Thursday, September 21, 2017

Selling the Problem vs. Selling the Solution

Entrepreneur and investor Dave Bailey has written an outstanding column for Medium.   Bailey addresses the importance of focusing as an entrepreneur on the problem you are trying to solve.   He argues that startups often become enamored with their solution or their technology in particular, but they don't explain adequately the customer need that they are addressing.  What pain point are you alleviating?  What problem are you solving for the user?   How will take away a roadblock, inefficiency, or frustration that users are experiencing?   Bailey explains:

As Steve Jobs said: you have to start with the customer experience and work backwards to the technology. Jobs understood that when you try to reverse-engineer the need statement from the product, it’s too easy to lose touch with reality.

After 6 months of intense product development — this happened to me. My product was my baby and I wanted to talk about with everybody.  When I didn’t lead with the need, it was often greeted with confused looks. I was giving people the ‘answer’ without telling them the question — like a weird game of ‘Jeopardy’.

Even when I did start with the need, I only afforded it a sentence or two. I’d describe the need to perfectly frame my product. In other words, I did the exact opposite to Steve Jobs. At when the confused looks continued, I got defensive. ‘Trust me, it’s a problem — ok?

Bailey recommends writing a customer need narrative.  He argues that it's more than one sentence.  It's a clear and compelling paragraph that "outlines a thesis on how to make peoples’ lives better."  Certainly, many entrepreneurs fall in love with their idea.  They get excited about the technological innovation.   Unfortunately, many forget that the product is simply a means to an end.  Keep the end in sight, with the end being a better experience for the user.   Sell your problem first, not your idea.  

Wednesday, September 20, 2017

Herb Kelleher on Market Share

Entrepreneur Joel Gascoigne tweeted a quote from Southwest Airlines co-founder Herb Kelleher yesterday. The quote describes Kelleher's views on the pursuit of market share vs. profitability. I think he's hit the nail right on the head.



Tuesday, September 19, 2017

The Dark Side of Board of Director Mentoring Relationships

Joann Lublin wrote a Wall Street Journal article this week titled, "Boards Try Buddy System to Get Newcomers Up to Speed."   Lublin describes how some boards have assigned mentors to new directors, so that experienced board members can help newcomers assimilate to the culture of the group.   Lublin offers the example of Carol Martz mentoring new director Amy Chang at Cisco Systems.  She explains, 

More boards are pairing new members like Ms. Chang with seasoned mentors like Ms. Bartz as they scramble to improve their oversight of management in the face of intensified investor scrutiny. Board buddies can help newcomers figure out the boardroom’s cultural norms, power brokers—and even the right place to sit.  Mentors make sure “you don’t come in as a bull in a china shop,” observes Steven R. Walker, managing director of the board services group at the National Association of Corporate Directors.

I certainly understand the importance of helping new directors learn the ropes when joining a board.  These mentoring relationships certainly appear to have a good intent.  However, I do have some worries about such systems.  What if the mentors provide the wrong message?  What if they encourage newcomers to refrain from challenging the status quo, expressing dissent, or asking the tough questions.  In the article, Martz acutally encourages Chang not to apologize for asking a challenging question.  However, some directors might provide very different advice.  They might promote norms that include conflict avoidance and deference to management.   Long-time directors might protect the harmony of the group, and in doing, send a signal that speaking up is not welcome.  Rocking the boat might not be the right strategy during your first board meeting. However, discouraging people from ever rocking the boat might also be a very dysfunctional dimension of some of these mentoring conversations.  

Monday, September 18, 2017

Curiosity Affects the Brain, Enhances Learning

Several years ago, Daisy Yuhas wrote an interesting article about new neuroscience research regarding curiosity and leanring. I came across the article today, and I thought it was worth sharing the key lessons. Yuhas explains the findings from a study about how intellectual curiosity affects the brain and shapes learning.


Neuroscientist Charan Ranganath and his fellow researchers asked 19 participants to review more than 100 questions, rating each in terms of how curious they were about the answer. Next, each subject revisited 112 of the questions—half of which strongly intrigued them whereas the rest they found uninteresting—while the researchers scanned their brain activity using functional magnetic resonance imaging (fMRI).

During the scanning session participants would view a question then wait 14 seconds and view a photograph of a face totally unrelated to the trivia before seeing the answer. Afterward the researchers tested participants to see how well they could recall and retain both the trivia answers and the faces they had seen.

Ranganath and his colleagues discovered that greater interest in a question would predict not only better memory for the answer but also for the unrelated face that had preceded it. A follow-up test one day later found the same results—people could better remember a face if it had been preceded by an intriguing question. Somehow curiosity could prepare the brain for learning and long-term memory more broadly.


To me personally, the implications are quite profound.  As a professor, I should strive to tap into and stimulate a person's intellectual curiosity about a particular subject.  If I can do that successfully, they may learn more effectively.   Similarly, we can leverage these findings as we think about how we train workers in our organizations.  If workers approach a new task with curiosity, then perhaps they will learn the required skills more effectively.   

Wednesday, September 13, 2017

Scott Galloway's "Amazon Clinic"

For those intrigued by my post yesterday regarding Amazon and possible future acquisition targets, you should take a look at NYU Professor Scott Galloway's talk titled "Amazon Clinic."  He presents some fascinating and startling data on the state of retail in the United States, including the dramatic overbuilding of malls in past decades and the steep decline in foot traffic over the past few years.  

Bryant Alumni Reception in Minneapolis

Several days prior to running the Twin Cities Marathon, I'll be hosting a reception for Bryant alumni in Minneapolis along with Robin Warde, Director of Alumni Engagement at Bryant.  The event will take place at 4 Bells in Minneapolis on Thursday, September 28th.  Hope to see many alumni, including former students, at this event.  For more information, click here.  

Andrew Curtis Podcast

If you are interested, Andrew Curtis interviewed me for a recent episode of his podcast.  You can access it via iTunes here.

Tuesday, September 12, 2017

Will Amazon Buy Nordstrom Next?

Back on May 11th, NYU Professor Scott Galloway appeared on Kara Swisher's Recode Decode podcast. During that conversation, he predicted that Amazon would acquire Whole Foods. One month later, Jeff Bezos made his move. Amazon purchased the organic supermarket retailer for $14 billion. Yesterday, Professor Galloway appeared on Swisher's podcast again. This time, he predicted that luxury retailer Nordstrom might be Amazon's next big acquisition target. He explained, "It would be cheap, it’s in Seattle, they’re operationally very sound, it’s a great company and they’re [Amazon is] trying to establish relationships with high-end brands, which they have been unable to do. Nordstrom has those and a lot of credibility, and a lot of wealthy households have a Nordstrom credit card."

Like many brick and mortar retailers, Nordstrom has experienced a sales slowdown as mall traffic has declined. In fact, news reports in June indicated that the Nordstrom family was considering taking the company private. Earlier this week, the company announced that it was opening a test store next month called Nordstrom Local. The Wall Street Journal explained the concept: 

Nordstrom Local, scheduled to open Oct. 3 in West Hollywood, Calif., will span 3,000 square feet, far less than the 140,000 square feet of one of Nordstrom’s standard department stores. It will contain eight dressing rooms, where shoppers can try on clothes and accessories, though the store won’t stock them. Instead, personal stylists will retrieve goods from nine Nordstrom locations in Los Angeles, or through its website. The stylists can also pull together looks for shoppers through a “style board” app.

Is this acquisition a real possibility? I can certainly see Professor Galloway's logic. However, as he notes in the podcast, the company is led by the Nordstrom family. Indeed, the firm's ownership structure could be a formidable obstacle. The Nordstrom family owns roughly 1/3 of the company, and family members continue to lead the retailer. Amazon would find it very difficult to acquire the company without the family's consent. However, Galloway's comments do make you wonder whether other retailers might be acquisition targets. As Amazon contemplates opening a second headquarters with up to potentially 50,000 employees, it's clear that Bezos' ambitions know no limits. Could a luxury apparel retailer be next? Nieman Marcus, anyone? They have been struggling. They announced an exploration of strategic alternatives several months ago. Perhaps they might be a target. They are not as operationally sound as Nordstrom's, and they have considerably more debt, but perhaps it's a more attainable target.

Monday, September 11, 2017

Three Ways Leaders Can Build Trust

I was asked a very important question today during a presentation to a group of senior finance executives from a wide array of Fortune 500 companies.   One person asked, "How does a leader build trust?  What are the most important and effective ways to do so?"  I offered three suggestions. 

1.  Acknowledge your own mistakes.  Be transparent about those situations in which you stumbled, and talk about how you learned from those incidents.  They will come to trust you and be willing to come forward to talk about their concerns and failures if you acknowledge ways in which you struggled during your career.  

2.  Avoid engaging in the charade of consultation (a phrase coined by my friend and best-selling author Michael Watkins).   In other words, if you have already made up your mind about a decision, don't engage the team in a lengthy analysis and dialogue, all the while steering them to your preordained decision. You're wasting their time and insulting their intelligence.  They recognize that the decision has already been made, and their trust in you will erode if you engage in this charade. 

3.  As Teddy Roosevelt once said, "“People don't care how much you know until they know how much you care."  In other words, they won't trust you simply because of your competence.  You have to show them that you care about them as individuals.   If they believe that, then they will trust and follow you.  

Picking the Right Job for You Based on an Interesting Interview Question

Christa Quarles, CEO of OpenTable, described her favorite job interview question recently in an interview with CNBC. She likes to ask candidates: "What part of this role do you love and you can't stop doing? And what part do you hate doing?" Quarles knows the most important facets of the role she is trying to fill. If someone loves those critical facets of the job, then Quarles feels comfortable with that candidate. In short, she wants to make sure that the candidate's passion matches the needs and demands of this particular role.

However, the second part of the question is important as well. What do you hate? As she says, everyone has certain work that is less desirable to them. Quarles goes on to ask the candidates how they will manage those aspects of the job... work that must be done, but understandably, may not be the type of activity about which the candidate is passionate. 

I'm struck by this question, because I think every job seeker should ask themselves this question during the search process. The candidate should be trying to understand the job description and the demands of the role, and they should be asking themselves if they will be excited about enough of that activity to make the work meaningful and fulfilling to them. The candidate also has to think about the negative aspects of the job and whether they can handle that work without becoming frustrated or disengaged. No one wants to work diligently to land a job that they will, for the most part, hate doing.