Keep Up with Your Quants - Harvard Business Review

Very good article about using data to make decisions and communicate results.  

having big data—and even people who can manipulate it successfully—is not enough. Companies need general managers who can partner effectively with “quants” to ensure that their work yields better strategic and tactical decisions.

Often times analysts struggle to communicate their findings in a way the organization understands.  Finding a common ground makes for a great combination. 

We all know how easily “figures lie and liars figure.” Analytics consumers should never pressure their producers with comments like “See if you can find some evidence in the data to support my idea.” Instead, your explicit goal should be to find the truth.

How many times I have heard this in my career?  Quite a few times.  As data consumers, we can't be afraid of being wrong or showing that a decision we have made lost money.  That happens.  Always strive for the truth.  It is much better to improve results then to take a hit to your ego.

The rest of the article is a great read on how to better receive analytics.   Being someone who can take analytics and turn data into money is what separates the men from the boys.    

Creating Baselines

On Monday Apple introduced a brand new iOS, version 7. While it didn't change the basics of the operating system, it created a new starting point. I call this a baseline. The point in which things will be measured against. The standard if you will.

Baselines are very important to measure your business. I always want to come in to an organization, create a new baseline and innovate from that point. Once innovation has slowed and opportunities start to become scarce, a new baseline must be formed to build the next great iterations. Without the foundation, a house cannot be made.

Apple has created their new foundation on which to build upon. Some don't like it, some love it. In time it will be like second nature and we won't be able to remember when the interface wasn't like this. All companies eventually have to create new baselines, even ones as insanely successful as Apple. This should be embraced, because it takes courage to throw away and start new. The alternative is to slowly fade into mediocrity.

Bridge the Gap Between Marketing and IT

...IT organization has been transitioning from the traditional development approach of (1) define functional requirements, then (2) design, then (3) build (the "waterfall" approach) to making quick, small changes to systems ("Agile Scrum").

The waterfall approach kills companies that are not in the software business.  Since internal products are not sold, nor measured by sales, its easier for IT departments to hide behind process.  Process and requirements kill companies.  Companies in this current age need to be faster to market.  

Agile and Scrum have allowed ING to respond quickly to signals from customers. But moving to continuous delivery is a struggle. Some business people who are used to the traditional waterfall method can fall into an unfortunate cycle: taking months to develop requirements, then waiting for IT to respond, then telling IT that's not what they wanted. Now instead at ING they say, "Here's your team. You need to be in every daily or weekly Scrum cycle or sprint to decide if the work is meeting your needs." It demands more time from the business people, but they are engaged and own it.

The Agile method is so much more effective to engage the business.  The business moves at the speed of sound compared to IT and if the IT department gets buried into process, the business loses faith in IT and finds another way.  This doesn't make sense for the business, but it happens to get things done. 

While Scrum has been employed primarily in software development, ING shows that it has broader management applications. They have used Agile Scrum as a key tool for collaboration across functions in processes such as developing new products and in marketing campaigns. And the frequent (daily or weekly) meetings accelerate decision-making.

This is very interesting and I have never thought about all decision making changing to an Agile Scrum.  In my business, I deploy an "unofficial" Agile Scrum, just have never thought about it from that point of view.  I believe it works so much better, to be engaged daily in your business and with your team.   

 

Redesigning the Look of iOS Is Jony Ive's First Step Towards CEO

I don't believe that Jony Ive is being groomed for the CEO role.  In my opinion, what Tim Cook is doing is defining his #2.  I have believed for some time that your #2 should be your opposite.  Jony Ive is a true product guy, an innovator.  Tim Cook is an operations guy, a brilliant logistical tactician.     

When your #2 is your opposite, it allows you to focus on what you are passionate about, your expertise.  Let your #2 focus on the things you don't have passion for.  A trusted #2 that is your opposite will make your team more effective because the team gets the best of you. 

How to Keep Your Customers by Thinking Ahead of Them

...more important to deepen your connection to your existing customers than to spend a lot of time and money trying to figure out why certain customers left.

That’s not to say that you shouldn’t care about losing customers. Customer attrition and churn can kill your bottom line. But once customers are gone, they’re gone. The best way to hang on to them is with a process I call “closing the backdoor.”

Great points in this article.  So many people focus on bringing a customer back, instead of focusing on keeping the customers you have.  The most profits to be made is by increasing the frequency of your current customers.  By striving to satisfy and get out in front of your current customers needs, you will have more current customers (because new customers will outnumber your churned) and they will be more frequent purchasers.

​

There are many lifecycle charts, this one is more transactional with each purchase.  For instance, in selling hotel rooms we have a much better shot at getting a guest to return if they are ready to return.  Any communication preceding that will usually be met with indifference.  It won't hurt the cause, but you likely won't get a booking either.  If you can send, i know this is going to be cliche, the right offer at the right time, you will increase frequency and redemption percentages.  ​

How to Calculate the Value of a Like

I like this article.  It attempts to measure the value of a Like with hard analytics.  While not the only thing you should look at, it is something to add to the other measurements of Facebook and Twitter.  ​

Manage Data with Organizational Structure

Article on who should manage data...​

most people management is actually done in the course of day-in, day-out work, by managers and employees. HR may very well define the semiannual performance review process, provide the needed forms, and make sure it is carried out. But performance assessment is completed by employees and managers.

This last point strikes at the heart of the federated model. Corporate HR sets policy; department HR may modify it in accordance with specific needs; and departments, managers, and employees carry out these policies. Most have a certain degree of latitude in how they do so.

 I am a big proponent of moving data management out of IT.  The HR model is exactly the model that works.  The business is closer to the data and very few IT department can handle the pace of the business when it comes to data management.  IT designs the network, builds the hardware and manages updates, while the business manages the ETL, data model and governance of the data.  

Compromising When Compromise Is Hard

Respect also allows good people to disagree — sometimes vigorously — without animosity. You may be heated in your argument, but you are not irritated with the other person. This is liberating. You can both channel your passion for the work into something constructive. Far from "abandoning your principles," you're both proceeding from a place of deepest conviction.

 A decent article about compromising.  I don't like the word myself.  I think too many times organizations embrace compromise which ends up being the worst of both worlds.  

The quote above is what I believe great organizations do.  Once the organization trusts each other, vigorous debates, on the verge of argument, creates greatness.  Too often compromise is both sides giving up their principles until they meet in the middle.  That doesn't lead to greatness.  Greatness happens when two sides incorporate the best parts of their ideas to crete something that is far superior than meeting in the middle.  The best products I have been involved in have came from trusted partners "going at it" until we came out with something great.  

The Six Enemies of Greatness (and Happiness)

1) Availability

2) Ignorance

3) Committees

4) Comfort

5) Momentum

6) Passivity

​Since reading "Good to Great" I see so clearly why most companies never get to great.  Good is definitely the enemy of great and these are six good examples of that.  Click through to the article to read a short definition. 

I believe 3 and 4 are the key ones I have seen.  The more people are successful, they tend to not want to push the envelope because they are "punished" if things don't work.  Committees tend to make things harder to accomplish greatness, because there is always too much compromise.  Small groups of people make greatness.

Marketers, Go Back to Basics

"There's so much that's sexy in social media and in mobile right now," he said. "Anyone who's bought a smartphone in the last 18 months is doing some things they hadn't imagined yet." When they read about a big company launching a cutting-edge initiative, they want in — but the economics usually only make sense for large companies that have experimental budgets. Instead, he says it often pays to focus on bread-and-butter marketing (like direct mail) or even on technical innovations of the past few years that are effective, but less novel (like mobile websites).

In the gaming industry, direct mail is still king.  In fact, it's not really close with a response rate of over 4X then email alone.  Yet, many marketers get caught up in the sexy new marketing trends.  Social gets more attention than direct marketing, even though direct marketing brings much more profit.  Likes are revered, yet direct mail is boring and so yesterday.  Sometimes whats worked in the past is what will work in the future.  

Best Time To Send Email

Interesting article on times to send emails.  The research included 21 million different emails and the findings are similar to what I have seen in my career.​

One of the most important conclusions is that sending newsletters during readers’ top engagement times of 8 a.m. – 10 a.m. and 3 p.m. – 4 p.m. can increase their average open rates and CTR by 6%.

However, optimizing email timing takes more than awareness of top engagement times. As our research points out, it’s a combination of many factors, including knowledge of time zone differences, your subscribers’ daily routines and the practices of other marketers. Find out more for yourself:

Remember to test on your own data.  I have seen different optimal open rate times between properties in the gaming industry, so test many different times and days and determine what the optimal time for your organization.

Emails have the best results within the 1st hour after delivery. This is when 23.63% of all emails are opened. But 24 hours after delivery, the average open rate is close to zero.

Almost 40% of all messages are sent between 6 a.m. and noon. This can result in inbox clutter, and significantly decrease results for these emails.

Messages sent in the early afternoon have a better chance of being noticed and consequently achieve better results: up to 10.61% open ratio and up to 2.38% CTR.

Subscribers’ top engagement times are 8 a.m. – 10 a.m. and 3 p.m.- 4 p.m. with up to 6.8% average open rates and CTR.

​I like the afternoon hours.  It has a high engagement rate and most emails are sent in the morning hours.  The more you can stand out, without being too late to be stale, the better success your email campaigns will have.  

Remember, once an email sits for 24 hours, there is hardly any chance you will get a conversion.  ​

Will Data Science Become the New Bottleneck? - Forbes

many have posited that recalcitrant IT departments, hidebound by a history of rigid organization, have been a bottleneck to the adoption of new technologies and, by extension, the ability to distill business value from data.

We’ve also examined the potential and difficulties of analyzing big data, arguing that a new class of analyst, the data scientist, is on the rise in many organizations.

That may be part of the problem, rather than the solution.

I think this will be a major problem as big data moves into the mainstream.  So many organizations struggle with IT getting data that is readily available in the organization, wait until 20 groups are pinging 2 data scientists, who by nature are slow and go down unnecessary rabbit holes to find the truth.   

In reality, most businesses don't need all this data.  They need to perfect using their current data to drive actionable results.  Until they do that, there is no need to bring big data into the organization.  ​

The Four Basic Forms of Customer Loyalty →

Great article about the types of loyalty you can achieve as a business.  It really shows there is only one form of loyalty, because the other forms are not lasting and don't represent a sustainable business.​

Purchased Loyalty

The best example of purchased loyalty is a customer rewards program. Other examples include memberships, coupons, and rebates.

Basically, purchased loyalty pays customers to be loyal, and there is nothing wrong with that practice. In many industries and market sectors the purchased loyalty strategy works extremely well.

The main problem with it is that purchased loyalty can be easily stolen because the customer is loyal to the program, not the company.

Purchased loyalty is a portion of the loyalty program, but can't be the basis for the business.  Someone can always come over the top and create a richer loyalty program and forces you to squeeze your margins even more to compete.​

Convenience Loyalty

The local market, the corner dry cleaner, the coffee shop on your way to work. You might be loyal to those businesses simply because they're convenient. You're likely to remain loyal unless competitors come along who are equally or even more convenient.

Location, location, location.  This loyalty is a great advantage as a business, but doesn't mean the guest will be truly loyal because of it.  When you have a convenience advantage, it takes a lot more for a customer to defect, but don't give your guest a reason and this advantage can be sustained for a long period of time. ​

Restricted Loyalty

Restricted loyalty exists when there is no other game in town. Your cable company may enjoy restricted loyalty, especially if you live in a rural setting and there is no competition. (Although it is easy to argue that other options do exist, like online services.)

Utilities tend to enjoy restricted loyalty. Most cities do not have multiple electricity providers.

Monopoly's are a wonderful thing if you find yourself in one.  They make life very easy as a business.  However, they rarely last for any period

of time because once someone else sees they can steal your market share, they will.​

Also, businesses tend to get lazy when they have a monopoly.  They don't take care of the customer and deploy strategies that are more bottom line ​driven, instead of customer focused.

True Loyalty

True loyalty is earned loyalty. True loyalty is undying allegiance to a brand or product based on an incredible level of satisfaction.

Customer satisfaction breeds true loyalty. When you are highly satisfied, when your needs are completely met and your expectations are consistently met and even exceeded, you simply cannot imagine using another product or service.

True loyalty is the holy grail of customer satisfaction and is something every business should aspire to create.

If you take care of your customer and provide a high level of satisfaction, you can overcome any of the other loyalty forms.  Customers will travel and accept less from you than your competitors if they truly feel cared for.  Always strive to build an organization around true loyalty, it's the only form of loyalty that is sustainable.​

Google, destroyer of ecosystems

The truth is this: Google destroyed the RSS feed reader ecosystem with a subsidized product, stifling its competitors and killing innovation. It then neglected Google Reader itself for years, after it had effectively become the only player. Today it does further damage by buggering up the already beleaguered links between publishers and readers. It would have been better for the Internet if Reader had never been at all.

I think the conversation here is what free does to ecosystems.  When businesses as big as google offer free services, they are killing the value of said services.  When the value of a service is perceived to be 0, it effectively puts everyone out of business who has to make money from a similar service.  Then, because a big company is making no money from the service and every company eventually starts looking for ways to improve bottom-line, they cut the service because it is nothing but a cost.​

I think we see this with the tablet market, even though tablets are being sold and not given away for free, they are being sold at a loss to gain market share.  Eventually that devalues the market for tablets and nobody wins.  The tablet makers who have the market share eventually get tired of selling at a loss and stop innovating and the tablet makers making money will get out of the business because they can't compete.  Of course Apple is more than likely the anomaly in this situation.​

Content providers on the internet already went through this.  They have now seen giving content away for free has devalued the content and trying to charge after the fact remains difficult to say the least.  ​

In my humble opinion I would like to see businesses compete on innovation instead of price (or lack of price).  In this case, everyone wins.  The best services, products and content survive and the companies that are producing them will be around for a long time because they are making profits.  Everybody wins.  Good for the customer, good for the business.

Amazon's Jeff Bezos: The ultimate disrupter - Fortune Management

He's a pro-customer, tightfisted risk-taker who is conditioning Wall Street to embrace his erratic earnings. If you're running a business with high margins -- watch out.

I am fascinated with Jeff Bezos and Amazon.  Years ago I became obsessed with Steve Jobs and Apple and the differences between the two companies are drastic.  People compare Jeff and Steve all the time, but there isn't much in common from their philosophies.  

The first thing that fascinates me about Amazon is when are they going to start making money?  Sure they bring in a large amount of revenue, but they really don't bring anything to the bottom line.  Can they ever?  If they make moves to make more bottom line will they lose their extremely price sensitive customers?  It will be interesting to watch.

I also don't know if this low margin business model is actually good for the consumer in the long run.  Sure, it's always nice to pay next to nothing for any items, but there are always consequences.  Innovation will lessen if a competitor can come in later and make no money and steal all the marketshare.  Also, for companies that sell to Amazon, if price is always driven down and margins are always squeezed, the products become worse over time.  Companies need to make money and margins are a good thing as it allows for better innovation in the product and higher R&D budgets.  If the margins are so low, the only innovation becomes cost-cutting and that is not good for anyone, especially the consumer.

Again, it will be interesting to watch.  

Is Siri really Apple’s future? « counternotions

Siri is a promise. A promise of a new computing environment, enormously empowering to the ordinary user, a new paradigm in our evolving relationship with machines. Siri could change Apple’s fortunes like iTunes and App Store…or end up being like the useful-but-inessential FaceTime or the essential-but-difficult Maps or the desirable-but-dead Ping.

An article making the rounds.  Very interesting take on what Siri can become, sounds pretty awesome. 

FiveThirtyEight's Nate Silver Explains Why We Suck At Predictions (And How To Improve) | Fast Company

When human judgment and big data intersect there are some funny things that happen. On the one hand, we get access to more and more information that ought to help us make better decisions. On the other hand, the more information you have, the more selective you can be in which information you pick out to tell the narrative that might not be the true or accurate, or the one that helps your business, but the one that makes you feel good or that your friends agree with.

This is a great article on using data and predictions.  I just bought this book as a good friend of mine suggested it is a great read.  I always hear "You can make numbers tell whatever story you want."  Ain't that the truth?  So many times colleagues of mine hold on to a certain part of the data that tells the story they want to tell and soon it becomes truth, however this only helps them look good instead of moving the business forward.  

Innovation Is About Arguing, Not Brainstorming. Here's How To Argue Productively | Co.Design: business + innovation + design

Turns out that brainstorming--that go-to approach to generating new ideas since the 1940s--isn’t the golden ticket to innovation after all. Both Jonah Lehrer, in a recent article in The New Yorker, and Susan Cain, in her new book Quiet, have asserted as much. Science shows that brainstorms can activate a neurological fear of rejection and that groups are not necessarily more creative than individuals. Brainstorming can actually be detrimental to good ideas.

What?  What's that you say?  I have always thought this.  The best innovation n my career has been with small teams that trust each other and can argue.  Arguing has such a negative connotation, but arguing without personal feelings makes for great innovation.  People always talk about consensus and meeting in the middle, however that is the opposite of innovating.  When arguing goes right, the result is like a pyramid shape.  Instead of meeting in the middle, the middle is raised and something better comes from the debate.

But the idea behind brainstorming is right. To innovate, we need environments that support imaginative thinking, where we can go through many crazy, tangential, and even bad ideas to come up with good ones. We need to work both collaboratively and individually. We also need a healthy amount of heated discussion, even arguing. We need places where someone can throw out a thought, have it critiqued, and not feel so judged that they become defensive and shut down. Yet this creative process is not necessarily supported by the traditional tenets of brainstorming: group collaboration, all ideas held equal, nothing judged.

All ideas are not equal.  I have a colleague that throws out ideas all the time, some good, mostly bad.  But the good ones change the organization and if she would feel bad when the answer is no, I wouldn't be as successful as I am.  Surround yourself with people who can take it when the answer is no.

The Presentation Mistake You Don't Know You're Making - Heidi Grant Halvorson - Harvard Business Review

More is actually not better, if what you are adding is of lesser quality than the rest of your offerings. Highly favorable or positive things are diminished or diluted in the eye of the beholder when they are presented in the company of only moderately favorable or positive things.

This is an intriguing article on add-ons.  It is based on an interview, but there are interesting tidbits later in the article on consumer behavior.

Psychologists Kimberlee Weaver, Stephen Garcia, and Norbert Schwarz recently illustrated the Presenter's Paradox in an elegant series of studies. For example, they showed that when buyers were presented with an iPod Touch package that contained either an iPod, cover, and one free song download, or just an iPod and cover, they were willing to pay an average of $177 for the package with the download, and $242 for the one without the download. So the addition of the low-value free song download brought down the perceived value of the package by a whopping $65! Perhaps most troubling, when a second set of participants were asked to play the role of marketer and choose which of the two packages they thought would be more attractive to buyers, 92% of them chose the package with the free download.

As marketers we tend to find more and more to throw in, we call them soft or no-cost add-ons.  This is intriguing to see that may be negatively impacting the offer.  I guess when I look at it as the consumer, the more stuff there is doesn't necessarily make it worth more in my eyes.  Something to test for sure.

Seth's Blog: Waiting for all the facts

All the facts are never in.  

The real question isn't whether you have all the facts. The real question is, "do I know enough to make a useful decision?" (and no decision is still a decision).

Seth is brilliant.  There is a quote by Colin Powell

Use the formula P=40 to 70, in which P stands for the probably of success and the numbers indicate the percentage of information acquired."  Part II: "Once the information is in the 40 to 70 range, go with your gut."

You never have all the facts and there is not amount of data that will lead to 100% certainty of making the right choices.  If you wait for 100% of the facts, you waited to long.