Sunday, 20 of May of 2012

Category » Decision Making

Business Lesson from Physics: Speed vs Preparation

The Need for Speed

Many scientists use nature as a source of inspiration for new technologies. If we can understand the forces of nature that govern us, we can learn to get it on our side. One physic’s equation governing nature that I find very practical in business is:

E=½mv2

While I know the sight of equations affects some like horror movies, it essentially says this:

The energy (E=energy) that something can produce is based on its weight (m=mass) and its speed (v=velocity). Of the two, speed is far more important.

In fact, if given a choice between doubling the size or the speed, doubling the speed would double the impact you would get by doubling the mass. Consider the greater damage a round, small bullet does versus a thrown stone three times its weight. In WWII, the Germans implemented blitzkrieg to help their smaller, faster forces overcome their numerical inferiority.

The business lesson is that if we have a choice between doubling our preparation or doubling the speed with which we can deliver (all other factors being equal), then we are better off with the latter. In decisions, if we have the option to double our research or double the speed with which we decide, the latter is preferred. In marketing, we often hear, “It’s better to be first than it is to be better,” translating this means our idea would need to be at least four times better than our current one to justify doubling the time to introduce it.

Often, in our effort to make the best decision, we delay. Speed, if used wisely, can help us recover quickly from mistakes and adjust to changes, thus alleviating pressure to be right at the outset. It’s why average professionals, when they deliver substantially faster, can beat experts in the marketplace.

 


Vanity Sizing: Fashion & Beyond

How we position things greatly influences the outcome. In the April 7, 2012 edition of The Economist the article, “Dressing Up,” uncovers that women’s sizes have inflated by four sizes since the 1970’s. Unlike men’s sizing which is based on inches, women’s sizing is purely arbitrary and often varies by brand. Thus, depending on the size, a pair of women’s pants might have increased as much as four inches at the waist and three inches at the hips since then.

The generally accepted assumption for allowing this size inflation is that if consumers feel good about themselves they are likely to buy, thus why the fashion industry calls it “vanity sizing.” However, even though it seems like a topic to take lightly or with which to have fun, vanity sizing plays in all aspects of statistics. That is why it’s important to challenge definitions and assumptions in order to understand and solve problems.

For instance, the article “Botox and Beancounting” of the The Economist’s April 27, 2011 edition, discusses how official U.S. economic statistics might be overinflating its performance relative to Western European economies. Ironically, the article’s title makes an appropriate analogy to vanity sizing.

U.S. unemployment figures present another excellent example. They not only conflict with one another on occasions but they are difficult to figure. Additionally, their accounting changed in the 1980′s, making them appear lower than before.

Thus, while it’s commonly said that “numbers don’t lie,” that’s true; however, an ignoramus isn’t lying either if he believes his own ignorance. If we’re ignorant to numbers’ origination, we are more likely to accept them if they tell us our glass is half full rather than half empty, thus reinforcing our own perceptions . . . also known as “vanity believing.”

 


Beauty as Power (Pt 5): Defense Mechanisms

We often hear about the jealousies women have for other women who they feel are attractive. While it’s easy to discount this as pettiness, there are business implications when it comes to appraising and hiring talent.

For example, the March 31, 2012 edition of The Economist reports in its article, “Don’t Hate Me Because I’m Beautiful,” that it’s better for attractive men to submit photos with their resumes but not women. The reason was that “human resources departments tend to be staffed mostly by women,” especially when it comes to resumes’ initial screenings. Bradley Ruffle of Ben-Gurion University and Ze’ev Shtudiner of Ariel University Centre conducted the study.

As I wrote above, it’s easy to view from a petty perspective. However, let’s frame it from a perspective of power. For instance, would a man hire another man who he felt was more powerful (i.e. more talented than he was)? More specifically, would a male manager hire another man who could take his job or the promotion he was expecting to receive in the near future?

Thus, if we look at beauty as power, couldn’t the women in this study be feeling threatened from a power perspective? This is even more possible if we review how beauty’s subliminal influence deliver many advantages to attractive people in the marketplace. As a result, rather than see the rejection of attractive women by other women as something superfluous, it’s now a natural defense mechanism.

Again, the purpose of this series is to explore the tangible, pragmatic influences beauty has on us in everyday business life. It’s not just a personal sideshow in that life. Beauty, and its superficial sister, attractiveness, trigger deep, natural forces within us that influence our decisions.

 

Other posts in this series:

 


People Eat Escargot, Not Snails

The research behind behavioral economics is full of emotional solutions to everyday problems. By tapping into the emotional biases behind our decisions, we can expand the range of limited solutions offered by rational thought models. The exploring of emotional solutions has gone big time as the article, “Nudge Nudge, Think Think” explains in the March 24, 2012 edition of The Economist by focusing on the amount of investments governments are making in this area.

Said simply, “How we phrase things matter.” I’ve written how this can change the taste of food and even change the reactions to a bonus plan. As the article explains, nudging “shows it is possible to steer people towards better decisions by presenting choices in different ways.”

For example:

  • People were three times more likely to pay an outstanding vehicular tax when the letter was simplified and included a picture of the automobile.
  • Boys did better than girls did when a technical drawing class was called “geometry,” and girls did equally well or better when it was called “drawing.”
  • People were more inclined to use less energy when their consumption was compared to their neighbors.

Not only does this help us solve problems, it also helps us avoid them by being aware of what we say so we don’t sabotage our well-intentioned plans. Choosing the right words for a personality can go a long way in helping us to effect the change we desire by tapping the right emotions.

For example, my wife won a bet at a party by talking a friend’s six-year-old daughter into selecting a vegetable over chocolate to eat. Understanding and appreciating the power behind words’ connotations helps us immensely here, and Roget’s Thesaurus is invaluable in our efforts.

Remember, people eat escargot not snails.

 


Need a Breakthrough? Delegate Upward

A while back, a manager requested my advice about moving a stalled initiative forward. She had sat down with her boss several times to discuss this, but nothing seemed to come from these meetings. After sharing with me her previous conversations on this, I noticed a trend and asked, “Have you ever asked your boss for help?”

She paused and then slowly responded, “No, I haven’t.” So, I went on to suggest that the next time she discusses this initiative with her boss that she begin by asking, “Nancy, I could use your help on something. May I discuss it with you?”

After her boss says, “Yes,” she is to thank her first, then describe her plan for moving the initiative forward and specifically telling her boss how she can help by asking, “Nancy, can you help me by doing . . .?”

Many times, as this manager did, we just expect bosses to suggest their help when we explain a situation. We might also be uncomfortable delegating upward, appearing inadequate or possibly receiving a rejection.

In this situation, the manager successfully moved the initiative forward by following this approach, but the point is this: bosses like to feel helpful too – they’re human. Of course, asking the right way helps. Bosses are more likely to help if we ask in a way that ties their help to us. This personifies our request. For instance, asking, “Can you help me by doing . . .” is much better than just asking, “Can you help?”

So, the next time a project stalls, an effort becomes difficult or a roadblock appears, ask your boss for help. Not only might you solve the problem at hand, but you might build a stronger relationship with your boss.

 


Management Lessons from Online Dating

The article, “The Modern Matchmakers,” from the February 11, 2012 edition of The Economist contained two major business lessons that I’ve discussed earlier regarding the solving of people-related problems:

  1. What people think they want isn’t necessarily what they will choose
  2. When faced with too much choice, people have less energy to think about them

    For example, the article cites the work of Eli Finkel of Northwestern University on speed-dating in which he found that “people’s stated preference at the beginning of the process do not match the characters of the individuals they actually like.” Furthermore, “that when faced with abundant choice, people pay less attention to characteristics that require thinking and conversation to evaluate . . . and more to matters physical.” In short, just as Sheena Iyengar of Columbia University and Mark Lepper of Stanford concluded that too much choice is demotivating,” Finkel found it can dull thinking processes.

    As I had also done in an earlier post on online dating, we can translate these themes to our business efforts by asking three questions:

    1. How much freedom does someone want?
    2. What does someone really want; what will he really do or decide?
    3. How much (and what kind of) thinking will someone require from a leader?

    These further translate into more tactical questions for managers and executives such as:

    1. How much flexibility or process must I give someone?
    2. What differences do I see between what he wants and what he actually does?
    3. What kind of decisions do I give her to make and what (or when) do I decide for her?

    Complicating this further is the fact that the answers will vary for each employee, requiring deeper and more interpersonal skills from managers and leaders. Are your managers up for the challenge?

     

    Previous post on online dating:  What the Failures of Online Dating Can Teach Us

     


    Regression Analysis: Visualizing Intuition

    People often have unrealistic expectations for intuition, sometimes thinking it’s a crystal ball, magic lamp or answer giver. This usually stems from trying to see it as we do cognition. However, if cognition is a map, intuition is our compass. If cognition is our street address, then intuition is our city, state or nation.

    Of course, visualizations help to differentiate between cognition and intuition. I use the schematic below that way. Cognition represents logic and reason, easily connecting each point because one naturally follows the other. One thought connects the next.

    Intuition on the other hand is like trying to find the best line to represent a group of observations. It doesn’t connect them as easily and new points don’t always fall on or near the line; however, taken as a group, our observations form a pattern giving a sense of direction to them. Thus, intuition narrows our possibilities. More significantly, we don’t need many observations to get this directional sense.

    For example, we can predict tendencies of people simply by looking at what they buy. In some cases, if we know their favorite car, beverage, hobby, store and book, we can make predictions about their favorite restaurant. Political campaigns take such consumer information and make accurate predictions about what candidates and issues potential voters might prefer. We can form psychological profiles of people from consumer – and other – activities, similar to what we see on crime shows when tracking criminals.

    While these examples are very conscious, we unconsciously pick up patterns too. These are translated into feelings, emotions and finally intuitions. That is why it’s important to listen to how we feel. It might be our intuition giving us some direction, giving us a north. In this sense, intuition can be our guiding star.

     

    Related link: My Intuition White Paper (3 pages)

     


    Real-time Personality Assessment: Freedom-Order Duality

    The Freedom-Order duality expresses a dimension of our personality involved in interpreting how we balance freedom and order. It can help us – in real time – understand, appreciate and predict better the reactions of others to such things as processes, decision-making, management, customer service, change and organization.

    However, all of this is arbitrary, subjective, meaning different people are comfortable with different levels of freedom and order. To some freedom is chaos because it seems anyone can do whatever he wants. To others order is slavery because there is someone or a rule telling her what to do. Therefore, since there are no absolute states for either, you can be the benchmark as the figure shows. This allows you to assess whether people are more freedom-oriented or order-oriented than you are by the feelings and thoughts they trigger in you.

     

    Freedom-Order Duality

     

    For instance, more freedom-oriented people might make you feel they are:

    • “Wild cards”
    • Unpredictable
    • Emotional
    • Spontaneous
    • Dynamic
    • Unfocused
    • Disorganized
    • Unprepared
    • Winging it
    • Scattered
    • Undirected
    • Flashy

    You might also notice they tend to use words such as these:

    • Flexible
    • Tolerance
    • Independent
    • Different
    • Adaptable
    • Unlimited
    • Dynamic
    • Customize
    • Diverse
    • Free hand
    • Openness
    • Deviate

    By contrast, more order-oriented people might make you feel they are:

    • Structured
    • Uptight
    • Controlling
    • Domineering
    • Inflexible
    • Unimaginative
    • Micromanaging
    • Analytical
    • Narrow-minded
    • Detailed
    • “By the book”
    • Rule fanatics

    Similarly, you might find them using words such as:

    • Structure
    • Process
    • System
    • Arrange
    • Classify
    • Control
    • Accountable
    • Quantify
    • Collate
    • Distribute
    • Manage
    • Discipline

    In our daily business lives, this means adding process and procedures to those who are more freedom-oriented than we are might stir anxious feelings about becoming nothing more than an automaton. Conversely, more flexibility and options to more order-oriented people might trigger anxious feelings about what is the right thing to do.

    Once we are sensitive to this, we can better position the change by adapting immediately to what we observe in others. To the freedom-oriented people, we will need to reassure the flexibility of adding their own dimension, and to order-oriented people reassuring clear definitions of their duties will exist. In essence, we personalize our approach and words to by appreciating people and their needs better.

     


    Relationship Building Technique #3: Pause

    We often don’t learn the value of listening techniques in building relationships. Consequently, people might not realize we are listening; this needs to occur to build relationships.

    A pause is usually a short, silent break in an interaction of about ten seconds or less. However, it requires discipline to stay quiet, especially if you’re waiting for an answer or a reaction. Pauses give others thinking time, encourage others to talk and fill silence, and slow down a conversation to temper negative emotions.

    We employ pauses by suggesting others take their time, asking for “a moment to think,” looking upward or to the side before responding, and incorporating thinking gestures such as:

    • Connecting finger tips of both hands
    • Hand to the chin
    • A couple fingers over mouth
    • Clasping hands

    Some examples of pauses include:

    • Silence before responding
    • Asking, “Do you mind if I think about this a moment?”
    • Allowing the listener time to think after asking a question

    From a relational perspective, pauses convey the feeling that you are:

    • Thoughtful, not thinking off the cuff
    • Deliberate in decision making
    • Not reciting some canned response or talk
    • Patient in waiting for a response
    • Not fearful of silence
    • Willing to give others a quiet “space” to think

    The effect of the pause is to encourage people to:

    • Open up as they attempt to fill the quietness
    • Cool down from heated remarks (good conflict management technique)
    • Share more because you are giving thought to conversation

    As simple as pauses seem, they are effective relationship buildings when integrated with other techniques.  They encourage a more casual and friendly conversation. By demonstrating that you’re thinking about what others say; you convey that you’re listening too.

     

    Other posts in this series:

     


    Change Technique: Personification

    In a previous post, I discussed the rebirth of Freud and the idea that most (if not all) of our decisions are driven unconsciously. Personification is a way we can influence others’ decision-making on this level.

    Revisiting The Economist article “Retail Therapy” in its December 17, 2011 edition, it says about Ernest Dichter, who revolutionized marketing in the 1960’s:

    Dichter understood that every product has an image, even a “soul”, and is bought not merely for the purpose it serves but for the values it seems to embody . . . Dichter’s message to advertisers was: figure out the personality of a product, and you will understand how to market it.

    Personification is giving something a personality. For instance, my wife has a name for her car. People do the same with boats. Advertising often links products to celebrities; they become the “face of the product”, and thus its personality.

    Translating to business, we encourage change if we can give change a personality. Sometimes it’s as simple as putting the face of the Owner, President or CEO on the change by saying, “It’s George’s initiative.” We can do this formally or informally; we can do this with projects, ideas and plans: “This is Mary’s project, Matt’s idea, Kathy’s plan.”

    We can also reference other types of people to the change such as “The Herculean Effort,” “The Superman Plan,” and “The Rocky Project.” Any person will help as long as the connection to the person is a positive one. For example, if people don’t like Mary, her name will likely hurt the change.

    When it comes to change management, we often neglect to tap into the techniques that work in advertising, merchandising and marketing. Personification is just one of those techniques.