Does Your Boat Rock?

Business loves disruption.

You’ll find the word “innovation” in many a Fortune 500 mission statement.

Fair enough, finding a new way to do something, or doing something better can create untold opportunities.

But many companies hate disruptors.

Those curious individuals who question the way things are done.

Who ask “why?” and “why not?” often at the most inconvenient times.

Who won’t tow the company line, or drink the company Kool-Aid.

Who don’t subscribe to the status quo, at least not wholeheartedly.

These people get labelled as non-team players.

Told to quiet down, told not to rock the boat.

If you’re running a company of a certain size and no one’s rocking the boat, what does this say about the culture?

If it’s not strong enough to survive a maverick or two, you’re most likely working in an echo chamber.

It’s probably nice and comfortable.

But is comfortable honestly good for your company’s future?

If you want to change, it’s really not so hard.

Just try saying, “Boat rockers welcome!”

Look at it this way, if the boat’s not rocking, maybe you’re not moving fast enough.

It’s What You Don’t Say

Mies van der Rohe may not have coined the phrase, “Less is more” but he is inextricably linked to it.

Over the years, it’s become a mantra for good design and design thinking.

It makes even more sense today with our shrinking attentions spans.

Microsoft’s famous study says we’re barely better than goldfish.

And our poor goldfish like brains are bombarded by ever-expanding media.

No wonder, one of the secrets to effective messaging is what you leave out.

People don’t want more information, they want the right information.

That’s harder than it sounds, because even assuming you’ve figured out what the right information is, people hate leaving stuff out.

We’re programmed for more: the car with more features, the job with more money, surf & turf; because why settle for one if you can have both!

Maybe this approach makes some sense in life, but marketing doesn’t work the same way.

While you may be tempted to cram more in, often all that cramming just confuses consumers.

It confuses marketers too.

You can present people with as much information as you like, but that doesn’t mean they will read or retain it.

100% information with 50% cognition is, in effect only 50% information, because that’s all that’s being understood.

Say you change the mix to 75% information with 90% cognition, now 67.5% is being understood. Paradoxically even though there’s less information, you communicate more.

Of course these numbers are arbitrary, but the principle is not.

You can prove this for yourself with a simple thought experiment.

Imagine a tray with 20 random objects that you are allowed to look at for 15 seconds.

How many objects can you recall?

Cognitive psychologist George Miller’s 1956 experiment suggests the answer for the average adult is in the 7 – 10 range.

Now imagine the same tray with a single object that you’re allowed to look at for 2 seconds.

Congratulations, you have 100% recall!

But telling consumers less still feels counterintuitive even if you are saying more.

And if something feels sufficiently counterintuitive, people will act against their own best interests as the Monty Hall Problem clearly shows.

Especially if they get to avoid the hard work of paring something down to the essential.

This tendency to say too much is at its worst when describing benefits.

A laundry list is not a benefit.

And if your product lacks a unique benefit a laundry list won’t disguise this.

To paraphrase Seth Godin, if you can’t describe a benefit in eight words or less, you haven’t got one.

So stop pretending.

What you don’t say is every bit as important as what you do.

You’re better off selling with pizzazz rather than trying to cram tenuous benefits into an already overstuffed consumer.

 

There’s Disruption and DISRUPTION

Disruption is a word that gets more diluted and fluffy by the week, so it’s reassuring when it’s used accurately.

Robo-advisors first appeared in 2008, pioneered by startups like Betterment and Wealthfront.

By 2011 a trend was emerging and according to Bloomberg robo-advisors will be managing $2 trillion by 2020.

In other words, three years from now, algorithms will be managing an amount close to India’s GDP.

If that’s not disruptive, will somebody please tell me what is.

And it’s not just the rapid growth in assets under management that’s impressive, there’s the psychology behind it.

I’ve worked on enough financial services projects to have learned a couple of things:

1. People are emotional about money.
2. People are irrational about money.

And having an algorithm manage your money is, at first glance, counterintuitive.

Although considering just 15% of Americans trust the financial service industry to act in their best interests, maybe it’s not as counterintuitive as it seems.

The industry has done a great job overcoming consumers’ negative bias toward financial advisors.

Especially considering consumers were still reeling in the aftermath of 2008’s global market collapse.

Getting people to trust an algorithm with their investments marks an extraordinary change in perception and even established firms like Vanguard and Charles Schwab have jumped on the robo-wagon.

In actuality, a robo-advisor’s lack of cognitive bias and emotions, gives it significant advantages in trading securities.

The other big advantage is pricing, algorithms don’t need custom tailored suits or huge year-end bonuses.

In a nutshell, they’re better than all but the very best fund managers and cheaper than any of them.

As disruptive as this may be, the model could be pushed a lot further.

Let’s get back to that projected $2 trillion and put it in perspective.

In 2014, only 8 countries had a GDP larger than $ 2 trillion.

So if robo-advisors can manage an amount larger than most countries GDP, why can’t they manage a country’s GDP?

If they do a better job managing personal wealth wouldn’t they do a better job managing national wealth?

Or put another way, if algorithms can beat 8 out of 10 fund managers, wouldn’t they out-perform 8 out of 10 Finance Ministers?

I don’t think it’s that farfetched—Finance Ministers have the same inherent human weaknesses as traders.

And unlike investors, taxpayers don’t get the benefit of a benchmark or index to gauge their performance against.

I bet algorithms wouldn’t run a $450 billion deficit or build bridges to nowhere, or waste a billion dollars canceling a power station, like Ontario’s profligate Liberal government.

Of course it will never happen.

While disruption is lauded, DISRUPTION is another matter.

Long after truck drivers, neurosurgeons, barbers and rocket scientists have been replaced by robotics, politicians will still be squandering our money.

Like death and taxes, you can bank on it.

How Don’s Cleaned up in Washington

Like most people, I had never heard of Don’s Johns until earlier this week.

Now they’re world famous, for 15 minutes at least.

The brand’s new found fame came about because of a cover up.

Better make that an attempted cover up.

For those of you not privy to the story, the facts are these.

Don’s Johns are a Virginia supplier of portable restrooms or portaloos.

They’ve been around since 1964 and provided portaloos for the 2009 and 2013 Presidential inaugurations.

Presumably they did a good job because they were contracted for the inauguration of President elect Donald John Trump.

Now anyone can understand why the transition team would not want the President elect to be associated with a sanitation service.

Which begs the question, why was the company  hired in the first place?

However bureaucracy moves in mysterious ways, and they were.

Consequently somebody made a decision to tape over the signage on each portaloo.

It probably seemed like a bright idea at the time and you can see why the decision was made.

It’s simple. It’s quick. And it solves the problem.

At least in theory.

But brands and the media don’t always function in a predictable way.

They’re not subject to immutable laws like physics or mathematics.

Remember New Coke?

Although it could be argued that what happened next was largely predictable.

Considering there’s nothing that ignites press coverage on a subject faster than a cover up, especially, a ham-fisted cover up.

And the world press jumped all over this unlikely, although some may say apt, intersection between politics and sewage.

Google “don’s johns” and you get over 414,000 results in the news category.

So the story got millions of eyeballs and the company got millions in free publicity.

Of course hindsight’s 20/20, but it’s hard to believe doing nothing would have led to a worse outcome for the transition team.

Taping over the signage was especially clumsy.

If it was my project, I would have at least got some stickers printed.

It would have been a couple of hundred bucks well spent.