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On a trip away from Lake Wobegon, Garrison Keillor took time to talk to us at tompeters.com. He and Erik had a great conversation about his latest book, A Christmas Blizzard, and many other topics, including a note from Julie Christie. We know you'll enjoy reading his Cool Friends interview. View our Archives for past interviews.

Comments

Steve,

Great post and there are many intangibles that can't be measured in transactions from a marketing standpoint. While important to measure all kinds of activities, I still get pissed at most retailers that send out coupons and don't notify store personnel. Then I go to use the coupon and the cashier can't find a code or the correct code, managers must become involved, and many times they ring the transaction under a miscellaneous category. What gets lost in translation????

Exactly what you've described...what can't be measured through my purchase; not to forget, what's being measured isn't right in the first place because the front lines are uninformed or misinformed. Kinda strange how marketing will spend millions to drive foot traffic, yet, the people responsible for ringing the transactions have never seen the mailer to begin with...I happen to question what's being measured in the first place.

Thx...

Posted by Joker at September 25, 2009 10:07 AM

Thank you - Thank you - Thank you... several of us at my company had an idea which we called Keeping On Track: Open Line which is the next generation webconference. Our motive was to offer a resource to our clients which offered an interactive forum with top speakers which they can ask questions and learn from during our current economic times. We made an investment in developing the software and put many hours into each program - the feedback has been amazing! Yet, I am often asked for the ROI... my response is - it has been the right think to do and it felt like the right think to do... still more questions - how much have you made off it - are you crazy.... yours is the first article that supports why we did what we did and I want to thank you so much... when it is right that is the direction one needs to take - no questions should be asked about ROI... it is just the right thing to do.... by the way... the outcome has resulted in new business but to me that is simply the biproduct of "doing the right thing" :)

Posted by Dana Borowka, CEO Lighthouse Consulting Services, LLC at September 25, 2009 10:13 AM

I understand that the Japanese are working on emotion recognition software that can monitor employees smiles with cctv.......

Talk about taking the soul out of the business!

I have no idea if it can tell the difference between a sincere smile and a fake one. I do know what can tell the difference - and that is the human being he/she is talking to.

Posted by PaulH at September 25, 2009 11:42 AM

Hear, hear!

As Einstein said, "Not everything that counts can be counted, and not everything that can be counted counts."

Posted by Steven Levy at September 25, 2009 1:23 PM

And as Shakespeare said in MacBeth...

"Fair is foul and foul is fair"

Welcome to the new biz 101

Posted by Joker at September 25, 2009 5:47 PM

Steve - an excellent post. In my career in healthcare this topic has always been one of my greatest battles with managers who just don’t get this stuff. For 40 years I’ve worked alongside thousands of front line employees who provide healthcare to patients. Whilst healthcare accountants and out of touch managers push us to measure everything, the patients know that when they are REALLY cared for this cannot be measured. A smile; a hug; the right word at the right moment are just some of those immeasurable skills that out of touch pen-pushing, office based jobsworths will never understand. The quality of patient care is NOT about numbers and measurement – it’s about love, care, empathy and compassion. End of story.

Posted by Trevor Gay at September 25, 2009 6:13 PM

I am continually amazed at the number of people working in stores (of all sorts) that don't smile, don't make eye contact, and don't engage the customer in any way that might suggest the customer is valuable to the business and therefore to the keeping of their job. It's obvious that management hired someone with a pulse and made no effort to train them.

Now, I realize that working with the public is probably no great joy on a daily basis, but I would appreciate some basic acknowledgement for frequenting their establishment, or I will go elsewhere.

Posted by Perspective at September 25, 2009 10:20 PM

Perspective...

The front line employees are merely mirroring their treatment by upper level leadership and company. There are companies that treat employees well, many of them private and small, that treat customers very well too. There is a boutique store in Colorado Springs (Music Exchange) that sells guitars and other musical equipment. Locally owned and worked by experienced musicians, they are wonderful to work with on just about everything. I buy much of my equipment there, because employees continue to work there and have for decades in some cases. It's nice when employees hang on long enough to know you by name...

There are many great resources on-line too, and that way you don't have to talk to anybody...which is sometimes my preference :)

Posted by Joker at September 25, 2009 10:49 PM

Quote: "There is no way to measure the impact of a smile, ..."
Plenty of ways that hit the bottom line. For instance, a smiling waiter gets bigger tips than a neutral waiter. Smiling doctors have less malpractice suits. Even unseen smiles help the bottom line. Telemarketers know that a telephoned sales-pitch from a smiling person sells better than from a neutral sales person.

Posted by Mike L. at September 25, 2009 11:05 PM

This is perfect:

As Einstein said, "Not everything that counts can be counted, and not everything that can be counted counts."

That must have been in the gazillion page Isaacson biography of Einstein ... how did I miss it? Thanks.

Posted by Steve Yastrow at September 26, 2009 12:04 AM

I added a few more angles to this idea on my blog:

http://yastrow.com/2009/measurement-follies/

Posted by Steve Yastrow at September 26, 2009 12:26 AM

Steve, you can certainly measure the effect of the receptionist's smile; just not necessarily in conventional 1-2-3 quantitative ways. If the company decides on a number of key (brand) attributes it wishes to be associated with for customer loyalty reasons - Courteous, Professional, Values my business, for example - then some relative simple feedback mechanisms can establish whether and how the reception experience is contributing to those in the minds of visitors. And if the boss needs further reassurance, you could map those same attributes against the reasons ex-customers give for going elsewhere.

PR companies have been doing something similar for a while. They have moved away from the early "column inches" or "advertising equivalent" methods of trying to quantify their work to clients, and are focussing on whether key words or phrases appear in the media that match the client's desired positioning. Ie they've shifted the measurement game from "how much" to "how good".

What's more, most of these "little" things cost no more to do right than do badly. So I would argue, don't try to persuade the boss by adding yet more measures (and possibly greater paralysis by analysis). Too much Right Brain/Left Brain disconnect. Instead, get her/him to agree that if it doesn't harm the business in terms of R or I then you can try it your way.

Posted by RobCH at September 26, 2009 3:21 AM

Great post Steve. I am reminded of the Macnamarra fallacy as quoted in "The Empty Raincoat" by Charles Handy:

The first step is to measure whatever can be measured easily. This is OK as far as it goes.

The second step is to disregard that which can’t easily be measured or to give it an arbitrary quantitative value. This is artificial and misleading.

The third step is to presume that what can’t be measured easily really isn’t important. This is blindness.

The fourth step is to say that what can’t easily be measured really doesn’t exist. This is suicide.

Peter

Posted by Peter Cook at September 26, 2009 3:49 AM

great post! Congrats on steve and thx tom to have him as guest poster.

I have to admit I love your speeches but I dont really really like your blog... you said once in an interview that seth godin does it much better... and you are right, seth is one of the best bloggers in the web BUT, blogging better is NOT difficult. I just would like to encourage you and your team to read some blogging ebook (I recomend the one from problogger, specially the chapter on how to write and structure a post). You guys have great knowlede, the problem is that reading long posts with no structural and visual support (paragraphs, pics, bullet points, subtitles etc) can be annoying.

I hope I was able to give some constructive feedback.

Guilherme

Posted by Guilherme Nunes at September 26, 2009 4:00 AM

Guilherme - It is always good to get constructive feedback. I have always found Tom and his team receptive to such feedback.

I’ve written my own Blog for almost 5 years now and I’ve also been a regular reader and commenter on Tom's Blog for roughly the same time.

My take is that the beauty of any Blog is in the eye of the beholder – i.e. the reader

A Blog to me develops its own ‘personality’ over time and I agree 100% with your sentiments about Seth - he is special indeed in many ways – not least Blogging.

I don't visit a Blog because it looks good. As a reader I see a Blog as a way of getting to know the Blog owner. In Tom's case it’s the content that makes me re-visit. It’s also great to have different members of Tom’s team giving their own postings.

We all have our own preferences of what makes a good Blog of course and that’s great too. For me as a reader the ‘relationship’ with a Blog develops over time – it’s often not not love at first sight. You have to get beyond the 'image.'

As a Blog 'owner' I would much rather grow my Blog pragmatically and organically in response to reader’s feedback than take off the shelf a template written by an alleged ‘expert.’ Again speaking just for me the joy of the Blogs I read is their quirkiness, individuality and most of all their sense of community.

I have this nightmare scenario of ALL Blogs looking slick, glitzy and perfectly formed ... How boring that would be? Where would the personality and individuality be in that?

Hope this comment makes sense Guilherme :-)

Posted by Trevor Gay at September 26, 2009 6:02 AM

guilherme, thanks for your comments.

Posted by erik at September 26, 2009 10:54 AM

There are many reasons someone would say "no" to a project because they can't directly measure its results. Is intellectual laziness ever one of the reasons?

Thinking is hard. Saying yes is harder than saying no. Not being able to measure something can be an excuse not to think.

Posted by Steve Yastrow at September 26, 2009 5:30 PM

Almost everything that is being said here cuts both ways. Saying yes to something can also be an excuse to not think (the morgage crisis comes to mind). The bias of most people who share their opinions on this blog leans more to making descions based on intution. Any bias - a bias to measure everything or a bias to rely on intution - can be a problem. Its more fun to discuss intution because it involves more emotion - but this too can be a problem.

Posted by Zorro at September 26, 2009 7:06 PM

"I am continually amazed at the number of people working in stores (of all sorts) that don't smile, don't make eye contact, and don't engage the customer in any way that might suggest the customer is valuable to the business and therefore to the keeping of their job."

Perspective - where do you live?
Because I've never been there.

Posted by zorro at September 26, 2009 7:23 PM

" I am reminded of the Macnamarra fallacy as quoted in "The Empty Raincoat"

OK, fast foward to Donald Rumsfeld who in many ways was the anti-Macnamara.
He also blew it big time.

Posted by zorro at September 26, 2009 7:30 PM

'Hear, hear!

As Einstein said, "Not everything that counts can be counted, and not everything that can be counted counts."'

What makes this quote powerful is the fact that Einstein said it. Why is is he famous? He is famous because he knew when numbers do count.
Its not one thing over the other, it's knowing and understanding what the right mix is.

Posted by zorro at September 26, 2009 7:52 PM

Excellent post, Steve. Thank you. I especially appreciate the bullet points as they infuse reflection and response.

In thinking about the complexity of the world, say from a mere physical standpoint, just because we can't see what holds the planets in space does not mean that there is not a complex system that allows such. Obviously, there is the continuous discovery of such, i.e., the ever expanding universe.

The same is true for business. Just because we cannot see direct links does not mean that they are non-existent. We love measurements that we can see because we think that we can then order our lives and businesses by them.

Our reliance on economists and mathematicians and their use of formulas has at times been detrimental.

It seems to me that there also needs to be basic common sense and cordial manners regarding the kind of measurement spoken of here. I also tend to think that a man would be more likely to make such a statement than a woman.

Women tend to recognize intangibles more readily and measure them through emotional intelligence. Whereas I can pick up a situation in two seconds flat, many times I have to spell out the intangibles to my beloved partner. Bless his heart. :-)

Posted by Judith Ellis at September 26, 2009 7:57 PM

Great post. I recommend reading "How to Measure Anything: How to Find the Value of Intangibles in Business" by Douglas Hubbard. He makes the crucial point that to measure something is to come away with a better understanding of it, which does not mean you necessarily must have an n-decimal point precision number. E.g. "y is greater than x" might be sufficient to make a decision, provided y is a key factor and the difference fits your confidence level. Too often things that are instrumental to insight and decision don't get measured when they still could (and should) be because of this kind of misunderstanding, while resources are frittered away on immaterial things that happen to lend themselves to precision. The resulting decision is then misguided in multiple ways.

Posted by Mark at September 26, 2009 10:21 PM

Thanks, Mark, for the book recommendation. I shall check it out for sure. I love your comment.

Posted by Judith Ellis at September 27, 2009 10:54 AM

Some great points - reminds me of the story of a drunk looking for his keys under a lampost - not because that is where he dropped them - it's just easier to see with the light.

I work in the field of Business Intelligence (BI software helps companies report and mine their data)in Customer Service so I am right at the heart of Metrics production and delivery and their use.

BI has become more mainstream in the past few years (greater access by more poeple in an org). we are getting to point where it's really moving out of the realm of specialist report writers. now even CEOs can create their reports.

This frightens the c**P out of me for two reasons

1) The average CEO does not understand his data. Trust me - I have done consultancy work in companies where different divisions operated a different number of months in the financial year! An amateur gets lost in the definition of the data. Facts on a page in numbers assume a greater impact than words - numbers look accurate.

2) if the person in charge gets hold of the data they start wanting to use it and do silly things like running the company! I am sure that Trevor would be the first to back me in saying that should be left to the frontliners.

Ok so I make light of it but it is a real issue. In the military the amount of real time info has reached the point where the general can actually direct operations personally. I understand more enlightened armies are looking at this issue and the problems of higher exec involvement vs the man on the ground.

What this means is that the ability of the technology to deliver information far outstrips our change in leadership thinking to deal with it. There is a great deal of noise about twitter and how orgs should use this technology - there is virtually no debate in business circles about the management impact of massive qtys of information.

Although not really available to businesses quite yet check out the Allosphere for how we could be viewing info very soon.

Posted by PaulH at September 27, 2009 11:01 AM

Paul – I heard something similar one time:

“Statistics are used by managers like a drunk uses a lamp post – more for support than illumination.”

Give front liners the information and immediately reduce management costs by at least 90% - that’s probably an under-estimate. Poor managers hold on grimly to information to simply justify why they are there.

The best way to gain power is to let go of power. The best leaders have always known that. Too many managers are frightened of the impact of letting go of information. The reality is that front liners now have access to as much as the manager which means managers now have to justify why they are paid more instead of hiding behind the possession of information.

It’s no longer a manager’s prerogative to retain information.

Posted by Trevor Gay at September 27, 2009 4:08 PM

Maybe these metrics could make a difference...

1. Determine what you expect your mid level/frontline managers to do regarding coaching and developing their teams and measure it. If they aren't performing, FIRE THEM! They are costing you a great deal of money and your reputation

1. Determine what your front line folks need in terms of time, training, and other resources needed to meet the performance expectations you have established for them and measure your effectiveness in providing these things to them. If your managers aren't meeting these needs...fire them. They are costing you a great deal of money and your reputation

1. Determine how many customers whose business you subsidize through your antiquated "the customer is always right" mindset and fire 100 percent of them (think serial callers trying to change a "no" to a "yes"). They are costing you a great deal of money and your reputation

1. Determine a realistic metric for employee churn and reduce it by 75 percent. Measure this number. Link meeting this metric to the payout your managers receive in their annual bonus/compensation. They notice the marked increase you see in internal and external customer satisfaction...

"Soft is hard" I've heard. But it damn sure ain't impossible!

Posted by Dave Wheeler at September 27, 2009 6:39 PM

Suggestion: replace the sort of thinking that allows people to say, "Just because this guy can’t see a return on investment doesn’t mean one doesn’t exist." Instead, picking up Dave's theme, employ the sort of people who think, "If this guy can’t see a return on investment when I start to talk to him, it's my job to make him see it."

Posted by Mark JF at September 28, 2009 3:34 AM

Dave

You are absolutely right - I work in a reasonably enlightened department. We measure CSAT and some other "tactical" measures but we also measure unplanned attrition - especially to outside the company. People moving to new roles internally is a good thing!

Actually people moving outside the company is sometimes good too. Having well trained, experienced people in your "ecosystem" can be a very powerful force. it's worth thinking in terms of good churn and bad churn. It's not always obvious which is which - which I guess the point of this blog

Posted by PaulH at September 28, 2009 4:48 AM

Marketing and War for instance...

Let's take Colin Powell's moving speech at the UN regarding weapons of mass deception/destruction. He held up a vial, made his case that we will find WMD in Iraq, and misled the Council with stuff that was "going" to be measured, that we'd apparently measured already...even though we couldn't find the stuff we measured. Hmmmm. We never found 'em and all of the WMD was apparently moved to Syria overnight, even though our CIA/FBI can find secret facilities in Iran and surprise the Security Council.

Then Powell turns support on his own party and moves to the other side (he should have been a banker or broker). Was it Powell or James Earl that did the voice over for Darth Vader, "You don't know the power of the dark side...I mean measuring." I agree that bias will inject itself into measured results as well. We clearly started a war over such bias and put our own people in harms way.

Do people want proof (measuring) for the facts or the storyline for support? Trev, I like the analogy.

Posted by The Joker at September 28, 2009 8:44 AM

Zorro – Your comment above about Einstein is great and the conclusion excellent: "It’s not one thing over the other; it’s knowing and understanding what the right mix is." This is quite thoughtful indeed. I would also add that it's not only knowing and understanding the mix but when and how it should be implemented or altered. It is the when and how that matters most after the what. For example, even if we know what needs to change, why a system is not working, the system sometimes needs time to alter. To change abruptly might be more detrimental. Of course a swift and decided change for others may be best. Tom’s insistence on small changes to affect systems readily comes to mind.

Many times the trouble lies within this decision-making process and in the meantime motion declines and talent stagnates. Leaders obsess about what needs to happen without ideas-I know this up-close within one of the Big Three- and workers muddle through the same old same old aimlessly waiting for the shoe to drop. But if we are not forever vigilant and thoughtful on a wide range of issues associated with the system itself and cognizant of the skill of the workers the when and how, or the lack of it, can be more destructive than helpful. Tom's insistence on prototypes matters here.

This seems to be a gripping fear of leadership and hence stagnation among workers: not knowing when and how after identifying what the problem is. So, even if the numbers identify the problem it is largely the intangibles that greatly contributed to it and will bring us out of it. Leaders need more than numbers to lead effectively and workers need guidance and encouragement to do what many already know what is right to do. In the plants in Detroit the workers were screaming design and miles per gallon; many of them did not even buy the cars they were making then, even with workers' discounts and rebates.

For me, the essence of Steve's post centers on good judgment. If we are fixated on numbers alone all other necessary factors are lessened. If we are thinking human beings in the world this will better guide us, for we will then be lead by the whole of who, which includes love--the greatest gift, and not merely by numbers alone. The beautiful thing is that love, the mix of passion, excellence, determination and deference, transforms--even numbers.

The mix that Zorro referenced then becomes the judgment that Steve addresses within the bounds of love. By this I mean that without passion, excellence, determination and deference, there will remain bad judgment on the how and when of systemic change--even what needs changing, both relationally and numerically. It is also not that love guarantees no failure, but it does enable a quicker more resilient comeback. I might also add that love is dynamic in expression, design and purpose.

Posted by Judith Ellis at September 28, 2009 10:48 AM

Zorro, you asked Perspective:
Perspective - where do you live?
Because I've never been there.
I live in Puerto Rico and I can tell you it happens all the time. It's heartbreaking: people in "service" positions barely articulate a "Buenos días", let alone smile (very few exceptions apply). And I don't know how, cause people here are very WARM (I'm from Spain, so I've noticed).
Well, maybe I do: daddy-State, who gives you coupons indefinitely for doing nothing has to do a lot.
Anyhow, I have my own recipe: hire front line employees based on THEIR view of what a good service is (provided they comply with YOUR minimum)and their commitment to doing it. Make them accountable and reward them based on their doing what they say they'd do. I'm sure we'd be surprised at the results.

Thanks Steve for all your insights!
bit.ly/LYhDB (this is my idea, it's in Spanish)

Posted by Joaquin at September 28, 2009 1:29 PM

You can blame Pythagoras of Samos for starting this debate a few years back when he argued that everything can be measured. He didn't smile a lot.

Posted by John O'Leary at September 28, 2009 1:51 PM

"Anyhow, I have my own recipe: hire front line employees based on THEIR view of what a good service is (provided they comply with YOUR minimum)and their commitment to doing it. Make them accountable and reward them based on their doing what they say they'd do. I'm sure we'd be surprised at the results."

And the beat goes on. How long will it take for these frontline employees to become like those they have replaced? I guess senior executives too were hungry for rewards at some point. You know the saying the higher you rise on the corporate ladder the less work required. There has to be something a bit more than rewards necessary, although I believe in them. (Bankers do too--sigh!) But rewards in and of themselves do not address the core changes that are needed.

Attaining rewards can be merely perfunctory even though the numbers are favorable short-term.

Fundamentally, what matters are cultural and ethical changes in the long run, inside the corporation and outside. This sets a universal standard. We have broken down many ethical laws in the handling of our business inside and outside of corporations and ask why doesn't the salesperson smile or why some executives aren't jailed. "Smile, you're on Candid Camera."

I appreciate the accountability addressed in Joaquin's comment.

Posted by Judith Ellis at September 28, 2009 2:12 PM

In some ways, this blog is all rearview mirror thinking. It is overly focused on 'front line employees" and "service". We need to retool our economy. We need to make focus on making things, not selling things. Here's a column by Thomas Freidman where he discusses how the Chinese are begining to pass us in green energy (something we invented)
And when it comes to making things, numbers that measure quality control (making perfect ball bearings for instance) are imperitive.
http://www.nytimes.com/2009/09/27/opinion/27friedman.html?_r=1&em

Posted by zorro at September 28, 2009 2:35 PM

Good article, Zorro. Thank you. But it also seems imperative to focus on both making and selling things which will still require the elements in Steve's post. (It seems that we have done to much of the latter and less of the former.) I also think that perhaps our emphasis on service and not production, on paper and not products, we have de-emphasized retooling.

How do we retool paper, not by the means mentioned in the Friedman article by "stripping the African forest for wood" but by creating debt derivatives and the like? Frontline employees and service are irrelevant without products and the necesary engineering and innovation, needless to say. WHAT is being made or sold?

By the way, I don't think anyone here is suggesting that there need not be measurements of any kind. The post is relative to the exclusion of the seemingly immeasurable: "If you can’t measure it, you shouldn't do it."

Posted by Judith Ellis at September 28, 2009 4:27 PM

zorro - great piece by Tom Friedman, who sees the Chamber of Commerce as a relic of the Pleistocene.

Posted by John O'Leary at September 28, 2009 4:48 PM

I just see a bias in this blog towards the intuitive and the emotional (it is a bias people would naturally have if their business is mainly to motivate).
Would anyone listen to a business guru who brought in examples that show how measurement can work wonders? (in the early eighties, people didn't listen to the numbers guys and that is one reason why the Japaese eat our lunch in the auto industry).

Posted by zorro at September 28, 2009 5:01 PM

Seems like plenty of sentiment also for boring and no longer relevant here; agreed.

Posted by Michael at September 28, 2009 5:45 PM

No Child Left Behind + Testing & Measuring + Testing & Measuring = Total Failure (particularly inner cities)

Our public school systems are a clear indication of measuring students to make money, but not have them learn anything or be creative and innovative...the biz world has followed suit quite well.

Posted by Joker at September 28, 2009 5:55 PM

I LOVE to read these comments. And have you noticed that they grow exponentially when Tom decides to take a break from blogging. Too funny. :)

Any way, Joker, the bias you see is not towards the intuitive and/or emotional. It's a bias towards action! There's way too much philosophizing going on in the world of business today. Too many really smart people skilled at rhetoric and argument, and not enough "doers" actually making a difference in people's lives.

And regarding Deming and his philosophies (and I spent a few too many years at G.E. learning and teaching them): They were less about measurement than they were about people, inclusion, change, fear, etc. Here are a few passages from Deming's System of Profound Knowledge:

"The prevailing style of management must undergo transformation. A system cannot understand itself. The transformation requires a view from outside. The aim of this chapter is to provide an outside view—a lens—that I call a system of profound knowledge. It provides a map of theory by which to understand the organizations that we work in.

"The first step is transformation of the individual. This transformation is discontinuous. It comes from understanding of the system of profound knowledge. The individual, transformed, will perceive new meaning to his life, to events, to numbers, to interactions between people.

"Once the individual understands the system of profound knowledge, he will apply its principles in every kind of relationship with other people. He will have a basis for judgment of his own decisions and for transformation of the organizations that he belongs to. The individual, once transformed, will:

* Set an example;
* Be a good listener, but will not compromise;
* Continually teach other people; and
* Help people to pull away from their current practices and beliefs and move into the new philosophy without a feeling of guilt about the past."

I appreciate your thoughts Joker, immensely. If it were not for your comments, I would not feel compelled to participate. So thanks (I guess).

Posted by Tom Asacker at September 28, 2009 5:58 PM

Creativity is not a problem in the USA -
We invent everything and the rest of the world
takes these ideas,makes stuff and sells it back to us. We are an ADD country - we have no follow through.

Posted by zorro at September 28, 2009 6:06 PM

Tom A,

Well done and said...I have committed my life to being a grunt because that's the only place I can find satisfaction in work; or make any REAL contribution.

You say and see things very balanced.

On another note, I bought GE at $9.00 and change (NYSE) a few months back. Now that's a return I can measure and a risk I was willing to take!

Thx Tom

Posted by Joker at September 28, 2009 6:44 PM

Great post, Steve.
Might be worth taking this in a slightly different direction by distinguishing 'cost' and 'value', thereby pulling some of the numbers-guys back into the discussion? We can optimise ROI by investing a 'cost' that is lower than the 'value' it represents to the other party, thereby encouraging them to pay slightly more for what we offer. In classic negotiation, we can deliver a day earlier to a customer who runs out of stock on a Friday i.e. a re-routing cost for us with a value to the customer equivalent to the profit on a an-instock Friday's sales. Using your example, our Check-out operator's smile costs us relatively little, but the value to a shopper is possibly worth paying 5% more for the groceries?

Posted by Brian Moore at September 29, 2009 1:53 AM

"Creativity is not a problem in the USA -
We invent everything and the rest of the world
takes these ideas,makes stuff and sells it back to us. We are an ADD country - we have no follow through. "

If you want an example of a nation that won't follow through look at GB one of the most inventive countries around. Do we make the most out of it - no.

One things I find interesting is the polerisation of the facts verses intuitive. Why are they viewed as different. Maybe it's the way my brain works but I see it all at the same time. As I have said many times before management is not the art of doing one technique or fad well. Its the art of conciously applying the right thing at the right time.

Posted by PaulH at September 29, 2009 2:10 AM

Great post Steve and great comments, thank you all.

My view....

Simple management by numbers matters, these are basics that some organisations and people just can't manage even with an MBA. Soft indeed is hard but for some hard is harder! and so they run away from the facts, the dta and the insights it can and does bring.

I love the Einstein quote, it has balance.

For me information based decision making is about striking a balance, but it is about using the data also and understanding how it can help. It is part of the battery of things including the gut!

However, how many actually measure the ouctomes of what the marketeers say, that billion dollars for the last great idea did that hit the bottom line? or are we onto the next thing?

Soft is indeed hard but MBWA helps in both directions up and down the organisation, can I measure this, yes in unsolicted feedback?

Don't forget the numbers, please, soft is hard is a great mantra but it has to have hard as well.

Have the most splendid day, the sun rises over warwickshire it is truly dark now when I leave the house in the morning.

Patrick

Posted by Patrick at September 29, 2009 2:18 AM

Okay, it's 4:25 am and I have not gone to sleep yet as I've been up writing. But I don't get Brian's example. As I understand the post, a smile has value but a lack of it may cost. According to the post, why would the operator's smile cost the shopper a 5% increase? After all, the stocking issue or re-routing cost of the classic example given is not the fault of shoppers and it seems that the negotiation between the deliverer and company works out and the cost is not passed on to shoppers. But with markups it is highly likely that shoppers are still getting the worse of the deal. Of course, volume also matters as big box stores have proven and this is valuable to them. By the way, numbers are very much a part of this discussion.

"And have you noticed that they grow exponentially when Tom decides to take a break from blogging. Too funny. :)"

Why would we need Tom Peters to blog when Tom Asaker does so well with repetition? Too funny. :)

I shall now sleep for a few hours.

Posted by Judith Ellis at September 29, 2009 3:41 AM

Patrick - the sun is now shining gloriously at approaching 10 am in Britain's best county. There can be fewer more beautiful places in the world. Now I will duck and wait for the bricks.

Have a great day all associated with TP Blog and thanks for a great discussion :-)

The Joker and Tom Asacker rule - OK!!

Posted by Trevor Gay at September 29, 2009 3:55 AM

Thanks Judith, some additional thoughts for your breakfast!

1 Smiling example:
As a shopper, we buy a 'total offer package' i.e. the product, the convenience, assortment etc etc at a given price. A shop and its products appear expensive to a shopper if the shopper believes they can get the same total offer for a lower price elsewhere. The friendliness of checkout staff can appeal to some shoppers, in which case they may be prepared to pay say 5% more than the price available in other shops, just for the extra friendliness ( I should mention I am writing from the UK where service is often mistaken for servility, hence the routine unfriendliness of staff in many stores...)
The cost to the store owner of getting staff to smile may be relatively low (motivation package?)and may be lower than the premium a shopper is prepared to pay for friendliness.

2 Shipping example: this is a parallel but totally unrelated example i.e. This is strictly between the supplier and retailer. My example is meant to illustrate the process of adding value to a concession made by the supplier to the retailer. In this case the supplier is willing to incur the additional cost of shipping say a day earlier, in order to be able to leverage the extra value this represents to the retailer, ie helping the retailer to profit from not being out of stock for a day. The supplier is then in a position to demand a concession of equivqlent value in return (say earlier payment). All of this should not negatively impact the shopper. In fact it may even benefit the shopper in that the incremental profits generated by the retailer may make it possible to reduce the onshelf prices....
Now it is time for me to retire for the night!!

Posted by Brian Moore at September 29, 2009 10:27 AM

Brian - Thanks a lot for that. I think I understood the supplier/retailer connection and even the possible benefit to the shopper in example 2. What I was wondering about was the seemingly improbability of additional value to the retailer in example 2 simply by having salespeople smile as in example 1. From my non-professional retail experience the two do not seem mutually exclusive.

I was up at 6:30, went for a 20-mile-bike ride in the crisp heavily moistened air, will soon meet with two contractors and will resume writing. My day has long begun, but I've had no breakfast yet; it's now time for lunch. Was explaining the examples so taxing that you must retire so early? Or, was it the day itself? :-) What time is it there? 5:45 pm? It's 12:55 EST here. I will undoubtedly take a nap at some time today.

Posted by Judith Ellis at September 29, 2009 12:00 PM

This mention of time zones and lunch above immediately put me in mind of a recent SNL clip of President Ghaddafi apologizing for "his long and rambling speech that didn't make any sense" at the UN General Assembly. (It seems that the UK is a fan of Ghaddafi. President Obama seems to have one too.) I rolled laughing and played it repeatedly, having seen the entire speech, all one hour and a half of it on C-Span: http://www.hulu.com/watch/98399/saturday-night-live-un-address-open.

Posted by Judith Ellis at September 29, 2009 12:08 PM

Ok, 51 comments into it (thanks!), I'll share a paragraph I deleted from the post, but included at yastrow.com:

"As usual, the marketing world is somewhere between 150 and 200 years behind other areas of intellectual thought. The 19th century transcendentalist movement, so closely aligned with thinkers such as Ralph Waldo Emerson and Henry David Thoreau, was a direct reaction against materialist thinking. By “materialism” I don’t mean Valley Girl let’s-buy-Prada materialism. I refer to the idea that all of our knowledge must come from what we experience in the material world. Transcendentalism recognized that our minds have the ability to go beyond, or transcend, the realm of our direct experience, and that it is possible for a thinking person to determine things that fall beyond the reach of the five senses."

We are capable of seeing beyond what we see on the surface. Use the numbers. Dissect them. Disaggregate them. Look at them from many angles. Understand them. And then, look past the numbers and make the right decision.

Posted by Steve Yastrow at September 29, 2009 11:59 PM

Steve - Thanks again for the excellent post and the addition here of the paragraph above. Although, I'm afraid some here might balk at the use of terms like transcendentalism as if you yourself are not in the real world making it happen and your education and experience do not themselves make you who you are in your particular work and propel others to hire you. Good work in blending your music and philosophy into a brilliant business career. Hats off to you!

Zorro - There is a beautiful balance below that's appreciated. Thank you.

"Almost everything that is being said here cuts both ways. Saying yes to something can also be an excuse to not think (the morgage crisis comes to mind)... Any bias - a bias to measure everything or a bias to rely on intution - can be a problem. Its more fun to discuss intution because it involves more emotion - but this too can be a problem."

Posted by Judith Ellis at September 30, 2009 8:10 AM

Highly relevant post by Steve and equally illuminating comments. Obviously I love the Einstein quote. I love the lamppost one by Trevor as well. I work for a measurement product company where almost every department uses data to make one point or other, all the time. Many times it is to challenge the blunt truth staring them in face. Some smart people though see through the crap once in a while.
Paul made a great point about data genrated by BI and ability of top leadership to deal with it. Somehow the emphasis on simplicity and commonsense gets lost in the humdrum of technology and jargons today. A great example is the financial crisis where the complexity of products and the interrelationships of various systems far outstripped anyone's ability to fathom what it could culminate into. And when the **** [Edited for profanity. Please see the comment ground rules in the FAQ. Thanks.] hit the fan everyone ran for cover.

Posted by Mohit Bhushan at October 8, 2009 12:17 PM

"Somehow the emphasis on simplicity and commonsense gets lost in the humdrum of technology and jargons today."

Brilliant Mohit- couldn't have put it better myself.

Posted by Trevor Gay at October 9, 2009 1:41 AM