Alien Skin Software is not a normal company. Sure, we like money. Send us as much as you want. But our most important goal is to enjoy our lives. Since we spend way the hell too much time working, we try to find ways to make work fun.– Alien Skin Software, Corporate Philosophy

Man, I hope these folks keep winning.

Hired to replace Robert Dynes in the aftermath of a management meltdown in which UC administrators flouted, circumvented and violated university policies governing pay and perks, the 63-year-old [Mark] Yudof knows his mission when he officially takes over next month.”I’ve really got to get the trains running on time (at UC). There are a lot of things I believe in, like global initiatives and dealing with the deferred maintenance on campus and being absolutely competitive for faculty,” he said in a recent interview in the East Bay. “But I’ve got to get the platform right. I’ve got to regain the trust of Californians and the Board of Regents. I’ve got to get our (number of employees) down and our budgets down. Then we can start talking about what else we want to do.”…

He recognizes that many problems are entrenched at UC. But that won’t deter him.

“There is a saying, ‘A crisis is a terrible thing to waste,’ and that is my view,” he said. “And my view is that some things we probably should have done 10 years, five years, 20 years ago may get done when you have a crisis.”

– Tanya Schevitz, San Francisco Chronicle in Next UC president - homey image, hefty mission, Thursday, May 8, 2008

Demarketing requires discipline: the discipline to decide what you’re not going to do, and then the discipline to stick with the decision.  Some people have this kind of discipline in spades:

Xiang Yu was a Chinese general in the third century B.C. who took his troops across the Yangtze River into enemy territory and performed an experiment in decision making. He crushed his troops’ cooking pots and burned their ships.
He explained this was to focus them on moving forward — a motivational speech that was not appreciated by many of the soldiers watching their retreat option go up in flames. But General Xiang Yu would be vindicated, both on the battlefield and in the annals of social science research.

In The Advantages of Closing a Few Doors (New York Times February 26, 2008), John Tierney discusses the work of MIT behavioral economist Dan Ariely.  As Tierney describes, Ariely proves scientifically that brainpower is not a sufficient driver for discipline:

Most people can’t make such a painful choice, not even the students at a bastion of rationality like the Massachusetts Institute of Technology, where Dr. Ariely is a professor of behavioral economics. In a series of experiments, hundreds of students could not bear to let their options vanish, even though it was obviously a dumb strategy (and they weren’t even asked to burn anything).

The experiments involved a game that eliminated the excuses we usually have for refusing to let go. In the real world, we can always tell ourselves that it’s good to keep options open.

…Your child is exhausted from after-school soccer, ballet and Chinese lessons, but you won’t let her drop the piano lessons. They could come in handy! And who knows? Maybe they will.

In the M.I.T. experiments, the students should have known better…

But they didn’t act like they did.  Read the article and learn about the psychology.  Then remind yourself that discipline is hard, and prepare yourself for the effort.

Schmoozing is not Selling.

Sorry I can’t remember the source of this very smart quote.  And I’m even sorrier that I didn’t learn this lesson in my early twenties rather than my (late?) 30s.

In my first job as a consulting engineer, I worked with another twenty-something engineer whom I’ll call “Susan”.  Compared to the other young engineers at our office, Susan and I spent a lot more time visiting with our firm’s various clients, and I rightfully felt that she and I were a notch better at the business side of things than our engineering-only peers.

But when our firm moved to a new building, I couldn’t help but notice that Susan got assigned to a nice private office while I was relegated to one of the large shared spaces.  So why did she rate better?  Turns out that I was spending most of my “relationship” time getting to know our clients personally and building an amicable bond.  By contrast, Susan was spending her relationship time finding out what our clients needed to get done, and telling them we could take care of it in exchange for a large chunk of money.

Schmoozing is not Selling.

And when you get right down to it, while those clients may have liked me more, they were getting a lot better service from Susan.  I was getting to know them, personally.  She was solving their problems, professionally.

Stay tuned for a followup post: Selling is Helping.

If they make me wait in line 10 minutes to spend $5, they’re not going to last.

– Bay Area curmudgeon and business critic D.M. Hunkins, placing his early bets on a neighborhood coffee shop.

Do more of your customers love you than hate you? You better hope so, because that is the number one equation that points to your profitability. So say the researchers at Bain & Co:

Research conducted by Bain & Co. established that one question reliably indicates customer loyalty (as evidenced both by repurchase behavior and by referral rates) in most industries. The ultimate question: “How likely is it that you would recommend this company to a friend or colleague?” Customers who rated a company high on the “likely” scale bought more goods and services, bought them more often, gave the company a greater share of their wallet, and were more likely to talk up the company to others.

USEFUL NUMBER. We also discovered that some simple arithmetic yielded one particularly useful number. Ask customers to score your company on the “would recommend” question, using a 0-to-10 scale. Label those who give you a 9 or 10 promoters—they are the assets that drive your growth. Label those who rate you from 0 to 6 detractors—they are the liabilities that eviscerate growth. Subtract the percentage of detractors (liabilities) from the percentage of promoters (assets) and you have your net promoter score.

Tracking NPS month in and month out—by branch, division, product line, or whatever else makes sense—helps focus organizations on the basic engine for profitable growth, getting more promoters and fewer detractors.In fact, NPS correlates well with growth among competitors. In airlines, for example, no airline has had superior growth without a superior ratio of promoters to detractors. In warehouse retailing, Costco (COST ) has the highest NPS and by far the best growth. A new study of retail banking shows the same pattern, with growth rates closely matching NPS scores. The leader here is New Jersey–based Commerce Bank.

– Fred Reichheld in NPS: The Next Six Sigma?, Business Week, September 22, 2006.

So how’s your NPS? If you’ve got no idea, it might be time to ask.

“It is not unusual for extraordinary sales professionals to communicate demarketing messages via the mass media. James C. Hansberger is an ESP and senior vice president for Shearson Lehman Hutton, Inc. A recent article bout investment counselors defined his target market as follows; “His client’s net worth ranges from around $2 million to $20 million, with a very few in excess of $100 million”… Demarketing messages of this type are very important for many ESPs Communicating to the general population one’s ability to provide services will generate many inquiries from persons who will never qualify as profitable clients.”

– Dr. Thomas J. Stanley, in Marketing to the Affluent (1988 edition)

Your numbers may be different from the 1980s financial advisor’s, but the idea is the same and twice over. You only want to attract business from people who are going to be good for your business.

Sophisticated marketers incorporate this principle into their decisions on where to invest attention — they choose the right trade shows to exhibit at, the right cities to open offices in, and the right prospects to mail to. But the extra-deft marketers also incorporate this principle into their “demarketing”* efforts to discourage unsolicited attention from people they don’t want to work with. By broadcasting messages like the financial advisor’s example, above, businesses can preempt wasted efforts without hurting anyone’s feelings or wasting anyone’s time.

——-

*”demarketing”. I love that word. It sounds almost Seinfeldian.

Tests and Measures

Some people are born knowing what they want to do, and even how to do it.  The rest of us aren’t so lucky.

…What do you want?  The majority of us go through life, often very successfully, without ever asking, much less answering, this most basic question.

The most basic answer, of course, is that you want to express yourself fully, for that is the most basic human drive.  As one friend put it, “We all want to learn how to use our own voices,” and it has led some of us to the peaks and some of us to the depths.

How can you best express you?

The first test is knowing what you want, knowing your abilities and capacities, and recognizing the difference between the two. 

…The second test is knowing what drives you, knowing what gives you satisfaction, and knowing the difference between the two.

…The third test is knowing what your values and priorities are, knowing what the values and priorities of your organization are, and measuring the difference between the two.

…The fourth test is… are you able and willing to overcome those differences?”

– Warren Bennis in On Becoming A Leader: The Leadership Classic–Updated And Expanded (2003).

It occurs to me that Bennis’s tests can take an exceptional amount of time to wrestle through.  What entrepreneur could find the time and energy (or even the wisdom?) to do these tests thoroughly and well?

I have to guess that the good entrepreneur ought expect to go through all four in repeated cycles, each time through working another layer of the “onion”, finding fresh answers with each new round of questioning.  And all the while taking care of the day-to-day — perhaps discovering over time that by refining the focus of what should be done in each day-to-day, that the fourth test becomes more readily passed.

Among your outside advisors, your account is likely to have the greatest impact on the success or failure of your business.

– Jacquelyn Lynn in Start Your Own Restaurant (and Five Other Food Businesses) (Entrepreneur Magazine’s Start Ups).

Once you have a picture of how you want your life to be, and you come to the realization that it’s more than just things to have and things to do, once you realize that what you and I really want is to have the room, the openness, to expand, to grow, to be more of ourselves, whatever that means, and to find out what that means is what’s most important to us, once you see that, you can then turn to the business that’s going to help you get there; you can then turn to the development of your Strategic Objective…In this context, your business is a means rather than an end, a vehicle to enrich your life rather than one that drains the life you have.

–Michael E. Gerber, in The E-Myth Revisited: Why Most Small Businesses Don’t Work and What to Do About It, Chapter 13 “Your Strategic Objective”.