Ideas

Optimism as a Personal Strategy

By Bill Freedman

Over the years, pop psychologists, philosophers, business leaders and politicians have weighed in on the topic of optimism. Now it’s my turn.

My review of the optimism literature found no shortage of inspirational bon mots. Some of my favorites include:

“Better to light one small candle than to curse the darkness.” ~ Chinese Proverb

“The cynic is his own worst enemy. It requires far less skill to run a wrecking company than it does to be an architect.” ~ U.S. Andersen

“We must be the change we wish to see in the world.” ~ Mahatma Gandhi

“Never tell people how to do things. Tell them what to do and they will surprise you with their ingenuity.” ~ General George S. Patton

“The task of the leader is to get his people from where they are to where they have not been.” ~ Henry Kissinger

These quotes are both amusing and inspirational. Without optimism, I’d have no choice but to accept my current assessment of reality as the only possible outcome. Not a pretty picture. The only positive from having a pessimistic outlook is that you will rarely be disappointed. “Death,” Woody Allen reminds us, “is one of the few things that is easy to do while lying down.”

For me, optimism is a way to shape reality. It is a belief that the future can–and will–be better than today. Let me be clear that I’m not being Pollyanna in talking about optimism as a strategy. Optimism alone is not sufficient for success. Optimism devolves into naiveté without a compelling vision, effective planning, a meaningful set of resources, and most importantly, action. The successful optimists that I know bolster their optimism with a strong foundation in reality and acceptance of the laws of physics and economics.

So how do I put optimism to work? I begin with an assessment of today’s reality that is grounded in evidence and fact. Today’s reality, however, isn’t destiny. Individual action can and will impact reality. Vision is the recipe for stirring together today’s reality and action to achieve your better future. And finally, optimism is the catalyst that induces action. It compels an investment of resources (and perhaps inspires others to join you) in the hope of achieving your vision.

Optimism is a very powerful tool for progress. As Scoop Nisker, a reporter at San Francisco radio station KFOG said in each of his broadcasts, “If you don’t like the news, go make some of your own.”

The Calculator Within, Part 2

By Bill Freedman

Thanks to part 1, I have your attention. Good.

Let’s cut right to the chase, price leadership appeals strongly to our inner calculators. It is universal (rational in the words of the economist) when products are identical, to choose the lowest priced item. Walmart is the master of this strategy through tactics ranging from featuring prices prominently in their merchandising, running their price rollbacks ad campaign, and (in legend) fleecing employees and suppliers. Similarly, commodities like gasoline and groceries are inner calculator plays by subverting aspects of quality and service to the almighty price.

Inner Calculator

FedEx created an industry by appealing to the inner calculator. “If it has to be their overnight,” the saying goes. FedEx marketed their 10:30AM next day delivery service level agreement and backed it with a money-back guarantee. So we know the FedEx delivery time, but what is the price for their service? I don’t have a clue, but know it’s a lot more than $0.39 for a first class stamp. We each use our inner calculator to determine if the value of overnight delivery is substantial enough for FedEx.

The inner calculator drives software buyers to value quality and service more than price. (Innovation is also a key factor, but that is a different topic for a different day.) As a result, selling on price alone is rare in the software industry. Bill Gates’ and Larry Ellison’s personal wealth are the poster children of a software industry built on quality, service and innovation, not price. On the buy side, countless IT professionals, from programmers to CIOs, have build careers and nest eggs on their ability to translate the principles of quality, service and innovation into specific business solutions.

Even with the emergence of open source software, quality and service continues to trump acquisition cost. Open source makes technology free to acquire. Importantly, the projects and businesses that succeed in open source create a long term value advantage well beyond the initial acquisition cost savings.

Every time I look at an IT department budget, the number that sticks out is labor costs…employees. Smart CIOs know that is where the value is. They also know that the software they acquire is a rent payment on the brains of smart programmers working for software companies. IT professionals who listening to their inner calculators know that open source may be “rent free” at time of acquisition, but it is not “cost free” over the useful life of the technology.

While smart labor is in IT, the cost areas that make or break a business are in ongoing operations. Automating critical but repetitive functions such as processing orders, monitoring quality, and routing information are prime areas where IT applies smart labor to create long term value for business. After all, the most efficient bank teller cannot compete with the speed, accuracy or cost of operating a banking portal for displaying bank balances.

Focusing the Inner Calculator on Value

While price is always a factor for the inner calculator, its not the most important number. The most important number is the value assigned to the features, services and innovation of a product offering. A customer that precisely knows the value associated with a potential purchase or by automating a business process is the one that is ready to put the inner calculator to use…and to buy something. And Walmart, FedEx, Oracle, Microsoft, and Red Hat all have mastered selling to the inner calculator of IT executives to the delight of shareholders and customers alike.

The Calculator Within, Part 1

By Bill Freedman

In my experience, there is no better way to foster a heated discussion than to quantify a claim. From guessing how many gumballs are in a pickle jar to forecasting future interest rates, humans have an inner calculator ready to quantify the size, scale and trajectory. Of course, anyone and everyone can shout out a number. Some, however, are more savvy (and more accurate) with their calculators than others.

Many marketers, myself included, present quantified claims. Fewer, however, explore the behavioral impact of such claims on customers. How you frame a discussion about quantitative information determines if you are “in the game” or irrelevant.

Quantifying claims achieves two important outcomes. First the quantified claim either establishes or fails to establish a bond of empathy between you and the customer around a specific area of interest. One clever example is a local real estate agent who sends a monthly mailer including the address, number of bedrooms and sale price of local houses. For homeowners in the neighborhood, this mailer sets their inner calculators abuzz with estimates of the change in value of their own homes. For renters or homeowners in different neighborhoods, the calculator is quiet.

Second, the quantified claim either establishes or fails to establish credibility. Returning to home real estate, think of all the mortgage refinance offers you receive in the mail offering below-market interest rates. The savvy inner calculator quickly rejects the low-ball rate. These mailers exist to prey on people who’s inner calculators are less refined or perhaps malfunctioning.

Empathy and credibility are important prerequisites for any conversation or business transaction. Prerequisites are nice, but I play to win. Moving from prerequisites to winning transactions is important work–and the focus of part two of this topic. You can read part 2 on December 8 right here at Bill Freedman’s Soon To Be A Major Trend.

Rereading Geoffery Moore’s Crossing the Chasm

By Bill Freedman

Geoffery Moore's Crossing the Chasm

I remember reading Geoffery Moore’s Crossing the Chasm when it originally came out in 1991. At the time it seemed like a useful statement of obvious regarding market and product maturity with useful suggestions on how to move beyond selling to early adopters. His “revised” technology adoption life-cycle and “whole product” marketing became core parts of my practice of marketing. The book sat on my bookshelf, unopened for years…until last week.

I was asked by a client (recently funded and still in stealth mode) to help clarify the opportunities for integrating their new service with an established market leader. The assignment sparked a memory of Crossing the Chasm‘s pen-based computer example and a sample user, Jerome. I pulled the book off the shelf. Nostalgically, I scanned the book. I then read the discussion target-customer characterization. Wow. Fifteen years after its original release, the analytical framework and lessons remain useful and fresh.

In this case, the Crossing the Chasm model helped me deliver sound product marketing deliverables. Using the framework, I was able to quickly articulate some powerful use cases which were fairly easy to validate.

The client and I still have more work to do before launching the company and the product. Following the ideas in Geoffery Moore’s Crossing the Chasm enabled us to forge agreement on target customers, key investment areas and whole product issues.

Asking For Help

By Bill Freedman

For many people, especially clever people, asking for help is hard. Very hard. Like many of you, I enjoy solving problems on my own. I get great satisfaction from solitary problem-solving tasks such as finishing a 1000 piece jigsaw puzzle, mastering a particularly challenging Sudoku or climbing a difficult mountain trail.

There are other kinds of problems that need solving. No, I’m not talking about crossword puzzles, but the fuzzy, complex and nuanced problems faced in business and life. The ones where a worthy solution creates a new crop of problems (or in business-speak, opportunities) that need equally thoughtful consideration.

These problems come in all shapes and sizes. The economic: what is the best use of my abilities? The political: how can I foster peace, understanding and growth in my community? The business: how much money and skills (if any) should I invest into solving a market need or customer problem?

On the surface, asking for help creates the appearance of vulnerability. But a deeper analysis demonstrates that asking for help is one of the most powerful forms of leadership. Why? Because solving fuzzy problems isn’t an individual task. This is mainly because not everyone agrees that there is “a problem” or that a particular “solution” is valuable.

Those who seek to solve these sorts of problems on their own are tilting at windmills. To paraphrase H L Mencken: for every complex problem there is a solution that is simple, neat-and wrong.

Alternatively, asking for help is an opportunity to understand how others feel about the issue. Does the problem need urgent attention? Is a solution vital to others? Sometimes you’ll find out if the problem is correctly framed. For example, is the use of modern phone call recording technology a matter of personal productivity, national security or constitutional rights? No simple answers here.

Asking for help is a chance to get feedback on a potential solution to the problem. If others agree with the solution, you can take a more aggressive step and ask for an endorsement or for resources to further your proposed solution. It is in these important moments that asking for help crosses the line from vulnerability to leadership. It’s important to note that this type of leadership and persuasion brings with it an obligation to further the desired end. I’ll discuss obligations at a later date.

Fuzzy problems need organization, clarification and consensus, not a solitary solution. So the measurable unit of success in asking for help is the degree of support behind the proposed solution. Building support, building a coalition, accumulating resources toward an end involves as much problem-solving attention as any puzzle. And the help, the support, the admiration that you get from others in advancing the solution is mighty satisfying.

Evidence, Persuasion and Perception

By Bill Freedman

Marketing-speak is littered with all kinds of trite sayings. I was in a meeting today at a business software organization where the words “perception is reality” was uttered yet again. I sat quietly listening to the speakers’ claims. My client does, after all, have experience in the market, with customers and with the technology.

I understand the logic of the truism. If a customer believes something to be true, they will act on their beliefs. In my experience, prospective IT customers are a skeptical bunch. They distrust advertising slogans and sales claims. And for good reason: they’ve been burned by bold claims and vendor promises.

So the real question isn’t “if” the prospective customer believes your claims, but rather how to persuade the customer to conclude that they need your product and services. In other words, what can you do to induce the prospective customer to take the actions you prescribe. These words are easy to say, hard to accomplish. Changing individual behavior is hard to do. Changing the behavior of a large segment of the market is a remarkable accomplishment.

Evidence, I believe, is the strongest tool for persuasion. Evidence comes in many forms: quantitative studies, product demos, customer references, cost/benefit analyses and others. Evidence stands apart from claims in that it is grounded in one or more forms of reality. Typically evidence is tangible. Most importantly, customers can assess and experience evidence on their own terms.

Creating evidence with the power to change market and individual behavior is hard. It is rarely the case that your product aims at a greenfield opportunity and has no relevant competition. People are very much creatures of habit, making incumbent solutions to problems seem acceptable. Evidence however, can shock markets and individuals into action. They may not buy immediately, they may not even fully accept the evidence, but they will use the evidence to test and perhaps alter their perception of reality.

Is perception reality? Perhaps. But if you want to change perception, you better get some evidence.