to achieve personal and organizational goals?  Do you stress short term performance at the expense of continuing to learn and grow?  Second, have you become very focused on your image?  Do you want to be your authentic self, but find yourself trying to be someone else?  Third, are you going through the motions now, with aspirations of eventually doing meaningful work down the road?  Have you convinced yourself that it's okay that you aren't passionate about your work at this point, because you will have a chance to find passion and purpose in the future?  

In sum, you have to ask the question: Has the star, high potential, or future leader label fundamentally changed my behavior?  If so, you have to take a hard look at your mindset, attitude, and behavior.