new blog post

It seems there are people that follow this blog who still haven’t updated their subscriptions… if you’re still interested in reading my posts, I’ve posted a new business blog post over on my new website: http://clearthinkingconsulting.com/overcoming-obstacles/

Enjoy

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Moving

To all faithful readers:

I’m moving this blog over to clearthinkingconsulting.com. I want to start branding myself better, and I’ve decided to call my company Clear Thinking Consulting. So if you head over there, I will keep posting all the same content that I posted here. I’m sorry for any inconvenience, but I thought it was time to make a change. At that website I have more control of the site–for example, you won’t have to look at any more ads–and I’ll be able to expand and market it better.

So I thank you in advance for your attention, and hope you’ll join me for new adventures there.

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Obamacare

So I’m way behind on my posts; I have a post I’m working on on Pixar, as well as one on the Target hack, but for this post I wanted to write about the contentiousness around Obamacare.

I’m on Obamacare myself; I’m self-employed, so I went through Obamacare to get my insurance. It kicks in this month, so we’ll see what happens.

This issue on the whole is so complicated, it’s hard to know where to begin, except for one fact: “America is the world’s only rich country not to have universal health care” (Economist, March 29, 2014: 27). I saw an info graphic on Facebook theoretically about a happy Danish woman who supports higher taxes to pay for her social services. How are we supposed to think about this?

The logical way is to always try to avoid falling into the diamond dealer trap: do you want the yellow diamond or the diamond with black spots? Neither, of course. So the diamond deal here is, do we want better services and higher taxes or keeping the broken system we have now and keep taxes down? Obviously the goal of Obamacare is to avoid this trap: you won’t have to raise taxes to cover Obamacare if more healthy people sign up and pay premiums. Will it work? It’s too earlier to say now, but the projections sometimes look grim.

The truth though is that there is nothing we can do to fix something without correcting the intention behind it. If Obama’s real intention is to help more Americans get health care, then most of the results should be positive. If the intention though is to maintain a broken system where health insurance companies can make tons of money and deny health insurance claims, then the rich will get richer and the poor will continue to get poorer.

Consider Obamacare,
It will help Americans,
Because more of them will get insurance.

Test #1: more Americans do have insurance. Test #2: if more Americans get insurance, it must help them? One of the comments in an article above discusses how a woman’s son, vomiting blood, didn’t go to the hospital because the Obamacare plan he chose had a $5k deductible. Test #3: If something doesn’t help Americans, it must be because it didn’t help them get insurance.

But what about:

Consider Republicans,
They should fight against Obamacare,
Because it doesn’t help Americans.

Test #1: it helped me; I got insurance for the first time in years. Test #2: if it doesn’t help Americans, they must fight against it. Or #3: if the don’t fight against it, it would help Americans. This one fails all three tests, I think.

So what should we do? Ideally, sit down and work together with the intention to help the most people.

Consider Obamacare,
It will help Americans,
Because we want to help each other.

Test #1: do we really want to help each other? Test #2: if we want to help each other, must it help Americans? Yes, if you accept the first law of seeds. Test #3: If something doesn’t help Americans, must it be the case that we didn’t want to help each other? Yes, the results of our actions are always dependent on our intentions.

So how do we fix Obamacare? It would have to start with us all wanting to help each other. What a strange concept.

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Flywheel Effect (Part Two)

In my last post I discussed the “flywheel effect”; how Howard Schultz, CEO of Starbucks, places his new products in Starbucks stores to build brand recognition before placing it in supermarkets. The question then, from a mental seed perspective, is, if this is working, why is it working?

I’ve discussed before how I think what is now accepted as best business practice is a result of using seed management that works: for example, we now know that you have to treat your employees well (if you don’t, you’ll see them working for your competitors). This works well with seed management; treating your employees as a way to plant good seeds is good karmic management.

Similarly, if we want the flywheel effect to work for us, this is a how, not a why. If you have a headache and take an aspirin, and your headache goes away, then the aspirin is how your headache went away. But a lot of people take aspirin and their headache does not go away, because the aspirin is not the cause of removing a headache. Taking care of other peoples’ health is the real cause for the aspirin to work.

Similarly, the flywheel effect will work for some companies or some products, but not for all of them. Why? Because it’s a how, not a why.

So why, meaning from a mental seed perspective, would the flywheel effect work?

We have a saying in English, “Practice makes perfect.” All such slogans are false in some respect, but also contain a kernel of truth (or they wouldn’t survive). How does practice make perfect?

From a seed perspective, the first time you try something, if you fail, what is going on? You’re purifying your old bad seeds. And if you purify enough of your old bad seeds, then your new good seeds will have a chance to ripen.

In other words, I think what might be happening for Starbucks is as they sell a new product, if they are trying to serve their customers, they are purifying old bad seeds and planting new good seeds. Then, when they take their product to the supermarket, they have already planted the seeds they need to see success.

We have a concept called 10%; if you want to plant seeds to be wealthy, take 10% of the money you have coming in and save it in an account to give away later. This is actually better than just giving the money away, because every time you think about giving the money away you plant more seeds. So if you save money for six months before giving it away, you plant seeds for six months thinking about what you’re going to do with the money.

In the same way, if you sell a product that your customers enjoy, you’re building up the seeds you need to see yourself be successful. Especially if you have to motivation to make sure the product is something that your customers want and enjoy.

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Flywheel effect (Part One)

As is my wont, I was reading the inflight magazine on my flight back from NYC–I never fail to find something to blog about in an inflight magazine–and I saw an article about Starbucks, so of course I had to read it. (This particular flight was Delta, so their inflight magazine is Delta Sky.)

Actually, the article is called Howard Schultz and is about how he bought and managed Starbucks as its CEO. He started as CEO, left, it went through a downturn, and he came back and managed it back to success, so it’s interesting to read his story. What’s his secret?

The article claims that he attributes part of his success to the corporate culture of Seattle (“There is a way of doing business [in Seattle] that is alive to natural friendliness and gratitude.”); sounds great, but logically I can’t buy that one–if that was true, every business in Seattle would succeed, and he wouldn’t have had to come back as CEO to save the company. But some of his other answers make more sense to me (“Treating people with respect and valuing them is a universal language. Culture trumps strategy.”), but what ended up catching my eye was Schultz’s mention of what he calls the “flywheel effect.”

I didn’t think it was totally clear from the article what the flywheel effect was, so I googled it. I found a website/blog that describes it as:

I’ve always liked the flywheel analogy, because it’s a great mental image of how a business gets from Point A to Point B. Getting a flywheel started takes a lot of effort – you push, and you push, and you push. Then, it becomes a little easier to turn it. And finally, it starts to generate momentum all on its own, and suddenly, what once took so much effort becomes effortless, and self-sustaining. You’re “in the groove”.

So what I gather is that what flywheel effect is that something gets easier after you have been working at it awhile. Armed with this information, what Schultz says in his interview makes sense:

One thing tying all the various initiatives together is what Schultz likes to call the “flywheel” effect. “We can introduce a product in our stores, and then use social media and mobile payments to expand the brand into grocery stores.” Already, La Boulange pastries and Evolution Fresh juices are sold at many Starbucks stores, and Teavana tea products will soon follow. Consumer familiarity with those brands will help expand grocery store sales, a business Schultz believes could grow to $10 billion.

So here what I think Schultz means is that by selling it first in their (Starbucks) stores they build brand recognition, so that when it hits the grocery stores it’s already a known brand and sells itself.

So I want to talk about why this might work. How it works is you build brand recognition. But does brand recognition always lead to success? We like to think so, but if that was true, again, Schultz wouldn’t have had to come back and bail Starbucks out–it certainly already had brand recognition. So why does the how work (when it does)? Figuring that out always means we have to find the mental seed.

So what could the mental seed for Schultz’s flywheel effect be? In other words, why do things get easier (sometimes)?

I’m saving my answer for my next post, in the meantime, what do you think?

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The Ethics of Giving

So first I want to thank a friend of mine; I was looking for a hashtag to use on twitter for ethical business (it appears #ethical is what people are using) and a friend of mine pointed me to this page on Ethical Business. I thought it was great and from there found a link to an article on TOMS expanding into coffee.

TOMS, if you’re not familiar, is famous for having created the one-for-one model: for every pair of shoes they sell, they give away a pair of shoes.

Obviously, I think this is brilliant. Perfect karmic management; if you want something for yourself, give it away to other people.

But TOMS hit a snag:

While garnering media praise, TOMS has come under considerable criticism from the aid workers. Critics argue that giving away shoes is at best only a temporary fix to much deeper problems and at worst damaging to local businesses.

“TOMS Shoes is a good marketing tool, but it’s not good aid,” said former aid worker and blogger Saundra Schimmelpfennig.

So what’s going on here? Doesn’t the first law of seeds say that seeds are definite? How can something good come from something bad? In Christian terms, why do we say “the path to hell is paved with good intentions?”

As in all such sayings, there is a kernel of truth, I think. It is true that nothing bad can come from something good. But is that really what’s going on here?

For example, is it a good thing to give away shoes and undercut local businesses? Would that be a good seed? But that is, at least in part, one of the seeds that was planted. If I charge in and give away shoes, without considering the larger impact of what I’m doing, would you call that a good seed or a bad seed?

If I were to write it out as a syllogism, it might look something like:

Consider my act of giving,
It will produce only good results,
Because…

If I write “Because my intentions are good” I would answer “your reason is not established” (fails test #1). How good are your intentions if you never bothered to figure out the impact of what you’re doing? Wishful thinking does not necessarily translate into good intentions. If you really had good intentions, you would do the work and investigate the impact of what you’re doing.

Unfortunately, many times “doing the right thing” is not as simple as just giving something away. Again, in the Christian context, it’s better to teach someone to fish than to give them a fish.

So the exciting thing about this article is it appears TOMS has figured this out; for their next venture–coffee-rather than giving away free coffee, they’re partnered with an organization that can scale to provide water to people in need through sustainable investments.

I love it; I’m so excited for them. Giving is an art, and we all have to practice it to get better at it.

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Bragging Your Way to Success

I’m reading business magazines again; I just bought the most recent issue of Fast Company. There’s a couple of things I might write about it in, but, as usual, I like to go for the low-hanging fruit first: the thing that struck my eye as I opened the table of contents was: “No. 20/Brash Talk; Box, Tesla, T-mobile, and WWE are thriving by embracing bluntless.” (Dear Waldo, which one is not like the other?) On page 97, we get a list of “Chief Bragging Officers” that includes John Legere, CEO of T-mobile. Since my sister just switched us to T-mobile, this caught my eye.

According to Fast Company, here is a sample of John’s bluntness: “During a January speech at the Consumer Electronics Show, Legere said, ‘AT&T is a total source of amusement for me. They are the ones that take my bullshit. Dumb move. They take the bait.” The article follows this up with the claim that “Legere’s profane rants… have allowed them to steal market share from gigantic competitors because their insults ring true for customers.”

Okay, let’s analyze that. What I’m going to start doing in this blog is use what I discuss in my book; we’ll look at this statement and analyze it using Tibetan syllogistic logic:

(1) Consider brash talk,
(2) It will help me gain market share,
(3) Because it rings true to customers.

True of false? The only way to know whether something is true or not is to run the three tests. Test #1: is there a relationship between (1) the subject and (3) the reason? If your brash talk rings true to customers, then it passes this test. We could argue the point, I think. Classically, in logic, you have to ask “for whom?” Consider the black stick, it’s a pen, because who sees it as one? I’m sure for some customers, Legere’s brash talk “rings true.” For all of them? I doubt it. (I’m one; he’s not impressing me.)

Test #2: if (3) is true, then (2) must be true. So, if something rings true for a customer, must you gain market share? I don’t think so; all we need to do is find one person, who even though they think Legere might be right, is put off his profanity (a fundamental Christian perhaps) and doesn’t switch to T-mobile. Or, even easier, find someone who might think Legere is right, but perhaps they already have a contract with Sprint, so that they don’t change due to the financial penalty of doing so. Or consider my friend, who went into the T-mobile store with me a few days ago and didn’t sign up with them because he didn’t want to buy a new iPhone (regardless of whether anything Legere says rings true or not).

What about test #3? If (2) is not true, then (3) must not be true. This one is even more clear: if you don’t gain market share, is it because your brash talk didn’t ring true to customers? As if any brash talk, as long as it’s true, would achieve its desired effect. To be honest, any time I’ve talked trash, true or not, it didn’t get me what I was trying to get (just the low opinion of others).

So what’s going on? Why the sudden interest (at least from Fast Company) in brash-talking CEOs? My guess is that some of them are getting away with it. If it’s “working” though, the reason why it’s working is because they’re doing something else. It is interesting though that there is a component of telling the truth here; perhaps customers are responding to hearing someone tell the truth. But is that the cause for more market share? That is, has anyone ever told the truth and lost market share?

So the real reason why these companies are reaching success is because they did or are providing a valuable service to their customers. My sister switched us because T-mobile convinced her in the long run it would be cheaper. So we’ll see if Mr. Legere’s “brash talk” continues to lead to T-mobile to success, or if–I’m predicting–Mr. Legere gets himself into trouble with his brash talk some time in the future and starts to take a different tact.

Thoughts?

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