Leave governments away from the Green negotiations and treaties

Copenhagen, Cancun, Rio, etc are all very nice places to visit and to have a conference about climate change, reducing emissions and going green, but doesn't it sound just like a huge waste of time (and greenhouse emissions by all these planes flying to these conferences) when they never get to a binding agreement to be followed?

Some might argue that it doesn’t, because there is some forward movement and by discussing it, governments start to think about it. This is completely right, but on the other hand, I still find that if we rely on governments (which are protectionists of their own economy by design) we will discuss until we are wearing bathing suits inside a boiling swimming pool until we reach a binding decision.

And for you not to call me an half-assed problem oriented guy, here is my solution: get the biggest companies in the world (that are in one way or another already committed to get green) together and sign binding agreements about reducing emission, not buying from suppliers that don’t follow a certain standard, sharing green technology, etc. This would be a huge PR for those companies who opt in (gaining the consumer good will, thus the money on their wallets) and it could have a domino effect: once the big ones are in, the 2^nd bigger ones have to adhere to compete, then the medium companies and finally the smaller enterprises.

Naive plan?

Gamefying business decisions - now we are talking!

The need to predict the future, as exciting as it sounds, crops up in corporate life in terribly mundane ways. Case in point: large videogame companies need to know where to put their marketing dollars many months before they complete their games. Inevitably, some games will be stinkers, hardly worth the investment of an ad campaign. But how do you know which ones?

Here's how one very large videogame company used to guess the answer: its marketing people would predict the score their games in progress would garner on the website Metacritic, which aggregates game reviews. But why would the marketing people know more than the game's developers?

Three years ago, a startup called Crowdcast suggested a different tactic. Why not take hundreds of your lowliest employees, the ones in the trenches who are actually making and testing these games, and ask them what they think the Metacritic scores will be? Better yet, why not give them each $10,000 in play money and ask them to bet on the outcome? Let them accumulate a pot of pretend wealth if they're right. Turn game marketing prediction into, well, a game.

To the executives' delight, the employees' Metacritic predictions turned out to be 32 percent more accurate. More disturbingly, their accuracy was inversely proportional to their place in the hierarchy. The closer you got to the C-suites, the less of a clue you had—and the lower your pretend wealth in Crowdcast's game.

That embarrassing factoid might explain why this particular videogame company, like many Crowdcast customers, wants such stories to remain anonymous. "It's kind of experimental," explains Mat Fogarty, Crowdcast's sardonic British CEO, "and it may undermine the credibility of their awesome management."

Indeed, anonymity and uncomfortable revelations in the boardroom are Crowdcast's stock-in-trade. The San Francisco startup already boasts clients and partners as diverse as Hallmark, Hershey's, and Harvard Business School. It is built on the back of years of research into how internal prediction markets work. In such a market, managers ask employees questions about the future of their product and let them bet on the answers, without knowing who bet what. The results can be scarily accurate.

In September, Crowdcast ran a prediction market for a large American car company, one that normally runs its designs for new autos through a car clinic—a lengthy and expensive kind of focus group of buyers. Crowdcast's project involved asking engineers and factory supervisors what they thought the outcome of the car clinic would be.

Forty questions were in front of these ground-floor experts at any given time during the market. For example: What percentage of buyers will list this car's dashboard as its most important feature? The trial market was so accurate that the car company will be trying another in January. The auto giant now has a new way to cut costs: use these predictions markets instead of expensive car clinics at least a third of the time.

Crowdcast calls the space it's in "social business intelligence" rather than crowdsourcing. "Within your organization, there are people who know true future outcomes and metrics," says Leslie Fine, Crowdcast's chief scientist. "When is your product going to ship? How well will it do? Normally, crowdsourcing asks for creative content. We're asking for quantitative opinions."

Put that way, it sounds a lot more respectable than "get your employees to play a kind of fantasy football with sales and shipping dates." But make no mistake—that's actually what Crowdcast does. That used to be a hard sell, Fogarty admits: "It seemed weird to be talking about playing games at work and using Monopoly money." 

From MIT's Technology Review.

Gamefication: it’s time to use in complex gadgets

Not all gadgets are magically intuitive like the Nintendo Wii or an iPhone. Some tend to be rather complex, like for example the DSLR cameras (for the ones not versed into photographer’s jargon: those digital cameras, semi- or professional, with lenses that can be removed and changed and have more regulation possibilities). Today they are made to operate quite automatically (just like a point and shoot – or “normal” digital camera), but if you get a camera like this, HOPEFULLY you want to do more than pointing and shooting.

The thing is: those DSLR cameras are complicated. The interface is not so intuitive. I just got one of these cameras and I spend the night juggling with menus and buttons until I managed to know the basics of operation. And I am not a complete amateur: I used SLRs before and I understand the basics about focus, aperture, shutter speed and such. It took me “only” 3 hours to know the very BASICS, and only because I knew what I was looking for. If you don’t know where to start (most people who never handled a SLR camera), I imagine this would be so frustrating you would actually just use it as a point and shoot camera.

Finally the point of this post: if you use tutorial level game mechanics, you could solve this with a simple CD or website. Imagine you open this camera website and it teaches you step by step how to mount the lenses on the camera and insert the batteries (then it obviously give you some % completion status bar progress). Then it teaches you how to take a point and shoot picture (congrats, you qualified to upload your pictures and participate in this months amateus photo contest). Then how to regulate the shutter to create frozen or movement images (Congrats, you get 10 points to vote in others people’s pictures). Then how to wide or narrow the field of depth. Then timer. Then manual focusing. Then using or not flash. Etc etc etc until you get to the really advanced stuff. Imagine also if you could share your tutorial level first pictures and vote for the best ones of the month and then get some gift! Or even just a badge of honor as good photographer.

Please, gamefy my experience so I can have fun while learning something complicated. Just like a game, teach me the basics and then challenge me bit by bit until I am fairly confident in handling it. When companies which should in theory be full of nerds will use game mechanics instead of 300 page manuals?

Rework - book review

Rework is a smart book with an uncommon business logic, very little jargon and a lot of personal experience from the founders of 37 Signals. They challenge everything, from the need of being big (they don’t want to be) to doing more than the competition to win market (they preach their products do LESS, so the niche market who wants simpler stuff will choose them).

The book is well written, smart and interesting, but, sincerely, doesn’t quite pack a punch. Lots of good advices and personal sharing is nice, but in the end, it seems it lacks “substance”. Maybe the book is too superficial, I am not quite sure. Probably I am just comparing it with my favorite last books (which were very in depth and useful for me to take action, while this one is interesting, but I don’t see it as so useful).

Or maybe it is just that I am naturally more aligned with a “strange” way of working, like the belief that meetings should only involve the people necessary and should be as short as possible. 

My final comment: for the buzz it received, I was expecting more.

Or am I wrong? Anybody out there that used Rework to fundamentally change the way you/your business work?

Why Groupon sucks (for businesses)

For the ones out of Earth (or at least out of the net), Groupon is a website that offers local deals for a limited amount of time if a minimum number of people buy it. Example: a burguer restaurant offering 60% of if 100 people buy the discount. There are loads of websites just like Groupon, but this was the first (or the first to become really popular, I am not sure).

While this is cool for customers, it sucks for (most) businesses.

It sucks because if you need to cut prices to get customers, your value proposition is probably not great. There is always someone who can make things cheaper. This leads to the race to the bottom, as very well explained by Seth Godin - a spiral of death.

For most business, the effect of Groupon is: 1 - lots of people come, 2 - you get less profit this time because you sell cheaper than normally, and 3 - they never come back (unless there is a new Groupon offer).

There are only 2 business types that can benefit from Groupon:

Walmart like giants that have enough buck to back their business model of selling cheap stuff to loads of people. (But anyway, if you are a Walmart like giant you don’t need Groupon).

The 2^nd type is if your product/service is so awesome (yet maybe unknown/untried) that people would come back to buy more (subscription based definitely is a plus). World of Warcraft, the addictive subscription based online game, is this kind of business (and they used promotions much before Groupon anyway). This businesses of the 2^nd type are just like drugs: you give a good deal today, so the customer will pay more later for the same product.

For all the rest of businesses (including you, cheap and unremarkable burger restaurant), Groupon is just a waste of profit masked as a nice cash inflow.

Update: a quote from an article in HBR:

In my study sample of 150 businesses that ran Groupon promotions between June 2009 and August 2010, 42% said they would not run a Groupon promotion again. Their main reasons were that a significant proportion of Groupon redeemers are extremely price sensitive, barely spending beyond a discounted product's face value. Not surprisingly, repeat-purchase rates at full price were also low — just 13% — for these businesses.

"Retail Is War Without Blood": What Foot Locker's CEO Learned in the Army

Ken Hicks, the CEO of Foot Locker, formerly the president and chief merchandising officer of J.C. Penney's, graduated from the United States Military Academy and spent six years in the army just after the Vietnam War. HBR talked to Ken about how his time as a young officer prepared him for a career as a retail executive.

Tell me about a couple of things you learned from your military experience that have made you a more effective CEO.
When I took over my artillery battery, at age 25, I could shoot a cannon better than any of my section chiefs. And I had six guns. The only problem is, I could only shoot one gun at a time. I realized that what I had to do was train my section chiefs to be better cannoneers than I was. Because shooting 18% of the battery isn't going to be effective. And my job really wasn't to shoot a cannon, it was to develop an entire artillery battery.

So I learned that you're very dependent on your people to be their best. You train and develop and motivate them. People think in the army that you tell somebody to do something and they do it, and that's far from the truth. They actually have more options and pressures that can be very intense. Think about it — if somebody in Afghanistan screws up, they get sent back home. If they don't, they stay in combat.

To be a successful leader, you have to understand what skills are required and be competent at them, and you also have to have confidence. Sometimes people mistake confidence for leadership, or competence for leadership, but it takes both of them together.

Do you see any connections between how the military and the retail industry operate?
In retail and the military, you're very dependent on the people at the front or the selling floor. You realize how important the sale associate is. It's the same thing in the army; you're very dependent on your privates and specialists, and so you talk with them and learn from them. Six or eight months after I'd left J.C. Penney's, I was in a Penney's store looking at some merchandise, and an associate recognized me and came running across the floor to say hello. She remembered me because I'd treated her with respect and listened to her. That's what you have to do to inspire people. The people on the selling floor, just like the cannoneers, the gunners, and the infantry, are the ones who make everything happen.

How do you stay connected to frontline employees, besides going out and talking to them?
Recognition. I send out a little note card every month to the employees who perform best, thanking them for doing a good job. If you think about the military, people are willing to give their life in defense of the country and their friends, and what do they get for it? They get a ribbon on their chest. Everybody thinks recognition needs to be a big bonus or a promotion. It really doesn't. What you learn in the military is people do their work because they trust and respect you and they want you to be able to recognize them for that. I send out these cards and the next thing you know, they frame them and put them on the wall in their stores or their cubicles because it's important to them.

What else has made you successful as a senior leader?
Learning and studying each situation. When I was in the Army I had the opportunity to have lunch a couple of times with Omar Bradley. Here's a guy from history who led troops across Europe and commanded the war in Korea, and people would always ask him, who is the greatest general you served with? And he would say the greatest field commander was Patton. That's because Patton did his homework, he studied the map, and he knew where the enemy was going to be and where they needed to go. It's the same in business. You have to study the numbers and constantly try to understand where the opportunities are and how you can go after them.

I've got on my wall in my conference room the principles of war. And each of the principles of war apply in business. For example, mass: don't spread your troops out, don't spread your resources too thin. Unity of command: know who's in charge, who has responsibility and who doesn't. Security: don't be surprised, study the competition, know what's happening. I worked with a retailer who said, "Retail is war without blood." You study and spend a lot of time understanding the competition's situation. You learn not to overreact.

How do you communicate a clear mission?
You have to constantly reinforce it, so people always know why you're doing what you're doing: we're going after this because of that. Then people know why they're there and what they need to focus on and what they should do. You can empower them. One of the differences between our army and the Soviet army was that our tanks all had radios; every tank could communicate with every other tank. You could see the difference that made in mock battles. In the Russian army, the tank commander had a radio, and the platoon leaders, and all the other tanks just followed the leader and did whatever the leader wanted. If something happened to the leader's tank or they were lost, they didn't know what to do.

I assign a lot of projects to people and say, here's what we want to accomplish. You're the lead; you have responsibility. You bring the resources to bear, and let's accomplish it.

You're in a pretty volatile industry. How have you adjusted the way that you go about planning to take into account the rapid nature of change?
Constant communication and watchfulness. When I was in the army I was in a cavalry regiment, and one of the cavalry's jobs is to go out and scout. I send people out to our competitors' stores all the time. We look at the competition, the press, any venue we can think of where we will see new ideas and new things.

by Katherine Bell - This post is part of an HBR Spotlight examining leadership lessons from the military.

4 ways to make people believe you

Credibility takes a life-time to build and a moment to lose - it is hard to believe the auditing skills of an Enron auditor. Credibility is also domain specific - you might trust your mom in several areas, but if she is not a surgeon, you probably wouldn’t trust her to perform a brain surgery on you (you probably wouldn’t trust your mom on dressing advice also). But, besides those extreme examples, there are ways to make your communication more credible. How to make people believe you?

1- The Sinatra test

“If you can make it in New York, you can make it anywhere else”, goes the song from Sinatra (thus the “Sinatra test”).  What this means if that if you can do something (like succeed in New York), this means that we can believe you will do well anywhere else. If you are an engineer hired by Google, probably you would be also by other tech companies. If your blender can blend an iPad, probably it can blend any food you manage to put in it. If you catered in the White House, probably you qualify for catering anywhere. So if you have examples that might look like a Sinatra test, use it.

I know most catering companies never did or will cater in the White House, but think on your turf: did you cater on the local town hall or for a local star rich entrepreneur ? So probably you can do great anywhere in the city.

2 - Add details, even when they are irrelevant

University of Michigan researchers ran a simulated trial where 2 groups of jurors were asked to assess the fitness of a mother to keep her 7 year-old son in her care. Each group heard the same carefully balanced arguments for and against the mother. One group however was given some vivid detail for the supporting arguments. As an example, one favorable argument was that the mother ensured her son washed and brushed his teeth before bed-time. In the vivid detail version they added "He uses a Star Wars toothbrush that looks like Darth Vader". The additional details were purposely irrelevant to the argument.

The impact? 6 out of 10 of the jurors hearing the vivid version of the favorable arguments judged the mother to be suitable, while only  4 out of 10 of the jurors who heard the vivid version of the unfavorable arguments judged the mother to be suitable. The irrelevant vivid details had a big impact! The explanation is that what you can picture vividly in your mind will look like closer to the truth.

3 - Give out the testing credentials

NBA rookies have a lot of young horny girls around them. If you are a young NBA rookie, it’s quite easy to get carried away and screw every single lady that compliments your size. To try to avoid rookies to get AIDS and get rustled by ladies who want to get pregnant and get their money every rookie attend an “intro to the league” seminar. There, the league could tell the NBA rookies that they should protect themselves because of AIDS and pregnancy, but that wouldn’t work (the common sense is also obvious, they probably would know this already – but knowing doesn’t lead to action). So instead they planted some very “dressed to kill” ladies at the conference hotel bar without the rookies knowing they were planted by the league. They made plans to meet with the ladies after the conference and so on. The next morning, all the ladies entered the conference room and announced: we all have AIDS. Boom, the rookies got it, they were this close to having sex with someone that had AIDS, they should better protect themselves. By allowing people to test something themselves, it makes it much more credible.

Another example is the “will it blend?” videos. You can see the blender doing its work and blending iPhones, iPads and whatever people put in there. This is already very credible because you can see it, but it is completely credible because you can test yourself. Get the freaking blender and put stuff there and see if it blends or not. The same way you can test other blenders and see if they are up for the test or not. It is very credible to test it yourself.

An old use of test credentials? Enter a clothes store, get what you want and try it on, look on the mirror, check for yourself if it is good or not. What would you believe more, your own judgment after you put the pants on in front of the mirror or that pushy sales clerk that, before you even try, is already saying that will look amazing on you?

4 - Make statistics accessible

Lots of people go for the “I will show you the data” approach to gain credibility. It doesn’t work so straightforward because, well, we are human beings. But statistics are great if used correctly: that being, making the statistics tangible to people.

If I tell you US and Russia have 28,000 nuclear warheads, well, it looks like a huge number, but how huge? We cannot picture it because it’s too big (and remember the example above of the Darth Vader toothbrush: if you can’t picture, it is less credible). The nonprofit Beyond War would arrange "house parties" in which a group of friends and neighbors would assemble to hear about the dangers of nuclear weapons. The organizer from Beyond War always brought a steel bucket and BBs (those small metal balls used as ammunition in air guns). He would drop one in - it would make a distinct sound - and say it was the power of the bomb at Hiroshima. He then described the devastation of this bomb. Then he'd drop 10 BBs into the bucket: This is the fire power of one U.S. or Soviet nuclear submarine. Then he had attendees close their eyes: He poured 5,000 BBs into the bucket saying it was today's arsenal of nuclear weapons. The point here is that in any statistic it doesn’t matter the exact number (who cares if it is 5, 10 or 50 thousand? It is too big number to picture), but the relationship used to make this number concrete to the audience.

Stephen Covey has a great example that emphasizes teamwork in his writings. He once tried to give the dry statistics: Only 37% of employees had a clear idea of their mission, only one in five was enthused etc. He got more impact when he mapped this onto a soccer team: "If a soccer team had this same statistics as those, only 4 out of 11 would know where their goal was ... etc."

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This and much more appears on Made to Stick, an outstanding book about building messages that stick to people’s brains.