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Do You Underestimate The Customer’s Journey?

May 7, 2014

by:

Joe Patti

Inc Magazine recently had an article of 100 Great Questions Every Entrepreneur Should Ask. As you might imagine, there was a lot in the list that have relevance to non-profit organizations.

Some deal with topics that continually arise in conversations about the arts like relevance; allowing a pursuit of funding to divert the organization from its mission; and what metrics are being used to define success.

1 How can we become the company that would put us out of business? -Danny Meyer, CEO of Union Square Hospitality Group

2 Are we relevant? Will we be relevant five years from now? Ten? -Debra Kaye, innovation consultant and author

52. If our company went out of business tomorrow, would anyone who doesn’t get a paycheck here care? -Dan Pink

6. What trophy do we want on our mantle? – Marcy Massura, a digital marketer and brand strategist at MSL Group
Massura explains, “Not every business determines success the same way.Is growth most important to you? Profitability? Stability?”

7. Do we have bad profits? -Jonathan L. Byrnes, author and senior lecturer at MIT
Byrnes explains, “Some investments look attractive, but they also take the company’s capital and focus away from its main line of business.”

8. What counts that we are not counting? -Chip Conley, founder of Joie de Vivre Hospitality and head of global hospitality for Airbnb
Conley explains, “In any business, we measure cash flow, profitability, and a few other key metrics. But what are the tangible and intangible assets that we have no means of measuring, but that truly differentiate our business? These may be things like the company’s reputation, employee engagement, and the brand’s emotional resonance with people inside and outside the business.”

Others focus on customers/audiences.

10. Are we paying enough attention to the partners our company depends on to succeed? -Ron Adner, author and professor at Tuck School of Business
Adner explains, “Even companies that execute well themselves are vulnerable to the missteps of suppliers, distributors, and others.”

17. Which customers can’t participate in our market because they lack skills, wealth, or convenient access to existing solutions? -Clayton Christensen, author, Harvard Business School professor, and co-founder of Innosight

21. Who, on the executive team or the board, has spoken to a customer recently? -James Champy, author and management expert

32. Do we underestimate the customer’s journey? -Matt Dixon, author and executive director of research at CEB
Dixon explains, “Often, companies don’t understand the entirety of the customer’s experience and how many channels may have already failed them. They don’t understand that the customer goes to the website first, pokes around but can’t find the answer to their question, and then tries to start up a chat with an agent, only to get frustrated by the delayed response. Only then do they go to the Contact Us tab and call. From the company’s perspective, the call is square one. The customer sees it as, you’ve already wasted 15 minutes of my time.”

62. Do we say “no” to customers for no reason? -Matt Dixon
You may have created your customer policies at a time when you lacked resources, technology wasn’t up-to-snuff, or low service levels were the industry norm. Have those circumstances changed? If so, your customer policies should change to

Number 17 needs no explanation. I actually was somewhat reassured by the fact that for-profit business faced the same challenges about education/skills, access and wealth that non-profit arts organizations do.

I was drawn to #32 because it is so easy to be unaware of all the hurdles a customer faces when dealing with you.

Number 62 also strongly grabbed my attention because it emphasizes the need to constantly revisit and revise your policy. It had particular significance to me because I recently discovered that a practice I assumed was due to technical limitations was erroneous, and was in fact just a matter of history and habit. As a result, we will be selling new subscriptions two weeks earlier this year than in the past.

Number 10 I read both as not giving customers what they need to have a successful experience, but related to partners and colleagues as well. Are you paying attention to the health of businesses you depend on as well as that of other arts organizations in the community? Even if they are doing fine, could more clearly communicating your needs to them lead to a more efficient outcome for both of you? Could mutually beneficial partnerships result, strengthening both organizations?

Some of the question were focused on strengthening your company internally in terms of thinking, planning and self/employee development.

3. If energy were free, what would we do differently? -Tony Hsieh, CEO of Zappos
Hsieh explains, “This is a thought experiment to see how you would reconfigure the business if you had different resources available or knew that different resources would one day become available. Another question might be, what if storage was free? Or what if labor costs half as much or twice as much?”

9. In the past few months, what is the smallest change we have made that has had the biggest positive result? What was it about that small change that produced the large return? -Robert Cialdini, author and professor emeritus of marketing and psychology at Arizona State University

16. If no one would ever find out about my accomplishments, how would I lead differently? -Adam Grant, author and professor at Wharton

22. Did my employees make progress today? -Teresa Amabile, author and Harvard Business School professor
Amabile explains, “Forward momentum in employees’ work has the greatest positive impact on their motivation.”

37. Am I failing differently each time? -David Kelley, founder, IDEO

The last one about embracing failure is a familiar topic of discussion even in the arts community today.

These last few (though there are many like them in the article) remind business leaders to be introspective of themselves and their companies. It is easy to overlook things like the change that made the biggest impact, or even attribute the impact to something else unless you stop and think about the true source. Certainly paying attention to progress of employees is one way small changes can manifest as big impacts over the course of a few months.

Perhaps the toughest of these last handful of questions is #16 because it challenges you set aside your ego in order to be a more effective leader.

Business Models, Info You Can Use, Leadership, Management Philosophy

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The Tao of Data

May 6, 2014

by:

Joe Patti

Following a little on the theme of my post last week about being well-rounded, The Drucker Exchange recently had a post about balancing quantitative and qualitative mindsets.

Because there is such a focus on the quantitative these days with people encouraged to enter STEM fields and schools’ value being judged on the basis of test results, the arts community has been pushing back by touting the value of the arts. Though often it is in the context of these same quantitative measures: test scores, economic impact and earnings.

The Drucker Exchange post, as well as the Wall Street Journal column by Thomas Davenport that inspired it, note that like the peanut butter and chocolate of a Reese’s cup (my metaphor), quantitative and qualitative are most effective together.

Despite years of work at providing both knowledge and quantitative analysis to decision-makers, there is scant evidence that we have really improved decisions—so we have our work cut out for us.

At heart I think the historical separation of knowledge and numbers people is a “Two Culture” problem, made famous by C.P. Snow. Knowledge management people are humanities/liberal arts types, and analytics people are math/science types. We need to get them together, however. Almost all key domains of business–including customer insights, understanding the broader business and economic climate, and various approaches to performance improvement—involve both qualitative and quantitative content. The best decisions and the best organizations will make effective use of both.

In my post last week, I suggested that the scientists quoted in the Salon article felt their scientific investigations were enhance by their artistic pursuits. Peter Drucker apparently said much the same thing, but observed the same is true for someone in the humanities in relation to science.

“We will have to demand of the scientifically trained man that he again become a humanist; otherwise he will lack the knowledge and perception needed to make his science effective, indeed to make it truly scientific,” Drucker warned. “We will have to demand of the humanist that he acquire an understanding of science, or else his humanities will be irrelevant and ineffectual.”

From time to time, I also write about what value arts organizations might bring to businesses. Thomas Davenport talks about how people with the qualitative mindset can help the analytically minded tell a clearer story about their data.

Knowledge people are good at dealing with text, and some would probably be able to extend their skills into text mining and analytics. Knowledge management practitioners are also good at capturing insights, and there are many analytical assumptions and results that are never recorded. It’s also likely that some good knowledge analysts could help quants “tell a story with data,” which is something almost every organization is looking for these days.

The companies Davenport is talking about would employ such people full time so it wouldn’t be an opportunity an arts organization could do on the side. Though it certainly points to possible career opportunities for those with a liberal or fine arts background.

Something along these lines could provide a coaching/advisory opportunity on a smaller scale for arts organizations. Ultimately, thinking about how you can help a business tell the story of their data will probably help a non-profit organization do a better job telling the story of their own data on grant applications and marketing materials.

Arts organizations are probably all too close to their own data and tend to see grant reports as a chore. Helping a company in an unrelated field tell their story for an entirely different purpose could cause a shift in perspective that increases their effectiveness in talking about themselves.

Business Models, Marketing/PR, State of the Arts, Working In The Arts

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Impressive Debut (a.k.a Draft #250)

May 5, 2014

by:

Joe Patti

Seth Godin had a post today about origin stories, noting that each of the successes he cites has a different origin story. They didn’t follow the same path as someone else to achieve wide spread recognition.

That reminded me of a similar passage in one of Joseph Campbell’s books where he recalls a particular story about King Arthur and his knights setting out on their Grail Quest.

“‘They thought it would be a disgrace to go forth in a group. Each entered the forest at the point that he himself had chosen, where it was darkest, and there was no way or path.’

“No way or path! Because where there is a way or path, it is someone else’s path.”

I have actually used this quote before, but it has been about 7 years. It is far overdue to be mentioned again.

One of the toughest things about running a business of any sort is being able to balance between embracing best practices and slavishly replicating case studies in success.

Following best practices prevents you from wasting valuable time and energy developing processes and repeating the mistakes someone else has already encountered and overcome.

On the other hand, attempting to replicate someone else’s wild success by imposing their apparent development framework/pathway upon your own company will probably have the same uncomfortable, non-productive results as trying to wedge your feet into their custom built shoes.

Part of the problem is that even when the founders of the wildly successful company talk about their path to prosperity, they aren’t telling you the full story of all the dynamics at play. They may not be entirely aware of all the factors that fed into their success, or they are ignoring and omitting some details that don’t make for a good founding mythology.

In the opening segment of a This American Life episode titled, Origin Story, they discuss the “started in a garage” mythology for companies like Hewlett-Packard (whose origin Godin cites) and Apple.

Ira Glass
This is from a promotional video that Hewlett-Packard put together after it spent millions to buy and restore the original garage where its two founders started what is now the largest technology firm in the world.

Dan Heath
In 1938, in a garage in Palo Alto, California, Bill Hewlett and Dave Packard set to work to start a new company. They had a few hand-operated punches, a used Sears Roebuck drill press that had just made the trip west in the back of one of their cars, and they had a rented flat with a garage.

[…]

Ira Glass
Even Bill Hewlett and Dave Packard weren’t exactly outsiders. They studied electrical engineering at MIT and at Stanford. Packard had worked at General Electric. A former professor of theirs from Stanford gave them leads and hooked them up, for example, with a firm called Litton Engineering. He let them use equipment that they didn’t own themselves yet. Just as, decades later, the founders of Apple Computer, 21-year-old Steve Jobs, was already working at Atari, and 25-year-old old Steve Wozniak was at Hewlett-Packard when they started Apple in Job’s garage.

Pino Audia
And, for example, in the case of Steve Jobs, he benefited greatly from the support that he got from the Atari people, because they introduced him to investors.

If you listen to those first few minutes of the episode or read the transcript, you’ll see that a bit of romance gets injected into the founding stories of a lot of companies.

This is not to say that there wasn’t a lot of sweat and creativity invested in getting these companies off the ground. Just like the hot new artist that explodes on the scene, no one really talks about the years of testing, revision, hustle and lucky breaks that went into the impressive debut (a.k.a Draft #250).

There is a lot of valuable advice you can take by paying attention to someone else’s process- performing due diligence, avoiding undesireable contract stipulations, generating appropriate plans and budgets and being bold with marketing plans.

Just don’t expect to achieve the same results by following exactly the same steps as someone else. You have no idea who or what conditions may have been helping mount those steps. Ultimately, you might be better off carving your own steps or even rappelling down an entirely different mountain instead of trying to climb behind someone else. (Or simply ignore vague metaphors about achieving things altogether.)

creativity, State of the Arts, Working In The Arts

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Are The Creatives Among Us?

April 30, 2014

by:

Joe Patti

One situation I meant to acknowledge in my post yesterday about whether proximity to others doing creative work spurred your own innovation was (for want of a better term) Steve Jobs’ design of Pixar’s studios.

In short, he had the restrooms and other important building features placed in a central hub so that people from different parts of the company would run into each other. About a year ago I wrote a little about other arrangements that replicate this basic idea.

Richard Florida has been writing a series of five articles for The Atlantic Cities on different types of economic segregation in metro areas around the country.

Today he made his final post on the places where creative class workers are segregated from everyone else. Even if you are skeptical about Florida’s theories about creative class bolstering the economies of different communities, the research results are interesting to consider. I had never even thought about segregation of creatives as a problematic condition.

You may have heard of the term “town and gown” referring to the distinct cultural line that often develops between people who live in a community with a college and those who attend and work there. The depth of this cultural divide is one of the factors that feeds into the creative class segregation, but there are many others as well.

The metros where the creative class is most segregated include the nation’s largest metros and many of its leading knowledge-based economic centers. Los Angeles tops the list, followed by Houston, San Jose, San Francisco, New York, Austin, San Antonio, San Diego, and Chicago.

When we expand the list to include all metros, a number of smaller ones also show substantial levels of segregation. The creative class remains the most segregated in Los Angeles, but Trenton-Ewing, New Jersey (which includes Princeton University) takes second place, and Salinas, California is the third most highly segregated metro in the country on this score…The creative class is also highly segregated in college towns like Ann Arbor, Durham-Chapel Hill, Tucson, Gainesville, and College Station. As I wrote a few weeks ago, many of these smaller college towns also experience high levels of segregation of educated residents.

There were some results from the research that I saw encouraging to my hope that vibrant cultural experiences could be built in smaller communities.

Conversely, the metros where the creative class is least segregated are mainly in the Midwest and Sunbelt. The Twin Cities of Minneapolis-St. Paul is the least segregated large metro on this score, followed by Rochester, Buffalo, Cincinnati, Providence, Milwaukee, and Hartford. Jacksonville, Tampa, and Virginia Beach in the Sunbelt round out the top ten large metros where the creative class is least segregated.

The metros where the creative class is least segregated are all smaller ones. In fact, there are more than 150 smaller and medium-sized metros where the creative class is less segregated than their counterparts in the least segregated large metro. Many of these places, especially in the Northeast and the Midwest, are cities where levels of the creative class are fairly low. Mankato, Minnesota, has the lowest level of creative class segregation in the country, followed by Lewiston-Auburn, Maine; St. Cloud, Minnesota; Joplin, Missouri; and Rome, Georgia.

There are a number of reasons why segregation is higher in large metropolis, often having to do with gentrification raising rents and longer commuting times, both which inhibit different groups from interacting with each other.

So getting back to the question I posed yesterday about what scenario might be better, this research got me wondering if a situation might arise where a lot of people are doing creative work in a large city, but they may be doing it in enclaves distinct from the general population. That dynamic may actually be better for your personal creative growth, but the work being created might also be more disconnected from the community than that being created in a smaller metro area.

It may be more difficult therefore to attain the goal of “serving the community” in a larger metro than a smaller one. Even though greater numbers of people are experiencing your work, you may be serving a far smaller segment of the population than an artist in a metro area of 50,000. Two arts organizations in the smaller metro may serve a far more economic, educational and racially diverse segment of their general community than 20 arts organizations in a larger city.

As I mentioned earlier, I hadn’t really thought about segregation of creatives as being a problem. I wonder if it is perceived as such. Is this manifesting in a negative manner for cities with high segregation like New York, Austin and Chicago, which are all recognized as having relatively vibrant cultural scenes? Do they see untapped potential in more integrated living conditions?

The protests in San Francisco against tech companies like Google would seem to be a reaction against creatives living amongst the population. (The issues are more complicated than that, really.)

On the other hand, the low segregation communities of Minneapolis-St. Paul, Rochester, Buffalo and Cincinnati all generally recognize and appreciate the benefits their arts scenes bring to the livability of their respective cities. And lest you think that smaller communities necessarily means less available financial support for the arts, ArtsWave of Cincinnati just raised “$12 million in contributions– the highest amount ever raised by any community campaign for the arts in the country.”

Audience Relations, General Musings, State of the Arts

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