Business culture Customer relationships Entrepreneurs Management

Predictions, models, tramps, & thieves

I know, you weren’t expecting a reference to Sonny & Cher.

Technical people (programmers, doctors, scientists and the like) aren’t typically considered to be good communicators to the public at large. Good communicators like Bill Nye and Neil DeGrasse Tyson stand out because they’re adept at explaining very technical subjects in a way that’s understandable to everyone. Sure, they have time to prepare, but that doesn’t guarantee content everyone else can understand.

This is one reason why we’re so frustrated with the inaccuracy of “predictions” about things like weather, fantasy football player performance, stock market behavior, hurricane tracks, asteroid paths, and COVID impacts.

How many science-y people in these roles are saying something like… “This is a model. This is how models work. A model is not a promise. It is a set of results from a bunch of calculations based on the data we have today – and the data we don’t have yet. When the data changes, the results coming from the models will change.

The lack of this kind of communication causes modeling to be devalued by everyone else.

What you don’t know

Data changes rapidly – weekly, daily, hourly. Some of today’s data could be inaccurate. We may not know that until tomorrow’s data arrives, or a sensor fails.

Consider hurricanes. Hurricane models “predict” their path & severity. The output changes as variables are added /changed / deleted, and as varialbe importance changes. As the hurricane gets closer to shore (or as the time to make your third round draft pick nears), models become more accurate because there are fewer variables, & the possible range of still-useful variables shrinks.

What don’t we know?

When Donald Rumsfeld was Secretary of Defense, he was asked about then-recent discoveries about WMDs in Iraq. The questions were legitimate as was his answer, though he was mocked for it at the time.

“Reports that say that something hasn’t happened are always interesting to me, because as we know, there are known knowns; there are things we know we know. We also know there are known unknowns; that is to say we know there are some things we do not know. But there are also unknown unknowns—the ones we don’t know we don’t know. And if one looks throughout the history of our country and other free countries, it is the latter category that tend to be the difficult ones.”

Donald Rumsfeld (2002), speaking as U.S. Secretary of Defense

Anyone who has worked with business metrics, science, or fantasy football knows that he was right.

Despite this variability & the knowledge that tomorrow could look much different, we often have to make decisions using today’s data.

Predicting people performance

If you’re trying to predict the performance of a NFL player, it’s equally difficult. We know a player has a 44″ vertical, runs a 4.2 second 40 yard dash, and is a three year All-Star (and more), yet we still can’t accurately predict his stats for next game.

We don’t know that his mother is sick, or that a tiny injury is bothering him intermittently. We might not notice tiny performance differences that affect a game’s outcome. Perhaps only the player who covers him will notice.

After the game, the coach might tell the press that they called different plays “because he’s hurting a little bit” as a ploy to distract their next opponent. It’s Rumsfeld’s “unknown unknown” to most of us.

You don’t know when you draft a great quarterback that you’ll lose him for the season in week seven because he tripped over his own feet during practice. Likewise, if you don’t know your best salesperson’s mother has terminal cancer, you won’t know that (or how) it affects their work.

Will models help you?

How’s your team? Is anyone challenged by something that impacts them like a nagging injury? How distracted would you be in that situation? What would help you? What needs do your people have that they don’t normally have? How can you help? Can they help each other?

What aspects of your clients’ performance could be predictive? What data is indicative of their performance? What *was* indicative but has changed? What don’t you know? Have you checked in with them? How can you help? Can they help each other?

Can performance modeling help you see performance changes earlier? Can models help you make better decisions earlier?

What don’t you know?

Employees Management

Accountability starts with you

Are you holding your team members accountable for their work based on key performance indicators (KPIs), key process areas (KPAs), and/or key result areas (KRAs)?. It’s common for firms to weave these metrics into job descriptions so that each employee is clear that “hitting their numbers” is central to meeting the progress expectations of a particular role.

All the numbers are connected

If marketing hits their numbers, they’re generating at least the minimum number of leads that sales needs to maintain their monthly sales quantity. This assumes that they have sufficient advertising budget, the right people in “skill positions”, and the company’s chosen market is large enough to consistently produce those leads month in and month out (a KPI for upper management?). Sales has to hit their number using the leads marketing provided to them so that the company’s finance team can make its monthly goals. At the least, this means making payroll, paying the bills, retaining some earnings for future purchases, and hopefully generating some profit.

You need manufacturing (whatever that means for you) to hit their numbers so that the delivery promises made by the sales team (hopefully in cooperation with manufacturing) can be met so that delivery / deployment / installation dates are achieved. Customers don’t like missed deadlines, often because they’ve made their commitments to their customers based on delivery dates you promised them.

Your customer service / support team has to meet response time and ticket closure numbers so that customers aren’t waiting too long for the help they need. A customer who is dissatisfied with service and support might decide to hold your invoice for an extra week, or month. That impacts your financial team’s numbers.

If anyone misses their numbers, it can impact other teams and make it difficult (if not impossible) for them to hit their numbers. That makes for a not so awesome management meeting between team leaders. Do you have a KPI for finger pointing? Is your leadership solid enough to prevent that train wreck?

What do the numbers mean?

Avoiding that train wreck is critical to the morale and productivity of your team. Poorly chosen numbers, or numbers that don’t reflect your culture and values are eventually going to create trouble.

If your KPIs (etc) are chosen well and carefully explained to your team members, they will reflect the desired output and behavior of your team members. Collectively, the numbers reflect a team effort to achieve suitable progress.

“Chosen well” is critical. It’s not terribly difficult to pick a number that seems to identify a desired level of performance, only to find that someone has abandoned a cultural expectation in order to hit their number.

These numbers are intended to make it easy for your team to understand the most important parts of their role and to know what level of productivity is needed to support the company’s needs – ultimately the needs of another department or team. They also need to make sense.

Quality matters

A KPI of “Make 50 sales prospecting calls a day” might seem reasonable, but does it make sense? 50 calls in an eight hour day requires making six calls per hour all day, every day (plus two more). Does your marketing team produce enough leads to satisfy this need each month? 20 business days a month means marketing has to generate 1000 new leads every month per salesperson. Alternatively, your sales team has to do their own lead generation (Do they have the tools for that? Do they know how to use them effectively?)

Averaging 6.25 calls per hour means that your sales team averages no more than nine minutes and 36 seconds learning about each prospect during each call. Time consumed by travel, meetings, prospecting, follow ups, trade shows, etc might shrink those sales calls further.

None of this speaks to quality. If hitting numbers is all that matters, 50 calls is 50 calls, no matter how qualified the lead. The quality of leads & sales calls will likely decline as the deadline approaches. The It’s tough to create a relationship and assess a prospect’s needs in under 10 minutes. Using that time on a poor lead is doubly costly.

Now imagine that you’re expected to make 100 sales calls a day, because “that’s what ‘real’ salespeople do”. What will suffer?

Unfortunate performance measurement choices can negatively impact any department. Be sure the numbers you ask your team to hit make sense holistically for the entire business. Accountability for that starts with you.

Employees Management Small Business

Employee metrics and the fantasy football parallel

My son and his friends talked me into joining their NFL fantasy league this season. A fantasy team owner “drafts” players and those players’ statistics are used to score points each week. You face off against one other team owner in the league. The owner whose players score the most points that week determines who wins. It struck me this week that gathering good employee metrics, monitoring them and taking action on the data is not unlike what you do when managing a fantasy sports team.

The last time I played a fantasy sport, the draft involved Larry Bird and Magic Johnson. It was 1986. Getting statistics for every game was laborious. You had to scour the newspaper to get the data you needed and for NBA basketball, it became a daily chore due to the volume of games. In a lot of ways, the difficulty of getting a player’s game statistics for every game for a fantasy sport 30 years ago reminds me of the difficulty of gathering the right employee metrics these days. For some data, you really have to want it.

Employee metrics should include condition

In the NFL and other professional sports, there are well-defined rules and timelines for determining whether or not a player can play, communicating their condition and deciding their availability for the next game. Scrutiny on professional sports players is very high and the data is readily available, so it’s easy to determine if a player is injured, will play this week, has the flu, is dealing with a family member’s illness or death, etc.

In your business, things are not that simple. While you’ll know about an employee family member’s death, you won’t often learn about an employee’s family drama or relative’s illness until it has progressed to a state that impacts the employee’s ability to show up at work. The impact starts well before you find out about the situation.

Sometimes it isn’t sickness. Employment situations change. Kids move back home, or go off to college, or both. Weddings, divorces, financial and legal struggles and other things can put stress on an employee, even if those things aren’t their life changes. When these things happen to an employee’s child, parent or sibling, they can affect work performance, whether they like it or not.

In the NFL, a player has to go through the concussion protocol after “getting their bell rung“. They must be cleared to play football by someone who is not associated with the team. While it’s mostly about caring for the player’s condition and their future health, it also has a big impact on the team. In the old days, a player could brush aside such concerns and play anyway. Sometimes this helped the team, sometimes not.

Your employees have the same types of issues. Who is monitoring their condition? Are the people you have “on the field” in optimal condition for the task? These things are a form of metrics, but they’re difficult to gather / measure. What would help them return to their normal performance level or better?

Typical business metrics say a lot of about day to day performance, but don’t lose sight of more personal “metrics” that can affect employee performance.

Who’s the opponent?

In a NFL fantasy league, who you “play” that week is very much determined on which team they are playing. The quality of the opponent is everything. The best quarterback in the league isn’t likely to have a huge game against the best defense in the league. To score higher, you might shift to a quarterback who’s playing against a poor defense this week.

In your shop or office, the opponent may be a work task, the sales prospect, or that meeting with partners. While you probably don’t think of them as opponents, the same ideas apply. Given the situation, task, and people involved, do you have the best available players on the field? In other words, are the right people involved?

What’s the history with those people, tasks, and situations? Does that impact who you assign to the job? Pro teams practice against an opponent’s “look” the week before they play that opponent. How do you test your team in advance of the real thing?

Metrics are situational, behavioral and yes, hard numbers too.

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Avoid the temptation

A couple of days ago, I was pretty forward with you guys about your responsibilities as both employees and employers.

It’s easy to assume that one will regularly take advantage of the other – even in the current tight job market. It doesn’t make any sense, but it’s been going on forever so my guess is that it’ll continue.

Even the current education reform arguments are full of us vs. them employee/employer tension and rhetoric. You, of course, can put an end to it if you like.

The current employment/economy situation in general reminds me of a story General Schwartzkopf tells about the First Gulf War.

Quoting Schwartzkopf:

“…You can look at the number of tanks, you can look at the number of airplanes, you can look at all these factors of military might and put them together. But unless the soldier on the ground, or the airman in the air, has the will to win and the strength of character to go into battle, believes his cause is just, and has the support of his country, all the rest of that stuff is irrelevant.”

Employers face an identical issue, as did the commander of the once-feared Iraqi Republican Guard.

You can buy the best tools, have the best location, the best products and services, provide what you think is the best value, BUT as the General says: “…all that stuff is irrelevant.”

You’d better also have the best staff. Best trained, best attitude and so on.

That goes for you too, since being the best in your market includes all those things, as well as paying a decent wage, continually training the people you have and providing the tools they need to succeed – and not looking at them with that “Hey, the job market stinks so I can pay you less, replace you in a heartbeat, work you more and treat you not quite as nice as I usually might” kind of attitude.

Because as Schwartzkopf says…the soldier on the ground might be the best and have the best to work with, but they can make your business irrelevant.

They’re on the front lines every day. They’re the ones answering the phones and greeting your customers. They’re the ones you expect to smile whether you’re standing there or not.

That teenager working her first job deserves at least as much consideration, training and attention as an employee as the “best” full-timer you have because she can run off your best customer in a heartbeat.

How’s that training expense seem now? Tiny, I’ll bet.

Treat your people like your most valuable investment – because that’s exactly what they are.

Employees have a similar burden

Sure, the job market is tight so you obviously want to deliver as much value as you can – that much is obvious.

Little things make a big difference.

Do you show up on time? If something happens and you’re going to be late, do you call? Do you arrive ready to kick some butt? Do you show up looking the part? Nails clean? Yeah, little stuff like that.

You might think that owner of yours is a rotten old cuss who is getting rich off your back. While that might be true (and I’ve suggested you create your own economy via your own small business as a way to cure yourself of that problem), it’s also true that the rotten old cuss has and continues to take risks and invest their money to create and sustain the business that pays you.

If you make $30k and have just 3 fellow employees, consider what has to happen for your checks to clear each week. At the very least, they’ve got to take in at least $3000 a week just to make your checks clear (and set aside money for their part of payroll taxes).

Zig Ziglar once said that you should consider yourself self-employed whether you have a job or not. Do the job as if you owned the place, because it reflects on you.

You never know if that customer in front of you will someday be your boss, or better – your best customer (of your own business) or even the one who suggests to the person who owns your business that they’d be nuts not to promote you and give you a raise because of the amazing job you did for them.

You’re the one who makes your boss’ business more competitive on the ground level – and that’s what makes sure it’s there to pay you tomorrow.

Business culture Competition Customer relationships Customer service Improvement Leadership Management quality service Small Business Strategy The Slight Edge

Take good care of the canary

Creative Commons License photo credit: matticgn

Yesterday, we talked about David Lee Roth’s M&Ms trick and how it acted somewhat like a canary in the coal mine.

It probably looked like a silly “diva clause” to everyone but Roth. A little, unimportant detail.

These little details that your competitors ignore or see as unimportant might be the one thing that customers view as an indicator of additional, more serious problems.

They’ll stick out even more when you take care of them, as if you pointed a laser beam at the very things they never wanted anyone to notice.

Don’t let those little things undermine your customer relationships. Use them.

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On obscene profits and the joy of being average

Yesterday’s Eagle Court reminded me of the last few moments of this short 2 minute video guest post from Tom Peters.

Note for those who might cringe at, be disgusted by or even “hate” the thought of a company earning the “obscene profits” extols: Mr Peters is a Democrat who spoke on the Obama campaign trail in 2008.

Can you imagine watching the heads of 2 political parties would have discussing that? Irony is beautiful sometimes.

My amusement aside, I urge you to take the video deadly serious: Get rid of the “average” stuff/processes/people in your business (or improve them).

Do it with enthusiasm and without prejudice.

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15 seconds: The difference between so-so and …

Creative Commons License photo credit: maessive

Today is about setting expectations.

When you go into a doctor’s office, most people figure they’ll wait 10-15 minutes whether it makes any sense or not.

If that doctor’s office happens to be an OBGYN, you can reasonably expect that it might be 10 minutes or 3 hours, which goes with the OB part of the territory.

The leg, again

So yesterday, I went back to the doc to get that spider bite thing looked at (again, I’ll spare you the photos). After waiting 10-15 minutes to get the standard temp/bp and probing questions, I somehow managed to find a way to wait for 30 minutes before seeing a doc.

Finally, I couldn’t stand it anymore, I had to poke my head out and ask where ye old doc was.

Why, he’s right outside my door, finishing up some paperwork from the prior client. He looks up, smiles and says “Sorry, had a little crisis, but I’ll be in to see you in just a moment.”

Had Blood Pressure Boy (sorry, don’t recall his name) stuck his head in the door and said “hey, we’ve got a little crisis down the hall, it might be 20-30 minutes before the doc can see you”, expectations are set and reasonably so. I’d sit there and watch “History of the electric light bulb” on the History Channel and be all mellow and such.

Silence, on the other hand, just has me sitting there stewing as I stare at a swollen, red leg wondering if everyone went out for happy hour or over to Costco to taste a few samples.

15 seconds: the time it would have taken for someone to poke their head in and set expectations.

Power to the people

Over the weekend, we had a bunch of wind push over a tree onto the power poles just down the road. 1 pole got creamed, which put tension on the one in front of my drive. It ended up badly cracked. 6 hours without power.

When telephone poles get creamed by falling trees on my road, I expect the power to go out…just not randomly for 3 to 6 hours each day for 4 days.

Yesterday, I walked out to see if they were going to change both poles that day (not sure) and they volunteered that the power would be out for several hours in the afternoon. That allowed me to schedule around the power situation without a loss of time, productivity and so on.

Today, they showed up again. One of the trucks is parked on the road in front of my place.

It might have taken 2 minutes to walk down the drive, knock on the door and say “hey, we’re taking the power down in about 10 minutes and it’ll be down for several hours”.

But that didn’t happen.

Mid-morning, the power went out without warning.

Now, I knew that it was going to go out sometime during the day,  but not when. The effort to share that tidbit would have saved me no time (due to short-term UPS batteries protecting my gear), but it would have let me prepare my schedule around it.

The slight edge, again

It’s not a huge deal, but it’s one of those slight edge things that great businesses do for their customers.

  • “Hey, we’ve got a crisis in room 11. It might be 30 minutes before the doc can see you. Would you like a cup of water or something?”
  • “Hey, we’re cutting the power in 10 minutes and it’ll be down for several hours, just a heads up in case you need to shut down computers or something.”
  • “Hey, it’ll be 2 weeks before I can get to your mower, will you need it before then? If so, stop by and I’ll give you a loaner.”
  • “Hey, there’s a rebate on that item, better take this form with you. May as well save a few bucks where you can.”
  • “Did you know that our clients who sell this item sell 20% more if they present it this way? Might give it a try if you can.”

You get the idea.

Expectations can change in a mere 15 seconds. So can your entire relationship with a client.

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Measurement, competition and the right person for the job

Everyone just loves performance evaluations.

Employees tend to dread them because they’re often a useless exercise of “well, you’re doing ok, here’s your 2% raise, see you in 6 months or a year or whatever”.

Sometimes you’ll hear that you need to improve something, but more often than not you’ll hear nothing specific that you can really bear down on. Back to the treadmill you go, cubicle boy.

While there are exceptions in high-quality (and sometimes, high-pressure) organizations, salespeople with easy-to-measure performance metrics (deals, revenue, etc) often get little in the way of feedback other than a Zig Ziglar book tossed in their direction.

Don’t get me wrong, that’s not a bad thing and it’ll likely help – but it isn’t detailed, high-quality feedback that helps you improve your performance. Quotas aren’t feedback and neither is a serving of Zig, no matter how tasty a morsel of brain food it might be.

Self-employed folks like me get evaluations in a slightly different way: in the form of testimonials or by not having our calls returned, or by something somewhere in between. Not unlike an employee performance review – you almost always know why and to expect what you got.

Don’t be the majority

The majority of folks just don’t get a lot of guidance on what they need to do and specifically how to get there.

Some companies are better at this than others, but most just don’t seem to focus on it. Big mistake, because without specifics, you don’t know much.

You don’t know for sure who the best is, unless you consult your “Seat of the pants” meter – and we all know how accurate that is.

You might think you know because Joe talks about what he does more than Mary or Jerry, but it might turn out that Stefan (who you never see) is really the one putting out the programming that has the fewest bugs, the pottery that has lowest return rate, the timber framing that requires the least amount of shim, the websites that produce the best sales, the brochures that generate the most calls, or whatever.

All of these things are measurable.

If your business isn’t one of the ones I mentioned, there’s something that your employees do that can be measured – and thus, managed (yes, a Druckerism).

You already know what to measure. But you might not be doing it, and you likely aren’t doing it by employee, much less breaking it down by time of day, days since the last day off, days since first leaving for a sick day and so on.

Real world

Let’s make it a little bit harder by making the job a little bit harder to measure.

Imagine that you’re trying to do this measurement at an architecture firm. There’s a lot of highly-subjective work going on there. Seems like it would be hard to measure.

Who makes the best designs? And what does “best” really mean?

Sells the best? Uses the least amount of resources? Burns the least energy when compared to similarly purposed structures?

You have to decide what “best” is because until you do, best is a gut feel.

That’s a terrible way to assess performance, particularly of complex tasks like architecture, engineering and programming, but it isn’t any more attractive for less-complex roles.

Knowing your staff. REALLY knowing them

Without performance measurement of this nature, you might not have an idea who is more productive with high quality work when single family homes vs. commercial structures.

You might not know who does crappy work when they take 1 sick day and hits their normal quality level when they take 2 days. If they happen to perform critical path, possibly life-threatening work on that second day, wouldn’t you want to know?

The really cool thing is that it can completely alter your company’s future by vastly improving the one thing that lots of folks mess up, or at least, don’t do a very good job of.


Every manager has a bad hire story, maybe two.

Trouble is, that’s the part of the iceberg that’s above the water. Avoiding that hire or giving HR and management more tools to make a better hire are what you really need.

Measurement to the rescue.

Aych Arr

Using this same measurement data, your hiring can change – if you want it to.

For example, instead of hiring someone who knows how to competently design 437 different structures (in generic terms, a civil or mechanical engineer), you may just need to find the master of all composite wood beam designs because that’s the weak spot on your team.

You know this because… your measurement data says so.

Even if your composite wood beam expert just retired, you can still look at your measurement data to see which parts of their job should be given to existing staff and what specialties across the entire staff are your company’s weakness.

Either way, you hire for strength in the skills your data indicate – remember, the data illustrates what your existing staff do best.

IT managers and software execs: Imagine if your favorite programming environment could do this. What could you get from a tool that measured development at this level of granularity?

What if you knew who performs task A faster than everyone else, but stinks at performing task B, but you never really figure this out because each person does their own project from beginning to end.

Get to the point, will ya?

You have all this data. As a result, you have better people who are creating better work. If you bid jobs, your performance data will help you produce better bids (we talked about that last week).

And why exactly aren’t you measuring performance?

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3 guarantees that will grow your business

One of the places where you don’t see a lot of creativity in is guarantees. Yet they are one of the least expensive ways to market your products and service.

In a world where it sometimes seems that there are only two guarantees (that death and taxes thing), it’s a great way to stand way out in front of the dont-get-its in your market.

A guarantee serves one purpose to the client: it eliminates the risk that holds a buyer back just before they purchase. The expense of providing an incredible guarantee is extremely cost effective. Yeah, cheap.

Why? Because a small minority of people will use them – and more importantly, if you are really doing your job – they’ll rarely be used.

Your goal: To perform so consistently that your guarantee rarely gets used.

Not getting used is the real focus of a guarantee, but you may not be thinking of the reason why: it’s a great motivator to get your business to reach the levels of performance that you want to attain.

No good customer really wants to use your guarantee. It simply serves to protect them in case your service and products don’t match what you promised. 

So here are 3 guarantee ideas to use as seeds for your new guarantee:

Guarantee #1: For big ticket items (a fridge, furniture, and similar), guarantee that delivery will be on time, within a 1 hour window, or their delivery is free (assuming it isn’t already) plus you’ll buy the customer dinner for 2 at a nice local restaurant as an apology.

Result: Forces you to organize and streamline your delivery scheduling and execution. Tells the customer that they aren’t going to get that “sometime between 8 am and 5 pm on Tuesday” delivery promise.

How you turn it into more than a guarantee: Talk the local restaurant into co-oping the dinner expense. They want customers. They can get 2 dinner customers one time, split the cost of the dinner with you, and if they do things right – they have customers for life. You save a little money, the restaurant gets 2 new customers. Win-win.

Guarantee #2: The big audacious one year money back guarantee on something that no one else guarantees for a year. Yeah, I know. That little guy sitting on the left shoulder. He says they’ll never return it in a year, so what’s the point.

The point is that they can return it for a year, not that they will. It doesn’t matter that 98% of those asking for a refund will do so within 30 days. 

Result: More sales due to less risk. This guarantee is particularly effective on products and services that are normally guaranteed for 30 days but might see the bulk of their return for 60. If you raise yours to 60 days, your competitor would probably follow suit. If you raise it to a year, they’ll think you’re nuts and they’ll never realize what happened

Guarantee #3: Guarantee the intangible thing that no one else will: Peace of mind. “If you don’t feel that our product has made your family/life/business more comfortable, more pleasant, more successful and less hassle-filled, we want it back.” Your wording will probably need to be different than that, but that should  get the idea across.

Result: Forces you to remember what you are really selling. You aren’t selling a will or estate planning, you’re selling peace of mind, knowing your clients’ kids will be . You aren’t selling tax preparation services, you’re selling peace of mind, knowing that the IRS isn’t going to catch you goofing up your return because a real pro prepared it. Remember Michelin and the baby. They aren’t selling tires. They’re selling safety for that family and their baby. The sooner you remember that, the better off your business will be.

I’m curious to hear from you about this: What’s the best guarantee you’ve seen? Why did it motivate you to trust and buy from whoever offered it?