Trizle

For all you marketing freaks, who love figures, here's the update on search engine market share. Thanks to the wonderful people at Nielsen for the study. Search Engine Market Share: Google Search: 48.2% Yahoo! Search: 22.2% MSN Search: 12.8% Online Searches: 5,699,528,000 (January 2006) (Now, you can tell the significance of having a search-engine-friendly website.) For an in-depth review of search engine market share figures, see: http://www.nielsen-netratings.com/pr/pr_060302.pdf.

Usually, in business meetings, we seek a consensus before we make decisions. There's one major problem with this: We tend to suffer from a psychological phenomenon known as "group-think." Says Jonathan Hughes and Jeff Weiss from Harvard's Business Review: "The quest for harmony and common goals can actually obstruct teamwork. Managers get truly effective collaboration only when they realize that conflict is natural and necessary." That's why, sometimes, it's better to designate a devil's advocate to break up the harmony. That way, you can divulge what your people really think.

"I was told I would never make it because I'm too short. Well, I'm still too short, but I've got 10 All-Star games, two World Series championships, and I'm a very happy and contented guy. It doesn't matter what your height is, it's what's in your heart." -Kirby Puckett (1960-2006)

The best Wall-Street-er is nothing but the typical "Wall-Steet-er." If there's one guru you'd like to follow, make it The Oracle of Omaha. He amazes us every year, and is a true inspiration. What every business needs, from Buffett's latest gem: Humility: "The hard fact is that I have cost you a lot of money by not moving immediately to close down Gen Re's trading operation. Both Charlie and I knew at the time of the Gen Re purchase that it was a problem and told its management that we wanted to exit the business. It was my responsibility to make sure that happened. Rather than address the situation head on, however, I wasted several years while we attempted to sell the operation." Purpose-driven: "Every day, in countless ways, the competitive position of each of our businesses grows either weaker or stronger. If we are delighting customers, eliminating unnecessary costs and improving our products and services, we gain strength. But if we treat customers with indifference or tolerate bloat, our businesses will wither. On a daily basis, the effects of our actions are imperceptible; cumulatively, though, their consequences are enormous." Pay according to performance: "Too often, executive compensation in the U.S. is ridiculously out of line with performance. That won't change, moreover, because the deck is stacked against investors when it comes to the CEO's pay. The upshot is that a mediocre-or-worse CEO -- aided by his handpicked VP of human relations and a consultant from the ever-accommodating firm of Ratchet, Ratchet and Bingo -- all too often receives gobs of money from an ill-designed compensation arrangement." Forget Wall Street: "Expect no miracles from our equity portfolio. Though we own major interests in a number of strong, highly-profitable businesses, they are not selling at anything like bargain prices."

The Docs (pdfs)

Warren Buffet's: Annual Letters, including his latest Read it. Love it. Pursue it. Evangelize it.

Here's the common theme of most corporate blogs: "So this is what we did today. Blah. Blah. Oh, and we talked to so and so about us and me. Blah, blah, blah. Blah." Sadly, people don't care about these companies. People care about their own lives, and what those companies can do for them. In our little world where most of us are more concerned about our flat-right-tire than a tsunami that's wiping out villages thousands of miles away (an unfortunate, psychological reality), we yearn for the "me" factor. What can you do for me? What can you provide me? How can you affect me? Cater to your reader's emotions. Connect with them. Here's a hint: Use "you," a lot. A lot. If you're not providing personal value, they'll go elsewhere. And even worse, they'll take their posse with them. Word to your mother.

Earlier, we taught you to Flashperiment, our corny coined term for "experimenting quickly." We didn't quite tell you the boundaries you should use when flasperimenting, so we'll do it here. Flashperiment only within these three boundaries:

1. where you excel
2. where you're passionate
3. where it could earn you money.

That's it. It's similar to Researcher Jim Collins's Hedgehog Concept. In other words, you're given a framework. Within that framework, you're granted all the freedom you need to flashperiment. It's like playing a game of basketball. The baselines and regulations structure your boundaries. What you do within that is up to you. Enjoy!

In our last entry, we talked about why traditional corporate business strategy doesn't work. Here, we'll tell you what does work. Here's the secret Rotisserie sauce, and the best strategy you'll ever use: Experiment, experiment, experiment, and oh, exp-er-i-ment! We call it Flashperiment. Our coined word is corny, yes. Sexy, yes. But, it works. The more experiments you cram within a given day, the higher your success rate. "The real measure of success is the number of experiments that can be crowded into 24 hours." -- Thomas Edison You'll have to accept failure as a means to accelerating your organization. Simply put, if you're not failing, you're not trying hard enough. How does Wall Street's most innovative organization approach strategy? Google Product Manager Marissa Mayer encourages experimenting at a quick pace: "In fact, during the brainstorming phase, we tried out about five times as many key features -- many of which we discarded after a week of prototyping. Since only 1 in every 5 to 10 ideas work out, the strategy of constraining how quickly ideas must be proven allows us try out more ideas faster, increasing our odds of success." The company, to the chagrin of most traditional business professors, doesn't rely on corporate strategy. Likewise the philosophy echos at America's most innovative organizations: Starbucks, 3M, Idealab, and P&G. Instead, they use flashperiment. Flashperiment! [Editor's Addenum: Learn How to Flashperiment]

Corporate strategy is overrated. Marketing plans? Useless. Business plans: well, they suck. William Hewlett and David Packard didn't need one. Sam Walton didn't have one. And Walt Disney. Michael Dell. Steve Jobs. Thomas Edison. And Henry Ford. And senior executives at 156 of today's most influential companies worldwide. Take that, corporate planning "strategists" (and yes, we use the term lightly). Planning, while having good intentions, doesn't work. Humans thrive when adapting to the current situation. Yes, you can plan now; but, it'll be useless: you won't know with clear certainty what'll happen in 5-50-5000 days. If you don't change when needed, you're destined for Bode-Miller-like-catastrophe.

It's in the research.

The Economist Intelligence Unit and Marakon Associates asked 156 senior executives from $1 billion companies (40% of them having more than $10 billion in sales) how decision planning affected effective business decisions. Sadly, it didn't. And even sadder: it caused more harm. Said the study: "The results of the survey confirmed what we have observed over many years of consulting: The timing and structure of strategic planning are obstacles to good decision making." Message to the MBA-trained pseudo-executives (and no, not all of you: most of you): Quit the business planning hoopla. It doesn't work. It consumes valued time. And it takes your focus off what you should be doing: Doing! We'll go more into depth in our next entry. Stay tuned, amigos. [Editor's note: Here's the article. Enjoy!]

It might not be what you'd think. Thomas Edison's greatest invention wasn't the phonograph, the dictaphone, or even the incandescent light bulb. It was his innovation factory, that later became General Electric, that gave rise to these discoveries. Likewise, Sergey Brin's and Larry Page's best invention wasn't Google's search engine. It was the factory they built that encouraged a stream of discoveries such as Google News, Google Maps, and AdWords, to happen. The transistor and the laser didn't exist because of an individual. It existed because of an organization called Bell Labs. Santa Fe Institute's Geoffrey West points out: "Looking at the great paradigm-shifting innovations that came out of American industry after World War II, things like the transistor and the laser, you realize that the driving force that gave rise to them was the enormously free innovation environment that places like Bell Labs fostered." If you're looking to find the next billion dollar idea, build an organization that fosters innovation.

Like most of us, you probably tend to overvalue advice if you're unsure about a problem. Yet, when you think you're sure about a problem, you tend to discount other people's advice.

Here's the problem with that.

If you're stuck in a complex situation, you'll probably ask Fred for his opinions. Now, if he's right, you're in the money. Yet, when he's wrong, you could suffer severe consequences depending on the situation. For these complex situations, it's better to stay cautious of advice given; they could just be BSing you. Now, let's look at the other side. Now you're in a sitation that presents itself as something simple you could handle. Like most of us, you'd probably listen to any advice given, but you won't take it to heart. In these sitations, be aware that the other person might just know something you do not know.

It's in the research.

Harvard Business Professor Francesca Gino studied our biases on receiving advice: "In our experiments, subjects were asked to guess the weight of people in various pictures, some of which were in focus (making guessing easier) and some of which were blurred (complicating the guesswork). For each picture, subjects guessed twice: the first time without advice and the second time with input from another, randomly chosen participant. "When the pictures were in focus, we found, subjects tended to discount the advice; apparently, they were confident in their ability to guess correctly. When the pictures were blurry, subjects leaned heavily on the advice of others and seemed less sure about their initial opinion. "Because they misjudged the value of the advice they received -- consistently overvaluing or undervaluing it depending on the difficulty of the problem -- our subjects made suboptimal guesses overall. They would have done better if they'd considered the advice equally, and to a moderate degree, on both hard and easy tasks."

Take all advice equally

Francesca Gino sums it up simply: "When you think the solution to a problem is simple, and you find yourself waving off advice givers, think again. You may know a lot about the problem, but that doesn't mean you won't benefit from the opinions of others who know a lot, too."