OURGANIZATION Changing the way organizations think of themselves

So New York City Mayor Mike Bloomberg decides to learn to code. Should the whole of New York City follow him?

Will Mayor Bloomberg start a kickass internet company?

With the number of internet start up these days, programming languages are becoming increasingly more important. It’s the code that make stuff work. That makes your Facebook news feed, that helps Amazon learn all the things that you love, helps Google target its advertising better.

But in the complexity of today’s world, it’s easy for many people to think that more code is better. Certainly more programmers might be a desirable thing since increasing the talent pool might just drive costs down, create more competition and ultimately better products. But another thing is certain – if you have not coded anything in your life you will have to realise that coding is not what you want to know how to do. You want to know how to make things work. In as little code as possible. None will be the ideal scenario.

Some programmers I know call themselves the laziest people in the world. And for very good reasons too. Chris Pine who wrote a tutorial (which I have downloaded and used) for learning Ruby certainly believes so. Here are some fundamental rules that they live by and that we can apply in our daily lives.

Organize your code

Ever wondered why codes often have lots of indentation in them? It helps keep things organized and make finding mistakes or bugs easier. Does your process and daily habits have proper structure and body? Does it help you find and detect mistakes or inefficiencies? Organizing your thought process would be the best place to start.

Don’t create complexity for the sake of it

Many organizations, especially the larger ones have processes for the sake of having them. And to make matters worse, it’s also very complicated. Life too. Tim Ferriss advocates checking your routine every 2 weeks and empty your life of all that you don’t need. Life is easier that way. But he also warns that “Idleness is not the goal”.

“For me, the objective has always been: How do you improve per-hour output to the greatest extent possible? And how do you concurrently design the lifestyle that you want to have? Because I do believe that life is intended to be enjoyed. For many people, they love what they do, but they don’t want to do it 80 hours a week. For them, it would be dialing back from 80 to 40, let’s just say. Whether that’s a teacher, pastor, or writer — just being more efficient and effective with your time.”

Don’t repeat yourself and create waste

Batching is very commonly used as a manufacturing term. But batching is basically grouping a process flow to maximize use of available capacity. You have 10 credit cards with 10 different statement dates. Sure you would like to maximize the interest-free credit period, but does that mean you go to the bank 10 times a month? At some point there will be costs towards attaining a potential benefit. Just make sure you measure both direct (money or other resource) and indirect costs (time, attention).

Be AGILE -

Working software is the best measure of progress. Teams need to keep working together to solve issues that customers face. This is very similar to Facebook’s mantra of “Stay the course, Keep shipping”. If they were not agile, how you think they support 900 million users everyday who spends 175 million hours each day?

It works or it doesn’t

What gets measured gets acted upon. If you don’t know what works, how do you know what to do? In order to find out what works or what doens’t teams have to be able to monitor how well they are doing something. If your code solves problems and creates great products, you become Google. If it doesn’t it’s a piece of shit.

And if your customers think you’re a piece of shit, you’re a piece of shit.

This is what Rajeev Peshawaria has to say about having too many bosses and too few leaders:

In stead of worrying about how to maximize their personal power, or to create great results themselves, authentic leaders make it their full time job to pro-actively shape the three pillars of sustainable success:

1.    Setting Direction (The BRAIN of a business)
2.    Designing the Organization (The BONES of a business)
3.    Creating a Culture of Excellence (The NERVES of a business)

Today’s world is too complex for any one person to have all the answers. To succeed today, one must be willing to share leadership.  Leadership is something that grows with sharing – the more you share it, the greater and more powerful it becomes.  Mere bosses do not understand this.

Guy Kawasaki encourages a pre-mortem

Kevin Systrom says fail fast and aggressively, that dealing with real users is the most motivating thing about Instagram

What if you don’t have users or customers? Eric Ries says creating a feedback loop – build, measure, learn, and only build what you absolutely need to avoid only.

I say, do all of the above.

Premortems

We’re all very familiar with postmortems, but with 20/20 hindsight and no opportunity to change the actual results, what’s the point? Expect a disaster and mitigate the risk.

1. Pretend you failed your next big initiative
2. List causes and reasons for failure
3. Remedy those most likely to happen in advance

It’s important to be ready for a screw up. You can solve a problem better if you’ve prepared for it, just like you do in a written examination. It’s also not the same as pre-launch risk analysis because risk analysis depends largely on what you know – you have 150 ‘A’ cards and need 100, ratio of 1.5:1, you tick “OK” because you know you’re covered.

This is different to

“…our campaign failed because the brochures failed to arrive as scheduled, 3 team members went AWOL, the PA system had some trouble which Tim and Dennis sorted out an hour before start, thus, we only achieved 30% sign ups of our original target.”

Not expecting disasters is a failure of planning. You learn when you fail, but you can also learn as you succeed and it’s often less painful.

Fail fast and aggressively

What it really means is to learn as quickly as possible what customers DON’T need and what makes them happy. Eliminate wasteful efforts. When you launch v1.00 of whatever, you’ll have steps A,B,C,D for a prospective sign up. Stay away from documenting process C & D when your customers don’t even get past A.

When you have real customers, paying real money you have a limited time to get your product idea off the ground. Don’t change course when you don’t have enough runway left ahead of you because it’s already too late. If you can’t find out what makes your users and customers happy you only have a limited time fame before you fail permanently.

Build, Measure, Learn

Eric Ries preaches about not fooling yourself with hockey stick curves, user sign ups, total users, total downloads or other vanity metrics. You the entrepreneur or business, unless you are running a ponzi scheme have no interest in vanity metrics. Vanity metrics does not provide learning opportunities and at worst, clouds judgment.He replaces it with actionable metrics through innovation accounting.

How can something like accounting be relevant? The key thing is that the measurement of what you are building (hopefully something innovative) is based on reality. Evernote’s paying subscribers account for only 4% of total users. You’d show charts of up-and-to-the-right of your user count to investors, but what you really want to know is why 4%? Diving deeper, within these 4%, 25% of these paying subscribers have used the service for over 4 years. Phil Libin learned that as your service gets more dependable and convenient and harder to live without they get more paying subscribers. That’s like 5%-20% of your time figuring that out. Next 80% on what new features to build, measure and continue to learning.

Pride is stupid. Don’t pad your ego up looking at downloads, users, guests, databases – so what if you’ve got 3 million users when you didn’t know what features would keep them coming back for more, what made them spend X instead of Y. If you don’t know your key business drivers, you’re screwed.

Success guaranteed?

I can’t guarantee success if you performed all of the above but I’ll bet it great increases your chance the business will find its sustainable business model and drivers to thrive in the long run.

For the unfamiliar, SWOT is Strength, Weakness, Opportunity and Threat. When used it’s akin to looking into the mirror and finding where your muscles are, where you’re flabby, where you have cellulite. Your right hand holds pictures of your best looking peers.

A strength is something you can do or have that is not easily replicated, acquired or learned. Strengths are abilities. They help you DO something that others cannot follow or imitate. Muscle size must mean something. If you can punch through 5 inch walls vs competitors who can only punch through 2 inch walls, then that is a strength, an advantage that cannot be imitated or acquired within a reasonably short time. Too many make the mistake by identifying vague strengths and weakenesses and in the process confused themselves about what is a strength vs what is an opportunity.

Examples include:

1. lean cost structures
2. strong brand name
3. experienced and loyal staff
4. wider product range

Opportunities that your organization has has to be evaluated against the barriers to entry by which you competitors are facing. If all have similar access to the same opportunities then there really is not an opportunity at all.

Knowing which is which will help your team in identifying your position relative to your peers and competitors.

For those of you with a daily commute in excess of an hour, what would you give up to save 30 minutes of your time each day? I’m a 15 minute drive away from my office on a GOOD day, but usually take an hour to reach. I can save 45 minutes by waking up and sleeping a little earlier. Or I could just sleep less. But how many times would you actually think of this when you snooze your first alarm?

Workplace productivity can be solved pretty much the same way. Sure it’s convenient to schedule back-to-back meetings and end up with a meeting schedule from 9.00am to 4.00pm. But ask yourself this:

• How many of those meetings I absolutely needed to attend?
• How many of those meetings actually need follow up meetings?
• How many of those meetings actually needed NO follow up meetings?
• How can we cut meeting duration so that all points are discussed concisely and no time is wasted by digressing onto different topics?
• How do you remember key points from meeting one all the way to meeting five or six?

Answering these questions will ultimately help you find the answer for – how do I find time to do and concentrate on any work at all? At one of the startups I worked at we put a “meeting cost calculator” to derive at a cost per meeting. The results?

1. Each meeting had between 12-15 department heads attending
2. Average per hour income was approximate $45 per hour
3. Cost per 3 hour meeting (which was the standard time for a management meeting) = $2,045 per meeting
4. 2 management meetings per month = $4,090 per month
5. Cost of management meetings per year = $49,091 per year
6. No one asked to be excused during any of the management meetings after their segment is completed

This doesn’t even take into account of the opportunity costs associated with attending the full meeting. What about the psychological costs of the meetings? Most managers usually find themselves spent after such a long meeting, their focus destroyed, self-motivation needing replenishment.

Have you tried to put a cost on what meetings are really costing you?

I listened to Phil Libin’s (Evernote) talk at Stanford this morning which served a refreshing tone about entrepreneurship. He concluded in his unique way, that the likeliest source of the end of the world was stupidity and assholes. And he is out on a mission to reduce and discourage that.

Which comes to another reflection point in his talk. He described that many people (CEOs and managers) equate the making of a difficult decision as similar to an unpleasant one. It might not seem obvious but rarely is an unpleasant decision a difficult decision. Yes, you don’t like firing that non-performer, but whether is it an easy or difficult decision to make it’s a no-brainer.

A difficult decision is something like whether to pivot your startup/business to a different model based on the limited information you are able to gather. Subscription-based or pay per use? How would your customers react?

An unpleasant decision is whether to fire that close-friend/co-founder of the team who has become a disruptive influence in the team and decreasing productivity in pursuit of your product development goals.

Never confuse yourself between the two. In my time spent at various startups I have come across many company-defining decisions that perhaps were well worth additional time for us to contemplate. It was usually describable like this:

Difficult decisions have no clear-cut answer and follows a gut-data-gut decision making framework.

1. Use your guts to determine what information is relevant to your burning question.
2. Gather the relevant data in a strict timeline
3. Interpret the data and use the information intuitively to reach a decision

Unpleasant decisions usually have the right answer lying in front of you. You have to make it but you are hesitant about the effects of that decision.

1. Calculate true cost and consequences of making the decision
2. Calculate true cost and consequences of NOT making the decision
3. Decide

In arriving at true cost, it should not be just on the basis of dollar amounts – other resources are equally important. Time, motivation, productivity are also the units that help us achieve product targets deliverable to our customers.Not punishing an asshole who makes life miserable for others could have profound effects that cannot be value in dollars spent alone.

You’re very likely to find that in most cases being able to quantify unpleasant decisions helps convince yourself in making it – hard numbers and logic are needed to separate the emotional values attached to making the decision.

The ability to call on these types of decisions are the reasons why Evernote has developed into such a unique team, creating a unique product and providing customers with a superb value proposition. It having a freemium version does have a part to play in it but the amazing thing is that they can stay afloat and continue enhancing the product despite 95% of their customer base uses the freemium option.

Some people call them customers. Some call them clients. Some friends. Some would refer to them as partners. Some call them guests, others passengers. Some think of them as users, consumers, buyers, shoppers, agents. Some might even identify them as competitors.

For the sake of this article, I’m going to use “customer”. Whether formal or informal, how we refer to them is essentially what we really think of them. It shapes how we view our customers in the context of the value chain. It is the reference point from which we understand how they derive benefits and expend resources in their transactions with us.

So, what’s on the mind of those who loosely call their customers – jokers, assholes, idiots, and God forbid, “xxxkers”?

How do you position your customer?

Are they the butt of your jokes? Do you brainstorm about ideas to take advantage of information asymmetry? How you position your customer determines what kind of work your organization is focused on. As more Gen-Y approach middle to senior management roles, organization values is a key factor in attracting top talent.

The focus of creating a customer is one that capitalizes on human needs: physiological, safety, belonging, esteem and self actualization. The basic human need for food means that demand could outstrip supply depending on location. And the fact that it has to be physically consumed leaves people stranded with bad food at times. Bad food does not become KFC or McDonald’s or Starbucks. They do not open 33,000 restaurants like Subway.

How we consume healthcare is primarily driven by the people who provide it. People die. In many ways, at all ages. Demand for good healthcare is endless! But how do you define a good customer?

A good patient is probably one that does not need to see the doctor! And why does the experience in consuming healthcare one that is typically stressful? Watch ONE episode of House M.D. and you get a rough idea why hospitals are the way they are and the experience painful.

Do you value your customer?

If you valued them:

• your meetings will be 20% revenue, ebitda and net profit, 80% about product development, testing and commissioning, satisfaction and lifetime values, user interface, customer service, customer profiling and how to improve all these things for the customer
• you would want to get out of your building and know your customers. Be friends with them. Call them to your office every now and then. Give them something to be happy about. Create new knowledge and insights about them so you can fill up 80% of your time in the next meeting
• then you would be transparent with them. You save time and cost by not hiding behind the bushes, luring customers into trenches with dumb T&C’s that they cannot read or understand. You do not have to resort to bait advertising. Your understanding of consumer protection laws is to protect your customers from your competitors.
• and you have a big enough long-term vision, you can attract top talent to work for you. You keep them longer. Your customer stays longer. Your shareholders can come and go – but that’s none of your business.

Why it makes sense?

If we didn’t need food anymore, entire industries will collapse overnight. There will still be demand no less, just not for anything that does not add value from the customer’s point of view. And well, no customer, no business.