Doug Kreitzberg

Death by Dashboard

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Two years ago, I had all the operations in my business put together dashboards — metrics on many aspects of our business (from sales calls to retention) — that could help us understand what was working and not working before we saw the results in our P&Ls. Since then, the dashboards have been extremely helpful in focusing our attention and adding more energy and resources where needed.

But dashboards, as helpful as they might be, are no substitute for thinking broadly. Dashboards (or metrics, or formulas or whatever set of tools you have which measures your business) are constructed based on your business model, your knowledge of the model and your ability to gather data with respects to that model as it exists today. Dashboards do not discriminate between good or bad models; they simply describe it.

And what they describe are the hundreds of critical tasks that managers and employees need to pay attention to every day. These are the “Critical but not Important” tasks Stephen Covey writes about. You can’t ignore them. They need to be done. However, these tasks may not be the ones needed to deal with something unforeseen or to exploit the next new opportunity.

Most financial dashboards did not describe the financial collapse of 2008 because they were not built to describe it — it was not in their models. Likewise, many health insurance brokers are scrambling to define themselves in the new world of Health Care Reform; a world in which the old dashboards did not anticipate.

Clay Shirky writes in his blogpost “The Collapse of Complex Business Models”, that businesses begin to fail when they become too complex to deal with changing realities. I actually think it’s simpler than that. Businesses (or individuals) begin to fail when they misread the processes and metrics used to describe the success of their model for the world itself. They fail when they focus too much inward. If complexity is an issue, it’s an issue if it impedes the ability to communicate with (and receive communication from) the world outside the model. It doesn’t matter if you’re AT&T or the florist on the corner. If you’re not paying attention to how people are buying and how their buying activities are beginning to change, your business will suffer.

Don’t get me wrong. Dashboards are important; they are good at telling you whether a process is on track or not. But they can’t be confused — and they often are — as an accurate forecast tool to predict how your business overall will fare in the future. A dashboard is no substitute for strategy. Dashboards are linear, specific, measurable. The world is nonlinear, chaotic, and challenging to determine ahead of time which cause will lead to which effect.

The key is to do what is critical, but raise your eyes to look over the dashboard and really look around you. Leave time to play around with what the world tells you is important. And “play” is the operative word, because if you want to predict something which cannot be predicted, you’ll have to make up a lot of stuff (and test them out in your make-believe world) as you go along.

On the Hinge

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During last week, I took the family to the Philadelphia Museum of Art.  While the Museum has a lot of interesting work on display, I was particularly interested in one piece which I had read about in a book by Lewis Hyde, entitled Trickster Makes This World.  It is a work by Marcel Duchamp entitled “The Bride Stripped Bare by Her Bachelors”, or “The Large Glass”.  It is indeed, a large work between sheets of glass, supported by a metal border and a piece of metal which almost looks like the hinge of a window pane running through the bottom third of the piece.  In the upper panel suspends the bride, the lower contains the bachelors.

According to Hyde, Duchamp wrote that “The Bride Stripped Bare by Her Bachelors” was a “delay in glass”.  The Bride still retains an infinite number of possiblities for her life, standing on the hinge between desire and fulfillment.  Fulfillment has its advantages, to be sure, but it also has it’s drawbacks; fulfillment weds us to a choice, and choices both define and place limitations on the future.  Duchamp is not necessarily stating, “never chose”; as Hyde states, “a ‘delay’ both suspends but not suspends activity.”  The action will continue, the choice will be made.  However, Duchamp shares this moment with the viewer as if to say, “we are all brides sitting on the hinge of possibility.”  Regardless of choices we have made, or how we view ourselves — or how others view us — right now, at this moment, we still have infinite possibilities in front of us.

I find that those times I feel at my lowest is when I feel I have no choice, or that something is totally out of my control.  And yet, even during those times, if I take a moment, I do see that I have choices and there are possibilities (even if most of those possibilities simply involve changing how I feel about the situation).  When I sit, like that bride, on the hinge of possibility, eyes not filled with dreamy stars but clear and bright, my fear subsides and I make a decision with calm and confidence.

Every New Year is a time for both reflection and resolution.  Whether you are making resolutions for yourself or for your business, recognize that possibilities before you are perhaps greater than you might initially realize.  Be that bride on a hinge, stay suspended there for a moment and take wonder in the possibilities that are actually available to you.

Pepsis not Pepsi

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There is a great TED talk given by Malcolm Gladwell (link here) in which Gladwell talks about the findings of Howard Moskowitz, a psychophysicist who has made a career out of consumer preferences.

In the early 1970’s, Pepsi asked Dr. Moskowitz to determine which percentage of Aspartame it should put into Diet Pepsi to give it the right sweetness.  Dr. Moskowitz conducted a survey of consumers drinking Pepsi with anywhere from 8% to 12% Aspartame.  When the results came back inconclusive, Dr. Moskowitz was stunned: he had expected a traditional bell curve with preferences hovering around 10% or at very least a cluster of preferences hovering around a single percentage.  Instead, there was no single cluster; the data appeared random.

Dr. Moskowitz did not believe the data was random.  After considerable thought.  He hit on it.  The answer was that people did not prefer Pepsi.  They preferred Pepsis.

Moskowitz demonstrated this when he worked with Prego in the mid to late 70’s. At the time, Ragu held the dominant market share and Prego asked Moskowitz to come up with the right type of sauce to unseat its rival.  Moskowitz asked Prego’s kitchens to come up with a multitude of varieties of sauces and then conducted tests; what he found was that people did not prefer one specific sauce, but that they tended to cluster around 3 different sauce types:  plain, spicy and extra chunky.  Ragu and Prego both had plain and spicy.  Neither had extra chunky.  Moskowitz recommended Prego introduce extra chunky and all of a sudden its market share sky rocketed.  Walk down any grocery aisle of spaghetti sauces and you will most like see 30 to 40 varieties, within the same brand.

As Gladwell states, we owe Moskowitz three key ideas: 1) the importance of horizontal segmentation (we should not segment products by least complex or expensive to most complex or expensive, rather we should segment according to the variety of attributes it may possess); 2) the fact that he democratized taste, which was based on the fact that; 3) variability is key in gaining marketshare as opposed to coming up with the “perfect” product.

In one real sense, Moskowitz proved that individuals cannot be categorized into one platonic product category; rather they have different tastes, needs and desires.  As such, companies who want to gain marketshare need to consider variety and choice in their product offering.  They cannot just offer Pepsi.  They have to offer Pepsis.

This has important implications for any business.  Instead of just focusing the the “perfect”  or “cheapest”, Moskowitz/Gladewell tells us to focus on providing an array of different product flavors based upon consumer or business preferences.  If you want to maintain or grow share, you need to offer choice which gives the product selection back to the customer where it belongs.

What are you waiting for?  Pop your favorite beverage and get to it!

Three O’Clock Breeze

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I’ve spent this Memorial Day opening our place up in Montana.  It’s not a tough job and I get more than a few of hours of time enjoying the lake, learning how successful the resident loons have been in building and maintaining its nest, exploring the logging roads and being continually amazed by the views of the Swann and Mission mountain ranges in the distance.

Our place sits on the edge of a lake, tucked in a corner rarely used by water skiers and abutting a marsh from which we typically see cranes, osprey, blue heron, bald eagles and loons.  In the mornings, the lake is still, reflecting the sunrise against the tamarack and ponderosa that surround its shoreline.  However, each afternoon, typically around three pm, a breeze from the southeast picks up and surface of the lake is broken by unending waves.

My family has been coming to this lake for over sixty years. During that time, the 3 o’clock breeze has been a constant.  The nesting loons, bald eagles, osprey, blue heron and cranes have been a constant.  And it’s no small stretch to imagine that all have existed for far longer than we have been around.

In our world of increasing change, we are quick to ask, “what is the next new thing?”  We want to be on the leading edge of innovation, because, we feel, that is where success lies.  Heros are made by discovering new worlds and doing new deeds, not reliving past experiences.

I am not immune to these siren calls.  I, too, want to be able to see what’s around the corner and be there before the rest of the crowd arrives.   But, determining what innovation to pursue requires an ability to fine tune out static, to down play what’s sexy and the identify that which has the capacity to endure.  And, in order to do that, you need to have an innate sense of what remains permanent.  Because, when you come right down to it, change is nothing but a reaffirmation of certain unchanging rhythms, whether they reflect natural selection, the need for man to be a social animal, or, the desire of man to push himself beyond limits.

When you become aware of these rhythms, you then can be aware of what changes occurring around you are worth your attention.  You will also be in a better position to take advantage of that change.

I hope you have used this holiday to take a pause, to reconnect with your own 3 o’clock breezes, to be aware of the permanent so you can be in a better position to welcome the change ahead.